President Xi Jinping’s decision to skip an important speech at the Brics business council on Wednesday last week is worth dwelling on. The speech, delivered in his name by commerce minister Wang Wentao, contained the key points he wanted the world to hear from the summit.
It’s important context that Xi’s trip to Johannesburg was just the second he’s taken out of China this year, the other being to Moscow in a show of solidarity with Russia’s President Vladimir Putin.
So it was by any measure a very big deal for Xi to come to SA, and therefore an even bigger deal that he skipped this important public and highly choreographed moment. Something important must have gone down.
His speech contained an attack on the US he scarcely bothered to disguise, describing an unnamed country as “obsessed with maintaining hegemony” that has “gone out of its way to cripple the emerging markets and developing countries”.
“Whoever develops first becomes their target of containment. Whoever is catching up becomes its target of obstruction,” Wang said on behalf of Xi.
This illustrates that Xi is stuck with his decision to side with Russia on its invasion of Ukraine and to adopt an overtly hostile posture towards the West. It was another strategic blunder from Xi, probably founded on his belief that the West is weak and decadent and would allow Russia to embark on imperial atrocities on its eastern fringes without a response.
The Chinese government will not explain why Xi was unable to make the speech, so we must speculate. China watchers appear to independently align on two likely options; Xi was taken ill, or something domestic required his urgent attention.
Youth unemployment
There is much to worry Xi at home. The Chinese miracle, a 30-year economic locomotive built on a debt-laden infrastructure overspend, has run out of steam. CPI has turned negative, exports and foreign direct investment are tanking, and property behemoth Evergrande has filed for bankruptcy.
The Chinese government has stopped publishing various economic data, a good example of which would be youth unemployment (16-24 years), which was last published in July at 21.3% officially, but is likely to be considerably worse now. These youngsters are living with their parents instead of renting one of the millions of empty new apartments built with borrowed money — and that was before what looks likely to be a deflationary recession.
Xi is partly responsible for this because it is he, for example, who jealously eviscerated Alibaba and its flamboyant founder, Jack Ma, in the process disincentivising visible success and ensuring the dead hand of caution smothered the country’s once-invincible tech sector. Alibaba used to hire tens of thousands of graduates a year. No more.
Former US president Donald Trump’s thuggish international relations style and President Joe Biden’s surprisingly hawkish conduct is much commented upon, but Xi has also contributed to diminishing investment and a souring international image as he has instructed diplomats and soldiers to take an aggressive stance overseas. The country’s antagonistic relationship with India, which may one day be the world’s largest economy, is senseless.
All of this has created self-inflicted political and economic problems at home as Xi’s dream of overtaking the US as the world’s leading economy slips away. And so to Brics, and SA, flotsam tossed in turbulent geopolitical seas. It does indeed present an opportunity we should pursue with caution. The imminent admission of Egypt and Ethiopia, and SA’s importance in the Southern African Development Community and the AU means with some artful diplomacy Africa can leverage its relationship with a stagnating but wealthy China that needs friends in its new cold war with the US and its allies.
Equity deals
African counties, with their demographic and resource opportunities, should collectively understand the power relationship differently, and use the Brics mechanism to our benefit. Fortunately for us, China wrote the blueprint, and in SA, because of the peculiarities of our history and economy, we already have some legislative structures to work with in the form of BEE laws.
We ought to treat Chinese investment just like China has treated Western investment. We should not just welcome it but go hunting for it, tie it to joint venture equity deals, and to knowledge, tech and intellectual property transfer arrangements. We should, as the Chinese have done, work this to our strategic benefit.
SA’s economy alone — little more than a rounding error in comparison to China’s balance sheet — can’t create such leverage, but if Africans can work together we can avoid falling prey to a new kind of extractive colonialism and get richer as China and other countries invest in the continent. It’s a big diplomatic ask on a continent where there is little cohesion and the interests of the people are sometimes subsumed to corruption and vested interests, but with China in need of friends the time to rethink the balance of power and ask for more in return is now.
In all of this we must remember that a Chinese slowdown will have outsize implications for a commodities exporter such as SA. President Cyril Ramaphosa’s speech on foreign policy on the eve of the Brics summit was criticised by some as an attempt to mollify all sides, but this is the correct strategic position for SA. We cannot alienate our major trading partners. A radically anti-Western alliance suits only China and Russia, not SA, India and Brazil — and neither will it suit new members Saudi Arabia, the UAE or Egypt.
Xi’s strategic mistakes are coming home to roost, and our government has handled a delicate geopolitical moment with pleasing deftness. In fact, we should congratulate everyone involved in the handling of the summit. It seems the heads of state and their entourages were met, accommodated, transported and fed, and the thing seemed to run on time. The only blot on the landscape was the treatment of reporters, who were locked into an airless room watching a live stream without access to food or water, let alone the dignitaries.
Stories of foreign journalists wedging their heads into sinks to drink water from taps are not acceptable and are a poor reflection of a generally hospitable nation.
• Parker is Business Day editor-in-chief.
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