The most crucial factor in whether South African SEZs succeed may well be the complicated role of China.
There are three aspects worth discussing: overall demand; Chinese incoming FDI to South African SEZs (such as is driving Coega and Musina-Makhado); and Chinese-financed and built competition via the Belt & Road Initiative, which is spawning massive export-oriented infrastructure in many India Ocean cities, ports and hinterlands.
Chinese Capitalist Crisis Tendencies
Being the largest economy in Purchasing Power Parity terms, the country’s GDP is estimated to rise at only around 6% in 2019, the lowest rate in 25 years. In mid-2017, the International Monetary Fund (2017) studied Chinese capital overaccumulation and found that in major sectors – coal, steel and nonferrous metals, cement, chemicals and others where Chinese demand is between 30-60% of the world market – there exists at least one third overcapacity in production. And due to overindebtedness, a financial crisis can break out at any time, causing domestic and global growth to fall and worsening the living conditions of hundreds of millions of Chinese people.
Chinese Overaccumulation : Capacity Underutilisation in Sectors with High Global Share
Source: IMF 2017
Still, notwithstanding its own production of raw materials, China’s role as the main economic driving force in Africa is unmistakeable, especially for commodity-exporting countries (Sheldon et al, 2017; Gu and Kitano, 2018). China has become Africa’s single largest source of FDI, the fastest-rising source of trade, as well as a significant supplier of foreign aid and grant-based infrastructure (Bello-Schuneman et al, 2017; Sheldon et al, 2017; Gu and Kitano, 2018). Environmentally, its mega-projects are already having a major impact, including planning for the largest dam ever conceived – at Inga on the Congo River – and numerous coalfired power plants, as well as mineral and oil extraction projects.
At a political level, the establishment of the Forum for China-Africa Cooperation (FOCAC) in 2000 cemented closer working relations (Cisse, 2012; Zhang, 2017). Yet, the FOCAC form of South-South cooperation brings with it the potential not only for GDP growth in select enclaves, but also new competition for South Africa’s SEZs, exploitation and a worsening of long-standing structural distortions left by colonialism, especially where commodities remain the mainstay of exports and FDI (Zhang, 2017). Moreover, China’s political success has also generated military tensions what with the Trump Regime’s John Bolton declaring in December 2018 that a new Cold War (with China) has begun in Africa.
