Standard Bank Talks In-Market Insights

In-Market Insights - China 2025: Politics, policies and powerplays

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Jeremy Stevens and Simon Freemantle delve into China's geopolitics and the potential impact on Africa.
17 Jan English South Africa Business · Investing

Audio transcript

00:00 China, Africa's most important single investor since 2000, is undergoing deep structural change that has left it on the edge of deflation for the first time in almost a decade.
00:10 At the heart of the world's number two economy's troubles is weak domestic demand, now likely to be worsened by external factors, including the looming shadow of U.S.
00:19 President-elect Donald Trump.
00:22 You are listening to the fourth episode of the In-Market Insights podcast, brought to you by StandardBand CIB.
00:27 I'm Godfrey Mutsizwa.
00:29 My guests today, let me introduce them.
00:32 Jeremy Stevens, Asia Economist for the Standard Bank Group, who joins me from Beijing in China.
00:37 And Simon Fremantle, Senior Political Economist, who joins me from Cape Town.
00:42 Gentlemen, welcome.
00:44 I want to start with you, Jeremy, perhaps situate, if you can, where China is in terms of its economic development journey.
00:53 Well, hi, Godfrey.
00:53 Yes, and I'm really looking forward to this discussion with you and with Simon.
00:58 There's certainly a lot of misunderstandings around China and China's economic trajectory.
01:05 And these ideas seem to thrive and time and time again I see markets seem to misinterpret what Beijing is trying to do, making it increasingly difficult to make heads or tails from China's ongoing transformation.
01:18 The obvious starting point has to be that China is in the midst of an adjustment or a transition phase.
01:24 And this has really been underway for a number of years now.
01:27 and will continue for a number of years to come.
01:29 And this has changed in a profound way how China connects to the rest of the world, including Africa.
01:35 To be honest, this adjustment was pretty clearly signaled to us back in 2013.
01:40 President Xi Jinping at the time basically said that China's entering a stage where it's a new normal, which envisioned a Chinese economy that was going to grow much more slowly, that would be less credit intensive, that would be less investment driven.
01:54 and instead be buoyed by the growth in services and consumption and propelled by innovation.
02:00 Another key event that sort of anchors the outlook is that in 2015, we saw a sort of dramatic boom bust in the stock market.
02:09 We saw currency depreciation, we saw massive capital outflows, and I think China ended up burning about a trillion dollars of FX reserves at the time facing four years of deflation.
02:19 And that really led to China sort of pivoting towards de-risking the financial system and what they called clamping down on the disorderly expansion of capital.
02:29 Later then in 2017, the Chinese economy made it pretty clear that they'd entered a new era, writing into the constitution that the sort of central concern for domestic policy was unbalanced and inadequate development.
02:43 And they were going to shift from sort of focusing on the quantity of economic growth to the quality.
02:48 And that's really where we saw the first sort of mention of houses are for living and not for speculation.
02:54 And quite frankly, the issue is that most people don't seem to fully comprehend how much China has changed in the past decade.
03:01 And they certainly ignore how the goals of macroeconomic policy has changed.
03:05 And so what we've seen is we've seen massive amounts of uncertainty as it relates to China.
03:11 Many people sort of thought that maybe this was about an exodus of senior leadership.
03:16 Others worried that it was an emphasis over ideological purity over...
03:20 And pragmatism, others saw it as just the difficulty of trying to balance innovation with greater party control over the economy and society.
03:29 But at least to me, as it sits right now, it looks to me that over the past 18 months, the sort of all important mobilization goal that serves for a sort of anchor or the fulcrum for macroeconomic policy has come into sharper focus.
03:43 And what that is, is it's what they've called the new productive forces, which is basically them trying to push.
03:49 move up the value chain in terms of advanced and high-tech industries, pushing very forcefully in terms of clean energy.
03:56 And this is just an adjustment away from fast economic growth, which is, as I said, what they signaled many years ago to us.
04:04 Yeah.
04:04 And what's your general sense, Jeremy, when you look at the situation at the moment?
04:08 I mean, we have seen many policy responses from the authorities.
04:11 Do you still get the sense that they are in control or they are really just trying to find solutions and are not totally in charge?
04:18 offer, how they can turn this thing around.
04:21 You're totally right.
04:21 I mean, and I spend a lot of time talking to clients exactly about where they are in terms of the cycle and how that marries with the structural agenda that's upfront.
04:31 Obviously, a lot of the structural issues that they're trying to resolve don't necessarily resolve the cyclical matters.
04:37 So you mentioned in your introduction that, you know, they're struggling with domestic demand that's relatively soft.
04:43 They're also obviously as a result of...
04:45 de-emphasizing the role of the real estate sector that's such a profoundly important part of the economy and as that part of the economy suffers that drags the rest of the economy down now in september there was a lot of speculation around found more monetary and fiscal stimulus coming.
05:04 The PBOC, the central bank, and the financial regulator basically signaled that monetary policy was going to ease.
05:11 They cut the rates, they cut the triple R ratio, they introduced new lending facilities.
05:17 And when I was talking to clients at the time, sort of late September, early November, The message was to them that this is really a relief package rather than a stimulus, and it's really about preparing the financial sector to absorb what was going to be a sort of surge in local government bond issuance.
05:34 We saw two days after that PBOC meeting, the Politburo hosted their sort of typical monthly meeting where they focused on the economy, which they don't normally do in September.
05:46 And they announced basically that they're going to increase the intensity of monetary and fiscal policy.
05:51 And ever since then, there's been a sort of buildup of speculation that a big bazooka is coming.
05:56 Markets get excited.
05:59 A number of agencies met subsequently in the sort of lead up to the NPC meeting in November.
