Centre for Chinese Studies

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The Centre for Chinese Studies (CCS) at Stellenbosch University is the leading African research institution for innovative & policy relevant analysis of the relations between China and Africa.

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A 21st century scramble : South Africa, China and the Rare Earth Metals Industry
(Stellenbosch University. Centre for Chinese Studies, 2012-03) Jepson, Nicholas; Grimm, Sven; McDonald, Matthew
The paper analyses the peculiar structure of the rare earth elements (REE) industry, a sector dominated by China, and the global implications of current upheavals within the sector, especially as they concern South Africa’s (re)emerging rare earths production. REEs are a hitherto obscure group of metals that have now assumed global significance. They are especially critical to modern high-strength magnets and constitute vital inputs for a growing range of mass consumer, ‘green’ technology and military applications. It is important to understand that REEs altogether comprise 17 different metals which, although found together in various combinations, differ in relative abundance and breadth of possible applications. There are therefore large variations in prices and criticality of supply between the different elements. The Chinese rare earths industry has secured a 97% share of upstream production by means of aggressive pricing, backed by state support and technology transfer. Beijing is now attempting to consolidate the industry, crack down on illegal mining and restrict and enforce export and production quotas. Official explanations stress renewed concern for environmental issues and the protection of scarce resources from over-exploitation. Also significant, however, is a policy of deliberately using export restrictions to leverage non-Chinese prices, in order to induce foreign downstream producers to relocate production to China. This process is beginning; although there are also two other forms of international response. First, there is demand destruction either through increased efficiency in REE usage, substitution or recycling of rare earths. Secondly – and most widely known – are attempts to restart REE supply chains outside China. South Africa is in the forefront of these efforts through two, globally significant, extractive projects. The refurbished Steenkampskraal thorium and REE mine may be the first non-Chinese new producer to come online, in 2012–2013. The Zandkopsdrift development in Northern Cape is less advanced, but is among the largest prospective new REE mines. Both are joint ventures between Western junior mining companies and East Asian parastatals, respectively from China and Korea. Significant environmental risks seem inherent in the extraction and separation of REEs, especially from thorium waste, although apparently this has not reached the public consciousness in the areas immediately around the South African mines. If these dangers can be avoided or minimised, the new rare earths mines could make a small but significant positive developmental impact at local as well as national level.
African regional economic communities engagement with China
(2014-09) Esterhuyse, Harrie Willie; Cisse, Daouda; Anthony, Ross; Burgess, Meryl
The development of effective African Regional Economic Communities (RECs) stands to benefit African countries immensely. Transnational free trade regions, single customs unions, single markets, single currencies and other forms of political and economic integration have the potential to strengthen both inter-regional and international trade as well as creating more robust solutions to issues of food, climate, health and political security. Nevertheless, implementation has proved a formidable challenge: lack of adequate economic and political structures, institutions and policies has impeded progress. The ability to strengthen many aspects of RECs are up to member states: agreeing on a set of political and socio-economic strategic priorities at the core of regional integration, implementing mechanisms for cooperation and integration as well as ensuring compliance are all challenges which need to be negotiated internally. A crucial aspect is formulating coherent policy on how to engage with external actors. Along with the European Union and the United States of America, China is now an undeniably influential actor with regards to all African RECs. With a co-ordinated China policy, RECs can effectively foster regional integration through both increased trade capacity and infrastructural development. This policy brief focuses on three RECs - SADC (Southern African Development Community); ECOWAS (Economic Community of West African States) and the EAC (East African community) – as illustration of how Chinese investment has been harnessed.
African students in China : an exploration of increasing numbers and their motivations in Beijing
(Stellenbosch University, Centre for Chinese Studies, 2012-09) Ferdjani, Hannane
This report focuses on the growing phenomenon of African students migrating to China for their studies, from a holistic and quantitative point of view, specifically, their perceptions and experiences in the system of Higher Education cooperation and exchange between African and China. The trend of educational migration has accelerated and been institutionalized since the turn of the millennium, which emphasizes the need for up-to-date research. This report is the result of Phandulwazi nge China scholar Hannane Ferdjani’s work at the CCS between May and July 2012. She conducted fieldwork in Beijing in June this year. This research report is the first fruit of the CCS scholarship programme Phandulwazi nge China (“Knowledge about China” in isiXhosa). The scholarships offer opportunities for African researchers to spend research time at the Centre in order to advance mutual learning and a better exchange on interpretations of political, economic or environmental impact of Chinese engagement in Africa. This programme is kindly supported by Open Society Foundation.
