Chinese Investment

Melanie Veness:  PCB CEO

I attended a very interesting breakfast last week, at which Alec Hogg shared some fascinating insights gleaned at the World Economic Forum (WEF). There was some discussion around the benefits of South Africa being invited to be part of BRIC (now BRICS) and leading on from this, about the strength of the Chinese economy.

Discussing China always invokes mixed feelings, because of the devastating impact that cheap Chinese imports have had on local industry.  Our labour-intensive industry, in particular the clothing and textile industry, has been hard hit, largely because of an inability to compete, due to questionable Chinese labour practices. 

In the main, South African consumers don’t understand the far-reaching implications of not buying “SA Made” product. How do we educate our nation to understand that if we don’t prioritise buying “SA Made”, then we are contributing to the unsustainability of local industry and to the loss of local jobs?  If we are able to sensitise consumers to the real cost attached to buying goods made in China, we might be able to create more demand-pull for SA products. Australia is very effective at doing this – Australians will pay more for Australian-made goods out of a sense of economic patriotism. 

The negative sentiments notwithstanding, one can’t but admire the Chinese work ethic. The reality is that Chinese people are hard-working and industrious, and there is much that we can learn from them, especially in education.  Hogg related a story about an American businesswoman at the WEF who was concerned about  American children being sufficiently equipped to compete in the world arena. She went on to say that American children go to school five days a week for six to seven hours a day, whereas many Chinese children go to school  for 10 hours a day, six days a week.  The result of this, she said, could be seen in the number of Chinese students at  leading universities in the world.  In turn, high-level academic achievement translates into top jobs globally.

Because of the close familial bonds of Chinese families, children support their parents and some of this foreign-earned currency finds its way back to China. The other obvious benefit of a well-educated nation is that highly educated men and women – some of the greatest minds in the world – invest considerable intellectual capital in China and, by by process of osmosis, in developing economic strategies throughout the world.

Of real concern though is the amount of Chinese investment in Africa. Alarm bells should be ringing as China is striking deals all over Africa to build infrastructure in exchange for parcels of land and citizenship for groups of Chinese people.  When factories are built on those tracts of land, employing new Chinese citizens, and these factories begin to compete with local industry, what will happen to the unemployment levels in Africa? Not all investment is good investment; we need to guard our resources and educate our nation better.

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