About South Africa's economic level and security

After a century and a half of mining development and industrial process, South Africa has built up a world-leading mining industry and a relatively complete range of manufacturing industries as well as modernized agriculture, and has a fairly complete financial system and infrastructure. 1994 after the establishment of the new system of racial equality, South Africa's economy has gained an unprecedented space for development, and Africa and the world have quite high expectations for South Africa. However, international capital is skeptical about the ability of the black regime to manage the developed South African economy and is taking a wait-and-see attitude. In the past decade, although the majority of black poverty and high unemployment rate is still plagued by the socio-economic development of South Africa, but South Africa's successful political change and stable economic transition, recognized by the world, for the future development of South Africa laid the foundation.

Unlike the idea of self-appointment as part of Western civilization during the white racist regime, the new South African government's development philosophy and strategy is based on Africa. South Africa cannot take off on its own without the African continent, and Africa's economic development and integration process has benefited from being driven by South Africa. Ten years of interaction between South Africa and the African continent reflects this, and this trend will be more obvious in the next decade.

I. South Africa's economy is poised to take off

1. Maintaining macroeconomic stability while undergoing political change.

South Africa since the abolition of apartheid in 1994, the establishment of a democratic system of racial equality, to achieve political stability and national reconciliation, which brings unprecedented favorable domestic environment for economic development. In the past ten years, South Africa has put an end to the economic recession in the late stage of apartheid, reformed and adjusted the inter-racial economic inequality and dual economic structure caused by the old system while maintaining macroeconomic stability, and basically maintained a healthy development of the economy, with a more optimized investment environment and economic structure, a strengthened capacity to cope with the challenges of globalization, and a good economic and social momentum of development.

According to the data of the official "Ten-Year Review" published by South Africa, from 1994 to 2003, South Africa's GDP grew at an average annual rate of 2.8% (excluding the years affected by the Asian financial crisis, the growth rate reached 3.5%); GDP per capita grew at an average annual rate of 1%; the fiscal deficit increased from 9.5% of GDP in 1993 to 9.5% of GDP in 2003; and the fiscal deficit increased from 9.5% of GDP in 1993 to 9.5% of GDP in 2003. The fiscal deficit declined from 9.5% of GDP in 1993 to 1% in 2002-2003; public sector debt declined from 64% of GDP in 1994 to 50% in 2003; the South African Reserve Bank's net liabilities on the international foreign exchange market, which amounted to US$25 billion in 1994, declined to US$22.5 billion in 1998 and went to zero in 2003; and the foreign exchange reserves of the South African Reserve Bank declined in the meantime. The share of manufacturing goods in total exports rose from 25% in 1994 to 38% in 2003; private sector investment grew at an average annual rate of 5.4%; and real disposable household income rose by an average of 3% per annum over the period 1993-2003 on a combined basis. At the same time, South Africa has joined and is an active member of almost all international economic organizations. As a rule, South Africa is a priority country for the outside world to enter into free trade agreements with African countries. Two regional economic organizations, namely the Southern African Development*** Community and the European Union, have signed free trade agreements with South Africa, while negotiations on a free trade agreement between South Africa and MERCOSUR*** have been completed and are awaiting ratification by the parliaments of the countries concerned. Currently, the countries and regional organizations with which South Africa is engaged in free trade negotiations include the European Free Trade Association (Switzerland, Norway, Iceland and Liechtenstein), India, China and the United States, while South Africa is also exploring the signing of free trade agreements with countries such as Nigeria and certain regional organizations in Africa. And, South Africa also enjoys trade preferences granted by the U.S. African Development and Opportunity Act.

Currently, the South African economy is experiencing the longest period (23 quarters) of stable macroeconomic upturn in half a century, with GDP growth averaging 3.5% per annum during this period. economic growth reached 5% in the second half of 2004, and averaged 4.25% for the year as a whole. South African domestic demand was strong and fixed asset investment rose .

