While in China, Zuma takes a beating back home

BEIJING, China — While South African President Jacob Zuma sings the Chinese government’s praises and pushes for increased trade with Beijing, back home he is under fire as more than a million workers enter the second week of a devastating strike.

In a speech today at Beijing’s Renmin University on the second day of an official visit to China, Zuma spoke glowingly about the shift in power away from Western countries and the rise of emerging economies, in particular China.

This is the last stop on a tour of major emerging markets that has seen Zuma travel to Brazil, Russia, India and now China in little more than a year since taking office, in a bid to boost trade and investment and lobby for South Africa’s entry into the group of BRIC countries.

But back in South Africa, union leaders are angry that he is abroad at a time when a strike over wages by civil servants has seen schools shut and the army sent in to hospitals to prevent disruptions by strikers after reports of deaths of patients, including babies, from lack of care.

“Zuma shops in China while strikers ruin SA,” said the front page of The Times, a Johannesburg newspaper. Zuma’s absence has drawn comparisons to the frequent overseas trips of former president Thabo Mbeki, criticized for leaving the country in times of crisis.

In Beijing, Zuma’s visit received the typical press treatment by state media — glowingly positive, boasting of cooperative, win-win partnerships, and prominently featuring the obligatory “grip and grin” photo with President Hu Jintao.

In his speech this morning, Zuma indirectly praised Beijing’s authoritarian political system, asking what South Africa can learn from the Chinese government. “Is the political discipline in China a recipe for economic success for example?”

Speaking yesterday to the South Africa-China Business Forum, he highlighted the historical claims often cited by the Chinese government when defending its presence in Africa, noting that the Mapungubwe kingdom in South Africa’s Limpopo province had commercial ties with China more than a thousand years ago.

“However, colonialism interrupted these mutually beneficial relations,” Zuma said. “The rise of China indicates that the world is now returning to its historical economic powers and trade patterns.”

Zuma is on a three-day visit to Beijing and Shanghai with a delegation of 11 cabinet ministers and more than 350 businesspeople in tow – the biggest ever group brought abroad by a South African leader.

Some 15 agreements have been signed between China and South Africa companies on this trip, in areas including railways, mining, telecoms and power transmission. One of the more significant deals is the acquisition by Discovery Holdings Ltd., a South African private health care insurer, of a 20 percent stake in China's Ping An Health Insurance Co.

In a major potential development, talks have begun between the South African government and China Railway Group on the feasibility of constructing a $30 billion high-speed rail link between Johannesburg and the port city of Durban.

Martyn Davies, chief executive of Frontier Advisory, a Johannesburg-based consultancy, noted that most of the signings on this trip have been memorandums of understanding or letters of intent rather than actual deals. Compared with the large number of businesspeople in tow, deals between South Africa and China have been relatively few.

Davies argued that this trade junket was more about South African businesspeople networking and connecting with government — their own government as well as the Chinese — than it was about seeking investment.

“This is a political visit in the global context. That’s why we are not seeing a lot of commercial deals,” said Davies, who is in Beijing as part of the South African delegation.

South Africa is by far the worst performing emerging economy, with GDP growth forecast at a sluggish 2.3 percent this year. Zuma said today that South Africa is aiming for at least 7 percent growth in the “near future,” to be achieved through government investment in electricity, education and public transport.

On a visit to Moscow earlier this month, Russian President Dmitry Medvedev spoke out in favor of South Africa’s bid for entry into the BRIC club, but China’s backing will be crucial. The next BRIC summit will be held in China in 2011.

Zuma has emphasized that “South Africa is open for business,” but the challenge is for the country to land higher-value investments from China, away from the current focus on minerals and raw materials. South Africa is trying to encourage Chinese manufacturers to produce value-added goods in the country, such as vehicles, railway cars and power equipment.

A World Bank study published last month said that South Africa’s high labor costs are deterring foreign investment, badly needed in a country grappling with high unemployment and poverty.
"South Africa is attracting far less foreign direct investment and exporting less industrial output than many countries in the same peer group," the report said.

Last year, South Africa saw a record $2.7 billion trade deficit with China, the country’s largest trading partner.

South Africa’s textile and clothing industries have been decimated by cheap Chinese imports, despite a voluntary import restraint negotiated with China and introduced in 2007 in an attempt to save jobs at home.