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China: South Africa's latest role model?

South African leaders like the "Chinese model" of state-directed capitalism.

South african president china 2012 02 09Enlarge
South African President Jacob Zuma (R) looks over at Chinese President Hu Jintao (2nd L) during the meeting between their delegations in Beijing on August 24, 2010. Some economists speculate that the South African government is looking to China as a possible economic role model. (Str/AFP/Getty Images)

JOHANNESBURG, South Africa — The newspaper headline posted on a Johannesburg street made it sound racy: “Zuma's Chinese Model.”

And perhaps even scandalous: “Gigaba Pushes Chinese Model,” screamed another headline.

But rather than some leggy Chinese supermodel, the target of South Africa’s politicians is something even more enticing: the Chinese economic boom. Those headlines were about South Africa’s desperate quest for job growth, and the inspiration drawn from frequent “study tours” to Beijing by senior members of the ruling African National Congress party.

The “Chinese model,” sometimes described as “state-directed capitalism,” relies on infrastructure investment and centrally coordinated state-owned enterprises to create growth — in China’s case, double-digit growth that has left other emerging economies drooling with envy.

In South Africa it is seen as a way to create badly needed jobs, a key promise of President Jacob Zuma’s government, which has a target of creating 5 million jobs by 2020.

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In his State of the Nation address Thursday night, President Zuma elaborated on this new development plan for South Africa, although he stopped short of mentioning China, his country’s biggest trading partner with $45 billion in trade last year, an increase of 77 percent.

“For the year 2012 and beyond, we invite the nation to join government in a massive infrastructure development drive,” he said, hailing the country’s new road forward.

Malusi Gigaba, public enterprises minister and a member of the ANC’s national executive committee, has also been pushing the so-called “Chinese model.”

Gigaba visited Beijing last year, along with economic development minister Ebrahim Patel, to study China’s mammoth parastatals and learn how they are used to boost that country’s economy while under close central government supervision.

But he has since denied being inspired just by China.

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“This is no call for a Chinese or any other model, but a call for a 'Proudly South African' model that takes into consideration our own experiences and developmental aspirations,” Gigaba wrote in a recent opinion piece.

Martyn Davies, CEO of the Johannesburg-based Frontier Advisory consultancy, said China's impact in Africa has gone beyond trade and infrastructure. It now serves as an example of a successful developing country with a system different from the Western economic model, he said.

For South Africa, this approach is especially appealing at a time when there is increased pressure for the government to be seen as more active in driving the economy.

But Davies noted that "it is risky to simplify China's experience and call it a 'model' ready for application elsewhere."

For example, he said, in addition to strengthening state-owned enterprises, South Africa must also stimulate its private sector — a major part of China’s economic success, though sometimes overlooked in the mix.

“The private sector part will be ideologically more difficult for South Africa,” he said.

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Critics point out that South Africa’s situation is very different from that of China’s.

“The problem is that Chinese capitalism is so idiosyncratic and bound up with its history as a previously communist state that parallels with SA are hard to draw,” said an editorial in Business Day.

“The political and economic situation is vastly different,” it added.

And some countries, while envious of China’s economic achievements, say that its development model is unsuited to their own countries.

“Be it the industries, railway or agriculture, China is supremely developed in these sectors,” Nitish Kumar, chief minister of India’s impoverished Bihar state told reporters after returning home from a trip to China last year.

“But we are a democratic nation developing in our own ways," said Kumar. "It is not possible for us to adopt the process and technology China has used.”

http://www.globalpost.com/dispatch/news/regions/africa/south-africa/120209/china-south-africas-latest-role-model