2. The economic status of black people has improved.

Along with the political change and the inevitable adjustment of economic interests. South Africa's economic change is not a revolution in the nature of ownership, but an adjustment in the distribution of resources. In addition to legislation to abolish all racial discrimination, the South African government's main means is through fiscal policy and economic and social development programs to help black people, to correct the economic inequality caused by the apartheid system. The South African Government's budgets for successive years have included increasing expenditures on public services for the underprivileged. In the South African government's budget allocation in previous years, education, public **** health, welfare and social services programs accounted for 50% of the total budget, reached 59% in 2004, of which education spending accounted for more than 20%, health spending accounted for more than 10%.

In order to redress the deprivation of Black people (the so-called "non-whites", including Africans, Indians and Coloureds) in terms of the means of production and opportunities for development (employment, education) under apartheid, the new Government, in the ten years since its inception, has enacted and implemented Affirmative Action and the Broad-based Black Economic Support Act (Broad-Based Black Economic Support Act), which have been implemented by the Government. In the ten years of its existence, the new government has enacted legislation such as the Affirmative Action and the Broad-Based Black Economic Empowerment Act (BEE) to promote and assist black people to develop economically, not only to improve the basic living conditions of black people, but also "to bring about a substantial change in the racial composition of the ownership and management structure".

According to the figures in the South African Minister of Finance's 2004 budget speech, the performance of the past 10 years in improving the basic economic and social needs of the black population has included, among other things, the construction of 1.6 million housing units, the building of 700 new health clinics, the supply of tankered drinking water to 9 million people, the provision of new sanitation facilities to 6.4 million people, the implementation of the Primary School Nutrition Program (PSNP) which has benefited 4.5 million children, and the number of people covered by social assistance payments. 4.5 million children benefited from the implementation of the Primary School Nutrition Program, the number of people covered by social assistance payments increased from 2.9 million to over 7.4 million, and so on. In the coming years, the South African government's top priority for poverty eradication will be the creation of employment opportunities.

Since 1994, a growing black middle class is emerging in South Africa. According to the South African Department of Trade and Industry (DTI), blacks already account for 10 percent of business owners and 15 percent of technicians. In terms of the racial composition of the consumer population, there are 18 million blacks in South Africa out of a total of 4.5 million high-income earners, or about 40 per cent (2004), and since 2000*** 270,000 blacks have moved into the higher income bracket, the "middle class". In the period 2000-2003, 390,000 South Africans, 70% of whom were black, moved into the middle class.

3. Emerging industries have become a point of growth.

One and a half centuries, the unique precious metals and strategic mineral resources has been the pillar of the South African economy, the formation of the mining industry as the center of modern mining, smelting and related processing manufacturing, financial and scientific and technological industrial system. 1994, with the South African economic development of the international space for the unprecedented opening up of South Africa's manufacturing industry and scientific and technological information industry has developed rapidly, and the industrial structure with the development of changes. The industrial structure has changed accordingly. At present, the mining industry is still the advantage of South Africa's economic development, but it has declined in the proportion of GDP, the proportion of manufacturing and service industries increased, the rapid development of information and communication technology industry, an important factor in driving economic growth.

The South African government attaches importance to science and technology and the development of new industries. 1996, the South African government established the Innovation Fund. The government's budget for scientific development has increased by 27% in the past five years. 2002, the government approved the National Research and Development (R&D) Strategy, one of the purposes is to improve the competitiveness of enterprises, while focusing on the development of human resources, especially the training of black scientific and technological personnel. In recent years, South Africa's investment in R&D has been increasing year by year; in 2001-2002, R&D investment amounted to 7.5 billion rand (about US$1 billion), accounting for O.76% of GDP in that year. The South African government increased its R&D spending to 1% of GDP in 2005.