Assessing China’s role in foreign direct investment in Southern Africa
(Centre for Chinese Studies, Stellenbosch University, 2011-03) Van Der Lugt, Sanne; Hamblin, Victoria; Burgess, Meryl; Schickerling, Elizabeth; Oxfam, Hong Kong
Popular claims link the inflow of foreign direct investment (FDI) almost automatically to economic development. This notion increased in prominence with the rise of neo-liberal thinking in the 1980s. It was also fuelled by the success of the so-called Asian Tigers achieving high growth rates, coupled with poverty reduction through an outward market-policy orientation. This study explores FDI in Southern Africa and Zambia specifically, based on the analysis of policy documents and interviews with a small sample of twelve Chinese and African government officials, CSO representatives as well as private sector representatives.
The challenge in conservation of biodiversity : regulation of National Parks in China and South Africa in comparison
(Stellenbosch University. Centre for Chinese Studies, 2012-05) Burgess, Meryl
Due to the increasing depletion and extinction of the world’s biodiversity, it has become a vital process among the global community to protect the environment and safeguard natural habitats and thousands of species. In developing countries like China and South Africa, factors like the growth and development of urban and rural spaces, industrialisation, high population growth and agriculture activities have added extra pressures to the countries’ biodiversity and natural environment. For this reason, there has been an increase in the number of protected areas established, especially national parks, that are firstly established to protect biodiversity and secondly, established for education and recreation. China, known as one of the “17 megadiverse” countries in the world, is home to a large percentage of the world’s biodiversity. Due to factors such as development, industrialisation as well as a high population growth in recent decades, much of the country’s biodiversity has been harmed or threatened. Similar to China, South Africa has some of the richest biodiversity in the world, also threatened by both natural causes and human-made factors. For this reason, protected areas such as nature reserves, botanical gardens, scenic landscapes, historical areas and national parks have increasingly been established. Although China has an established nature reserve system as well as regulation thereof, the national park system in China is in its early developing phase, with national parks only having been established in one province. South Africa on the other hand has an older and established national park system, with 22 national parks regulated and managed around the country by SANParks as well as the Department of Environmental Affairs. Because national parks are considered public spaces, they have been regulated, in order to properly protect and manage the parks and the species within them. This study looks at the way China and South Africa have attempted to regulate and manage national parks. Regulation and management of parks are important as parks need to uphold the laws and policy on biodiversity conservation and environmental protection. This study thus looks at how national parks have come to do this in two countries with very rich biodiversity, high tourist numbers and development taking place, in some instances at a rapid pace.
China and the African Regional Economic Communities: Transforming Multilateral Cooperation
(2015-11) Terrefe, Biruk; Bénazéraf, David
Recently, China has increased its economic, political and military co-operation with the African Union (AU). The diversity of members within the AU makes the continental approach more complicated for both Chinese and African actors. This is largely due to the AU’s lack of instrumental capacity, resulting from its financial and structural weakness, as an inter-governmental actor. This policy brief highlights an alternative platform through which co-operation could be fostered. African Regional Economic Communities (RECs) increase the bargaining power of African states, without losing the instrumental capacity of implementing and monitoring policies effectively. China’s engagement with the RECs would not only nurture regional integration, but also enhance China’s co-operation with Africa as a whole. In the following briefing, we argue that increased co-operation with regional organisations is necessary as China’s bilateral and continental engagements face institutional, political and economic challenges. The RECs need to move to the forefront of the Sino-African dialogue in order to satisfy Africa’s aspiration for global markets and China’s interest in increased political, economic and cultural co-operation.
