“Ganbei!” Yet another rice wine challenge from Mr Gao … and it’s only a bamboo sprig past 1pm. We drink and I cast my eye across the table at Rob who finally has the opportunity to experience the multilayered game that is the Chinese business lunch. The setting is quintessential, the food excellent and our hosts deeply versed in all matters geo-economic and political.
Glancing out the window I can see the rooftops of newly built, unmistakably Chinese factories stretching out into the distance. “Hey Rob, you enjoying this?” He nods. “Great. Next year, I’m taking you to China.” For just beyond the last factory lies the boundary of the Teda (Tianjin Economic-Technological Development Area) Suez Economic and Trade Co-operation Zone, and the rapidly rising boomtown of Sokhna, Egypt.
The purpose of our visit is twofold: to position our small, medium and micro enterprises group with a new chemical plant under construction in the Teda zone and to (try to) do our patriotic bit to prevent the seemingly unavoidable collapse of one of South Africa’s most important chemical-industrial key points. These objectives are interconnected, but, alas, the details are not for sharing in this missive (hometown blowback, you understand). But I digress.
What’s salient about Sokhna is the stark, Brics-and-mortar manifestation of the multipolar world, Egypt’s carefully curated positioning within it and a sobering reminder of South Africa’s self-inflicted failures.
After lunch I ask Mohamed, Mr Gao’s local joint-venture partner, how industrial projects such as theirs slot into the developmental frameworks set up for foreign direct investment (FDI). His answer is refreshingly candid: the Egyptian military government finally embraced the simple notion that sociopolitical stability flows from economic stability and that broad-based employment is the a priori precondition for this. He adds that the Teda zone lay mostly fallow for more than a decade and that meaningful growth took off only fairly recently. “But the point is, we were ready.” And the results are in: so far Teda has attracted $3bn in FDI to form 185 new companies that have generated more than $5.3bn in sales, paid $3m in taxes and created more than 10,000 new jobs. All achieved in a high Gini-coefficient country with a minimum wage rate equivalent to R3,500/month, located in one of the world’s toughest neighbourhoods, while its government straddles potentially explosive and overlapping commitments to the US and Nato, China’s Belt and Road Initiative (BRI), global trade and Russian and Eurasian energy flows. And Israel.
When I inquire about legislation regarding minimum equity stakes, local directorships and employment ratios, the answer comes as a gut-punch to what remains of my once vital entrepreneurial instincts. Besides commercially attractive start-up, capital clawbacks and realistic equity thresholds, investments such as Gao’s require a minimum of only one Egyptian director and a Chinese-to-local labour ratio of one in 10. This is pragmatism writ large and it has delivered scaffold-and-crane forests in Cairo, six-lane highways across the desert and state-of-the-art high-speed rail construction.
I’ve been travelling to China since 2004 and Egypt since 2011. While the “China Miracle” story has grown stale, the focus should be on how it is reshaping the global geo-economic landscape. The statistical evidence is irrefutable, and the mutual synergies embedded within Brics and BRI-backed developments — and the potential to unlock political renewal — should be blindingly obvious to anyone with a sense of history. Which explains, perhaps, why South Africa’s policymakers seem uniquely unable to apprehend the reality unfolding to the north.
If I could just have the car guard’s share for every time another private-school-tied Cassandra cautioned about “the neo-imperial slavery lurking behind Chinese project-development loans”. With informed discussion evidently off the menu, I default to questions instead: “Wait, hasn’t the West been ‘helping’ Africa for 250 years? Based on the evidence, why not let China have a go?” It’s a great conversation ender. Especially in Sandton.
Egypt’s new trajectory is not an outlier: a rising tide of nations with a greater sense of urgency — and destiny — is finding the will, the compromise and the political nuance needed to navigate the plate tectonics of a rapidly shifting multipolar order. Reasonable people can agree that South Africa is, to some extent, a “special case” given its history and ethnocultural complexities. While these factors offer expedient fodder for political narrative and public spectacle, scant credence is given to the fact that they also happen to map onto serious regional material and human-resource asymmetries. “Sixteen million South Africans face inadequate access to food!” was the recent lament from President Cyril Ramaphosa as he doubles down on edicts that will suck what little oxygen remains from the SMME business climate while, not to be outdone, the free-market ideologues of John Steenhuisen’s DA insist on seeing “all things economic” in black and white.
The brilliant venture capitalist and political scientist Eric Li once offered a clue to how South Africa might stop the rot when asked whether he was advocating for the “export of Chinese state capitalism”. The answer surprised his interlocutor: “No. This system suits China at this time, under these conditions; the only thing about it that is exportable is the evidence that it is possible to build alternative systems when they meet those criteria.”
In the South African context, the priorities are blindingly obvious. We are now a rentier economy — place finance below politics; punitively tax the property barons nouveau; enable direct democracy by abolishing cadre deployment; decisively unshackle SMME business from broad-based BEE (BBBEE), employment equity, environmental, social and governance and other arbitrary constraints; create internationally benchmarked industrial, not financial- or service-related, development zones; amplify competition law; and restore education to a ruthlessly merit-driven system. There’s more, but, unless these are implemented, there will be little left to argue about, or for.
Ignore these imperatives and, to paraphrase an old Arabic saying: the dogs bark and the (development) caravan moves on.
Little of this is new, and everyone agrees that strong (though unifying) leadership is desperately needed. But where will it come from? The pews of the ANC’s “broad church” are now as empty as the head table of the recent G20 summit, while our urban elites ruminate on other matters — such as how many BBBBEE deals fit on the head of a Versace pin, or how many loans can be dumped onto the bent backs of the “proletariat” by silk-suited banking savants before our skies darken once more with the smoke of a billion burning tyres.
- Buchan is a South Africa-based serial entrepreneur.
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