Telecommunications is the fastest growing industry in the South African economy. The government emphasizes the importance of the ICT sector in the economy, and relevant policies play a key role in the development of this industry. Currently, South Africa ranks 23rd in the world in terms of telecommunication development and 17th in terms of Internet usage. South Africa leads Africa in the number of Internet users, reaching 2.89 million by the end of 2001. South Africa's mobile communications growth rate in the world's fourth, by October 2003, South Africa's cell phone subscribers reached 15 million households, is expected to 2006 can reach 21 million households.

Information and communication technologies are more widely used in South African enterprises than in the United States and Europe, and government and corporate investment in information technology applications is among the highest in the world. Several of South Africa's major banks are increasing their investment in the use of satellite and mobile communications technology in order to expand their operations in rural areas. In order to meet the challenge of hosting the 2010 World Cup soccer tournament, South Africa plans to build its ICT infrastructure on a large scale over the next five years. FDI in the ICT industry in South Africa has surpassed that in the mining and extractive industries.

4. The trend of domestic investment is getting stronger.

In recent years, the three major sources of investment in South Africa, namely, domestic private investment, government financial investment and foreign investment, have all experienced rapid growth. Steady growth in fixed asset investment began in 2002, reflecting the high level of investment made by the South African government to strengthen infrastructure and improve public **** services. Although there are still some uncertain international factors in the investment environment, economists believe that South Africa has a variety of factors conducive to investment, such as low interest rates, low inflation, strong consumer demand, etc., is bound to attract the attention of investors.

In recent years, South Africa's large multinational companies have increased investment in the country. For example, the world's second largest brewing company South African brewing company is ready to invest in the next five years in the country 5 billion rand, South Africa's Sasol (with the world's leading coal-to-oil technology) is ready to invest 1.5 billion rand, South Africa's automobile manufacturers in 2004, the investment reached a peak of five years - 3.5 billion rand. At the same time, large investment projects driven by construction and automobile manufacturing will also lead to more investment activity by small and medium-sized enterprises (SMEs), and this round of large-scale investment will lead to job growth. With the past 10 years the main purpose of investment is to increase the degree of automation and improve international competitiveness, the current investment fever is mainly focused on the country's consumer demand and good prospects for domestic economic development. South Africa's state-owned enterprises also have large-scale investment plans, such as the South African Power Corporation and the South African Transport Corporation is ready to invest 165 billion rand for the improvement of South Africa's infrastructure.

The large-scale investment plans of South African domestic companies show that the business community continues to be optimistic about the investment climate in South Africa's confidence, which will also have a positive impact on potential foreign investors. 2001, foreign direct investment amounted to 370.7 billion rand, compared with only 54.7 billion rand in 1995. More than 90% of foreign investment was concentrated in four sectors: finance, mining, manufacturing and community social services. Europe continues to be the largest source of foreign investment in South Africa, accounting for 57.3% of South Africa's foreign investment in 1995, rising to 68.5% in 2001. Over the same period, the share of foreign investment from the Americas declined, while the share of foreign investment from Asia and Africa remained virtually unchanged.

Over the past decade, South Africa has ended its isolation and sanctions by the international community and has truly gained an open world market. In this situation, South Africa's multinational corporations and financial institutions are the first to benefit, not only the traditional European and American markets reopened to South Africa, and Africa, Asia, Latin America, the vast areas of South African enterprises to develop a new world. International trade, investment and personnel exchanges to an unprecedented scale for South Africa to bring opportunities for development.

Second, South Africa's strategy for Africa and its position in the African economy

1. Africa-based development strategy.

South Africa is a regional political and economic powerhouse in Africa, and its diplomatic strategy is Africa-based, prioritizing Southern Africa. From Mandela to Mbeki have attached great importance to relations with other African countries. In recent years, South Africa has been active in promoting African unity and self-reliance, participating in peacekeeping and conflict mediation, and providing emergency disaster relief and assistance, thus establishing the image of a responsible regional power. At the same time, South Africa pays attention to consultations with other regional powers in Africa, *** with a role in the settlement of African affairs, especially close relations with Nigeria, to increase 'strong cooperation between the two sides in African affairs.