China as Africa’s ambiguous ally – why China has a responsibility for Africa’s development
(Stellenbosch University. Centre for Chinese Studies, 2011-06) Grimm, Sven
This paper explores the changing nature of Chinese-African relations in the early 21st century and, in a second step, assesses Chinese responsibilities for African development. Sino-African relations have profoundly changed in character as a consequence of economic policy shifts in China, coming with readjustments in Chinese foreign policy. China is an emerging world power – and increasingly an important partner to African states. The Asian engagement in Africa is not new, and we have seen a small wave of literature on Chinese engagement already in the mid-1970s to early 1980s. Chinese government engagement in Africa is a constant feature since the days of Mao Zedong. Yet, China‟s engagement with Africa with regard to trade, investments, assistance, and – not least – diplomatic activities has been increasing tremendously since 2000. Sino-African relations are becoming more important in their own right, but also as a consequence of the global rise of China. The recent global economic crisis has arguably further accelerated the already rapid change in economic weights in the world, making the shift towards Asia more pronounced. China‟s relationship with Africa is unequal, whatever the rhetoric around it. China is currently the second biggest economy in the world and it is likely to become even stronger, gaining (or regain, in a historical perspective) global economic weight within the next decade or so. One emerging economy, China, is in need of resources and markets as well as political backing for its peaceful global rise on the one side. And on the other side, we find 49 African states with rather small and often fragile economies engaging with China and other external powers. The stark inequality in economic and political weights results in Chinese responsibilities for African development, this paper argues, which is distinct from tutelage or undue interference. While China emphasises its very distinctness from „traditional donors‟ – not least so as this is arguably a cornerstone in its „soft power‟ in Africa – some challenges are, in fact, arising to African economies or societies from China‟s very size. Action as well as inaction in Chinese international and domestic policies will have consequences for development in other parts of the world, not least in Africa. Research on Chinese-African relations is thus quickly becoming similar to the research on other great powers‟ relations with Africa, even if China is both, a great power and a developing country. This paper provides an overview what we know about effects of Chinese engagement on Africa. The diversity of the African setting in mind, this paper will refer to individual cases as examples, aspiring to provide an overview without unduly generalising. The paper aspires to cast a light on aspects where China‟s rise impacts on African development and which we do currently not know enough about. How immediate or intermediate are the effects of Chinese engagement? Which actors do we have to take into account when we speak of "China" as one entity – and who exactly in China has to take responsibilities for African development? The paper explores the state of debate on direct and indirect effects of China‟s global rise on African states and aims at identifying areas of responsibilities for China and for African governments. In conclusion, it casts a light on the policy requirements for African states in their engagement with external powers and gives indications of a research agenda on China‟s growing global reach.
China goes global in Egypt : a special economic zone in Suez
(Stellenbosch University, Centre for Chinese Studes, 2013-02) Scott, Emma
This Discussion Paper examines China's economic and technological zone in Suez, Egypt, in view of the Go Global policy. In order to establish a comparative framework for examining whether the Suez Economic & Trade Co-operation Zone was modelled in line with China's Special Economic Zones (SEZs), this paper maps out the key features of the Tianjin Economic-Technological Development Area (TEDA), as Tianjin Investment Holdings was the partner appointed by the Chinese government to develop the Suez zone. Not only does the paper find support for this argument, but also finds evidence to state that the Chinese government has been involved in shaping Egypt's special economic zones projects from the very beginning. The findings also show that the aims of Go Global policy are being realised through the Suez zone. The zone has potential; however, there exist a number of pitfalls of which China should be weary including over-expenditure and Egypt's domestic politics. A surprising finding was that TEDA is set to become a bigger and more important actor in China's Africa strategy, where Egypt is only the beginning.
China's economic hard landing impact on Africa : a scenario analysis
(Stellenbosch University, Centre for Chinese Studies, 2016) Igbinoba, Emmanuel; Hoaeb, Rodney
Shocks to aggregate commodity demand from China are having significant impact on global commodities and commodity prices. Fears persist that the economic slow-down in China might be steeper and more chaotic than anticipated and reported, as China rebalances its economy thus impacting on growth prospects across world economies. Using a scenario analysis technique, this study evaluates a risk scenario if economic growth in China falls to 4 per cent rather than the projected 6.5 per cent and its associated impact on African economies. The impact of China’s economic slowdown on African economies from an export perspective shows that there is an urgent need for African countries to undertake structural upgrading and diversifica-tion of different sectors of the economy with particular emphasis on agriculture in order to mitigate reduced demand from China.
China-Africa joint research and exchange programme : Forum on China Africa Co-operation (FOCAC)
(2014-10) Vhumbunu, Clayton H.
The paper identifies and analyses the main vectors of China’s accelerated development including economic, governmental, cultural, educational, infrastructural, technological, and agricultural reforms, examining how these serve as models of poverty eradication, the work draws ideas for the acceleration of development in Africa. It presents a holistic overview from which applicable lessons can be drawn. The paper acknowledges the fact that China is a unitary state with more than 1.3 billion people, whilst on the other hand, Africa, despite a general consensus to reduce poverty, is a continent with now over one billion people spanning 55 fragmented economies. What lessons can be drawn from the development experience in China to accelerate the African integration agenda? The paper argues that China’s success today is largely due to the nurturing of a visionary and dedicated leadership system based on an orderly succession system; capable and competent bureaucracy; effective policy planning and co-ordination; and policy discipline. In recommendation, the paper suggest that Africa strengthens and broadens regional policy planning and co-ordination mechanisms taking into consideration the global political economy context and the continent’s psycho-social structure. This research was undertaken for Southern African Research and Documentation Centre (SARDC), www.sardc.net, Knowledge for Development Institute for China Africa Studies in Southern Africa (ICASSA).