Mbeki, an advocate of African renaissance, called on people to contribute not only to the wealth of South Africa but also to the renaissance of Africa, so that the 21st century would become "Africa's century". Under the impetus of South Africa, African countries have formulated the New Partnership for Africa's Development (NEPAD) and established a series of relevant institutions and mechanisms to promote Africa's integration and comprehensive economic and social development. For example, the African Renaissance Association has been established to explore the relationship between political democratization and traditional cultural values, and to strengthen coordination and cooperation among African countries in such areas as education, communications, economic statistics and public health. The South African Government has also approved the establishment of the African Renaissance International Cooperation Fund to provide assistance to other African countries and to utilize external assistance to carry out cooperation projects with other African countries. Of course, South Africa does not just pay, its improved relations with other African countries, but also promote its own trade and economic cooperation with other African countries, to develop the African market.

The South African government has also used international institutions and forums to actively appeal for Africa's interests, including forgiving Africa's debt, canceling agricultural subsidies in developed countries, and fighting for the legitimate rights and interests of African countries in the international economy, so as to link its own economic interests more and more closely with Africa's development.

2. South Africa's economic position in Africa.

In the mid-1990s, before the political change, South Africa's total economic output already accounted for 1/4 of the continent's GDP, about 40% of sub-Saharan Africa, and 80% of Southern Africa; South Africa produces more than 50% of Africa's electricity; 83% of Africa's iron and steel production; 97% of Africa's coal production; 69% of Africa's total railroad freight; and more than 50% of Africa's total car ownership. South Africa produces more than 50 percent of Africa's electricity; 83 percent of Africa's steel production; 97 percent of Africa's coal production; 69 percent of Africa's total rail freight; more cars than the rest of Africa combined; 45 percent of Africa's paved roads; and 5 million telephones, 38 percent of the continent. South Africa is also the only important manufacturing base in sub-Saharan Africa, with the absolute advantage of technical and managerial personnel.

In 2000, South Africa's gross domestic product (GDP) accounted for nearly 47% of sub-Saharan Africa's GDP, or 38.1 8% if calculated on the basis of purchasing power average. South Africa's industrial output and mining output accounted for 40% and 45% of Africa's output, respectively.In 2001, South Africa's gross national income was 22.8% of Africa's, 39.6% of sub-Saharan Africa's, and 70.3% of Southern Africa's.In 2002, South Africa's GDP accounted for 19% of the continent's gross domestic product (GDP), 33% of sub-Saharan Africa's, and 64% of Southern Africa's.

The African cell phone market has grown faster than the rest of the world in the last five years. By the end of 2004, Africa's cell phone subscribers reached 76.8 million, accounting for 8.8% of the total population, equivalent to nearly three times the number of fixed-line subscribers. South Africa's share of cell phone ownership on the continent was almost 100 percent in the early 1990s, but by the mid- to late 1990s, mobile communications in other African countries began to grow rapidly and gradually exceeded South Africa's ownership. Currently, South Africa has around 40% of all cell phone subscriptions in Africa and has leading development strength in this area.

In recent years, with the development and implementation of the New Partnership for Africa's Development (NEPAD), a number of large-scale cross-regional infrastructure projects are being built in Africa, including power networks in Southern, West and East Africa, and a four-country West African gas pipeline system. The most notable submarine fiber-optic communication cables around the African continent are already in place with the West Coast Submarine Cable, and the current submarine fiber-optic cable project from Durban, South Africa, to Djibouti, in the Horn of Africa, on the East Coast of Africa, which is also "nearing completion". This will greatly improve telecommunication links between African countries and beyond the continent, reducing the "digital gap" between Africa and the rest of the world.

South Africa's strengths in communications, power and information technology infrastructure and talent will enable it to play a role in African integration. South Africa is the chair of the African Ministerial Oversight Committee in the field of telecommunications (established in 1998), the use of its own industrial strengths, to promote the development of the continent's telecommunication industry, support for the Alliance for African Communications put forward a number of important development plans, including: e-medicine, e-health, e-education, e-agriculture and so on. South Africa's state-owned power company is the main driving force behind the power supply network in Southern Africa, and is focusing on power projects outside the region. South Africa's transport network company belongs to the railroad network company in more than a dozen African countries involved in the operation and management of rail transportation, its port authorities for the African countries to provide training and consulting port management

With the opening up of the African market to South Africa, South Africa's construction industry in other countries in Africa has also been a substantial expansion of the field, many of these projects to bring the South Africa and the relevant countries of the growth of trade and investment.

At the same time, South Africa's strengths in management and services have also been utilized. For example, construction, engineering, consulting firms and research institutions of professional and technical personnel into other African countries, South Africa's advantage in the service sector in the hotel, tourism, business has also been recognized by other countries in Africa.

South Africa's expansion in Africa also has the role of integrating regional markets. For example, South Africa's Western Cape provincial government plans to establish a "West Africa regional oil and gas service center", aimed at helping South African enterprises to develop the west coast of Africa (from Angola to Nigeria) attractive offshore oil and gas resources, so that the development of the Western Cape as a port of oil and gas supply in Africa. South Africa's strengths are its port facilities in Cape Town, as well as its civil engineering, maritime and mining capabilities. South African companies can provide services, refurbish oil field vessels, build oil recovery platforms, provide training and personnel services, and supply consumer goods. In addition, South Africa's well-established economic environment and facilities make it an ideal base for foreign oil and gas companies in Africa.

Third, South Africa's role in driving Africa's development

In the last decade, the economies of South Africa and the entire African continent have gained a certain amount of development in the context of interdependence. In the future, this interdependence and *** with the development of the relationship will continue to be the main feature of economic relations between the two. As the African economic development "locomotive", South Africa's economic development for the African continent's driving role is very obvious, mainly reflected in the following four aspects:

1. Favorable to change the deformed economic structure of the legacy of colonial rule.

African countries after independence inherited with the former colonial sovereign vertical economic dependence, and the lack of economic complementarity between countries, economic ties are few. South African trade and investment in African countries undoubtedly promotes horizontal intra-regional economic linkages and is a contributing factor to the continent's economic integration.

2. Can effectively promote the construction of infrastructure in the subregion and the entire African continent.

The construction of roads and railroads in Africa in the past was basically to meet the economic needs of the colonial powers, mainly from the raw material source to the port of the line, very few African countries to ask about economic ties and construction of transportation facilities, the only exception is the Tanzanian Railway built with China's assistance. In the past, air transportation in Africa was also mainly a link with Europe, and even communications between African countries had to be routed through Europe and back to Africa. South Africa is involved in a number of regional infrastructure projects that will have a long-term economic impact on African development.

3. Positive significance in integrating the regional market for financial services.

South Africa has a mature financial system and professionals. South Africa's large commercial banks are developing markets in other African countries, driving the development of the African capital market and related services, which is beneficial to Africa to meet the challenges of globalization.

4. The development of South African enterprises in the whole of Africa has an exemplary role.

South Africa's large enterprises operate in a standardized manner and have a good reputation, and are subject to the supervision of South African laws and domestic non-governmental organizations. Their participation in investment projects in Africa is conducive to attracting the attention of foreign capital and international financial institutions, but also help to enhance the international competitiveness of African enterprises.

Of course, South Africa to have a greater role in Africa, but also to enhance their own capacity building. International economic experts generally believe that the potential of South Africa should not be underestimated, South Africa's momentum to develop Africa has just begun, the climax has not yet arrived. The new president of the World Bank Wolfowitz called on South Africa to play a "leading role" in Africa, and expressed willingness to cooperate with South Africa in the African continent.

(The author is a researcher at the Institute of West Asian and African Studies of the Chinese Academy of Social Sciences and a doctoral supervisor)

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