The China-African Development Fund (CADFund) as a sovereign wealth fund for Africa’s development
(Stellenbosch University, Centre for Chinese Studies, 2013-07) Grimm, Sven; Schickerling, Elizabeth
The China-Africa Development Fund (CADFund) forms part of the Chinese government’s practical implementation, for some of its plans and objectives, for the African continent. CADFund was established as part of the eight measures announced by then Chinese President Hu Jintao, at the 2006 Forum on ChinaAfrica Cooperation (FOCAC). While operating according to market principles, the Fund is an economic and diplomatic tool of the Chinese government to encourage Chinese enterprises’ investments in African countries. Chinese investments might boost African economies; yet, there is no automaticity in developmental effects. CADFund’s operations as a sovereign wealth fund can be compared to other such funds in the African context. This policy brief elaborates on the setting and policy of CADFund, specifically in comparison to Norfund, Norway’s sovereign wealth fund for investments in developing countries, which also has a development vocation. The policy brief concludes with recommendations for change.
China-Egypt trade and investment ties – seeking a better balance
(2015-06) Scott, Emma
This policy brief examines Chinese investments in Egypt and the bi-lateral trading relationship between the two countries in order to better understand the extent of economic engagement. Since 2013, a spur in high-level diplomatic exchanges led to the signing of numerous agreements, including a Comprehen- sive Strategic Partnership agreement. Promises of Chinese foreign direct investment (FDI) into large-scale transport and energy infrastructure projects have been cited. With the trade balance heavily tipped in favour of China, this policy brief identifies ways for Egypt to more broadly benefit from the relationship.
China-Mali relationship : finding mutual benefit between unequal partners
(Stellenbosch University, Centre for Chinese Studies, 2014-01) Esterhuyse, Harrie; Moctar, Kane
Since 2000, China-Africa co-operation has seen a rapid increase in scope and size. The West African nation of Mali is one of the 50 African states with diplomatic relations with China; its experience allows for possible parallels with other African states in their engagement with a much more potent partner. Within the Forum on China-Africa Cooperation (FOCAC), China and Africa outline economic, political and social engagements that are envisioned to help the establishment of a “win-win” partnership based on South-South solidarity. The China-Africa partnership has however come under increasing criticism from inside Africa; the perceived uni-directional flow of economic benefit in the relationship has been blamed for stagnation of industrialisation and destruction of entrepreneurialism amongst others. Within the changing context, this policy briefing explores the relations between China and Mali, looking at the history of China-Mali relations and the positive and negative effects this relationship has had on Mali. This briefing concludes with recommendations on how the current relationship between China and Mali can be adapted to allow for more benefits on both sides.
China’s economic slowdown : assessment and implications for Africa
(Stellenbosch : Stellenbosch University, 2016-04) Igbinoba, Emmanuel; Centre for Chinese Studies. Policy Briefing
Three decades of average double digit growth has helped propel China into the world’s second largest economy with global economies increasingly reliant on China to drive economic growth. As China transits from an investment-based economy to a consumer-based economy, its demand for raw materials is declining, affecting commodity prices, impacting on commodity sellers and exerting pressure on currencies around the world. With China’s position as Africa’s biggest trading partner, fears persist that the economic slowdown in China is being widely felt in Africa due to the huge trade volume between China and Africa, thus exposing African economies to spillages from the Chinese economy. This policy brief examines the current state of the Chinese economy and its impact on African economic growth and recommends a blend of policy measures aimed at curtailing the impact of the Chinese slowdown on Africa's economy.
China’s role in the East African oil and gas sector : a new model of engagement
(Stellenbosch University, Centre for Chinese Studies, 2012-08) Anthony, Ross
The oil and gas bonanza currently underway in East African looks set to alter the broader economic and geopolitical landscape of the region. As China continues its quest for energy security, East Africa is becoming an increasingly important region. Both Chinese state and non-state companies have gained a foot-hold in Uganda, Tanzania, Ethiopia and Kenya, where they are involved in both upstream and downstream activities. The Chinese presence, while significant, is off-set by a host of Euro-American, Middle Eastern and other Asian companies also involved in exploiting the region’s energy reserves. Infrastructural underdevelopment in the region is forcing Chinese companies to engage on the continent in new ways including the rise of joint Chinese-Euro-American ventures. This trend, in which China and its partners own financial stakes in infrastructure projects located in geo-politically unstable regions, will have future implications regarding security and national sovereignty within the region.
A Chinese company’s investment strategy in South Africa: the case of Hisense
(Gesellschaft fur Erdkunde zu Berlin, 2016) Kim, Yejoo
Hisense, a Chinese home appliance manufacturer, entered South Africa’s TV market in 1996 and the company has since expanded its operations. Now Hisense is one of the major players in the TV market in South Africa. The company’s success can be measured through a mix of the four P’s of marketing: price, product, promotion and place (distribution). The successful combination of strategies helped Hisense penetrate South Africa’s TV market and acquire a growing market share. As a result, Hisense has contributed to export-led economic growth, technology transfer and job creation, among other development-related benefits to the host country. However, at the same time Hisense has faced challenges including problems with labour relations, e.g. poor working conditions and violations of minimum wage regulations. Most of these problems are recurring issues. This shows that overcoming these challenges is not an easy task for Chinese investors operating in South Africa or elsewhere in Africa, and questions remain regarding whether Chinese investment can contribute to fostering Africa’s industrialisation as well as China’s soft power.
Chinese engagement in African security — pragmatism and shifts under the surface
(Stellenbosch University, Centre for Chinese Studies, 2013-09) Anthony, Ross; Grimm, Sven
As China’s economic expansion continues, its role in global international affairs has become more prominent. Not least so Chinese trade and investment in Africa will have implications regarding peace and security, both within Africa but also globally. The security implications of this relationship are broad, ranging from the political calculus of setting up businesses and securing assets, to the far broader picture of China’s role in regional and global security architectures. These micro- and macro-processes are linked in significant ways, as frequently witnessed in commodities industries, where the investment and securitization of raw materials in fragile states have direct implications for larger concerns such as national and global energy strategies, regional and geo-political security. This brief analyses current trends and debates, and provides recommendations for a way forward.
Chinese investors – saving the Zambian textile and clothing industry
(Stellenbosch : Stellenbosch University, 2012-10) Eliassen, Ina; Stellenbosch University. Centre for Chinese Studies
In the context of reduced aid from traditional donors and the changing modalities of aid, FDI from non-traditional development partners as China has become an important driver for development agenda’s in African countries. As FDI does not automatically lead to economic growth and poverty reduction, and since there is no single “Chinese model” for economic cooperation, it is up to African leaders to ensure institutions and policies to reap the benefit of FDI. This paper sets out to further our understanding of how Chinese investments in the Zambian textile and clothing industry impacts economic development, as a sector important for employment creation and ultimately poverty alleviation. Overall, this paper demonstrates the challenges to industrialise in the context of a liberal market and the globalised international economy. Despite Chinese engagements in manufacturing, Zambia remains an exporter of unprocessed natural resources and loses out in terms of economic development from TC manufacturing activities.
Chinese involvement in the Senegalese peanut trade : threat to local markets and processing industries
(2014-08) Cisse, Daouda
To deal with household socio-economic difficulties in rural areas in Senegal, peanut cultivation was introduced by French colonial powers at the beginning of the 20th century. The cultivation was to enable Senegal’s domestic agricultural economy to generate revenues and contribute to the development of its agro-processing industries. Over the years, it has become a source of revenue for many families living within the groundnut basins across the country as well as being an important resource for peanut processing industries. In 2010, the liberalisation of the peanut trade in Senegal enabled Senegalese peanut farmers and producers to directly sell to foreign buyers; including the Chinese.
A Chinese perspective on South Africa as an emerging power : global, regional and bilateral implications
(Stellenbosch University. Centre for Chinese Studies, 2011-12) Niu, Haibin
The active international profile of South Africa has attacted China’s increasing interests to cooperate with it at both regional and global levels as well as bilateral level. Globally, both countries share responsibilities to maintain international peace and security, deal with climate change, promote Africa’s development, and reform major international institutions. Regionally, both are major players which have big influence on Africa’s peace and development. The bilateral relationship between China and South Africa will have more and more strategic influence given its increasingly regional and global implications.

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