06:07 And there was a lot of speculation that they're going to stimulate, stimulate, stimulate.
06:10 Commodity prices rallied as a result.
06:13 And what we've seen consistently is that markets are disappointed by what actually comes out.
06:18 So there's a the ratio between talk, talk, the talk and walk, the walk doesn't seem to align.
06:25 The latest move to kind of absorb some of the local government financing vehicle debts.
06:30 I think it's about two trillion a year that they're now going to issue to convert onto local government balance sheets.
06:36 That's.
06:36 You know, it staves off defaults, but it will do nothing to alter the fact that local governments have seen revenues collapse as land sales have fallen.
06:45 And that's led to significant austerity measures by the local authorities who play a profoundly important role in the economics in their geographies.
06:54 Yeah, we'll come back and talk about some of the interventions.
06:57 Let's bring in Simon here.
06:58 Simon, Jeremy was talking in part to Marcus reacting to the policy measures that have been taken by the authorities, some of them underwhelming.
07:06 But let's perhaps look at China's place in the new geopolitical reality that we have at the moment.
07:12 Just take us through how China sees its role in the world at the moment, considering the economic reconfiguration that we've just spoken about with Jeremy.
07:19 Yeah, thanks, Godfrey.
07:20 There's a part of China's new era that is certainly a reconfiguration of China's global role.
07:28 You know, as we all know, as all the listeners on this podcast will know, China's economic influence has surged since the turn of the century.
07:35 And there is, together with that, in addition to various other countries demanding a louder voice in global multilateral fora, there is a clear need for the developing world generally to have a greater say in the reform of global financial architecture, global governance systems.
07:54 That's becoming particularly relevant when it comes to climate finance, in particular development finance more broadly.
08:01 And so China certainly sees itself as a key agent in driving that change.
08:07 I mean, China has typically played a dual role in a sense.
08:11 I mean, you know, on the one hand, representing and leading the global south and as an advocate for that kind of change and arguing on behalf of many developing economies.
08:22 But there is an open debate as to whether China can be classified as a developing economy.
08:26 Of course, it's far more advanced.
08:28 And then on the other side, there's this relatively new agreement in Beijing to emphasize big power diplomacy, but with its own Chinese characteristics and holding up the China model more assertively for others to emulate.
08:44 So there's an assertiveness on that side.
08:47 There's a desire to emphasize the need for governance reconfiguration, which should benefit the global south more broadly.
08:54 And the language of the government work report that they released in March, which is very deliberate, they inserted a specific sentence where they said they demand a multipolar world and that they're requesting a new type of international relations and oppose all bullying tactics.
09:11 And now China doesn't do anything by accident.
09:14 And the reality is that.
09:16 They are defending the sort of aspects of the liberal order that's benefited them most.
09:21 So, for example, trade, globalization, and that was something that President Xi started doing in sort of 2017 already.
09:28 But now they're also positioning themselves in the sort of driving sustainable developments in renewable energy and the energy transition because they want to juxtapose their role in global affairs to the U.S.'s more sort of inward looking stance.
09:44 So, yeah.
09:45 This is really quite a profoundly important topic that Simon's mentioned.
09:49 And I just wanted to sort of echo what he had to say.
09:52 Yeah.
09:52 So while we're still on geopolitics, we might as well bring in Donald Trump 2.0, right?
09:56 And how China sees itself playing Donald the second time around.
10:01 Let's begin with perhaps with you, Simon, and then we'll come to Jeremy.
10:03 Yeah, I think, you know, perhaps the central characteristic of Donald Trump is his unpredictability to a great extent.
10:12 And there is, in that sense...
10:15 Much less certainty around how his second term may play out.
10:19 We're having our own conversations in South Africa and every country in the world is now having to configure around the kind of risks that could emerge during Trump's second term.
10:32 There are some things that I think we can be fairly sure of.
10:36 We know that Donald Trump is quite averse to the U.S.
10:39 playing as leading a role in multilateral institutions as it.
10:43 it has typically played.
10:45 So there is likely to be a more assertive stance in terms of protecting American interests and withdrawing from certain multilateral frameworks.
10:56 It is widely expected, although perhaps not certain, that the US will again withdraw from the Paris Agreement on climate change, as Donald Trump withdrew from that agreement when he was first in power and Joe Biden then.
11:11 reinstated America's commitment to it.
11:14 So certainly there are some of those aspects.
11:17 We know that Donald Trump has already been saying many things about tariffs and imposing very stringent tariffs on China.
11:26 And Jeremy can talk about how that's perceived in China and whether that's plausible.
11:31 As well as Canada and Mexico, he's also spoken of the possibility of a BRICS currency.
11:39 and how he would perceive that as a direct threat to the dollar, and that the US government would then look to take action against countries that are participating in that.
11:48 So, you know, certain things we can be quite sure of is that the US will be looking to preserve and protect its own interests above all else, and that there will be a shift backwards again in the US commitment to multilateralism generally and various agreements that play a part within that.
12:06 Certainly, going back to what Jeremy said earlier, I mean, China has benefited enormously from certain aspects of, you know, free market or at least, you know, the expansion of global trade.
12:18 China doesn't have an interest in reducing the extent of globalization, whereas, you know, under Trump 1.0, there was certainly an implication that the U.S.
12:29 wants to be less involved in these global trade agreements and wants bilateral agreements that protect and preserve American interests.
12:36 So that'll be an interesting dynamic and to see how that plays out during the next four years or so.
12:44 But I would say just as a final point, when you go back to China's ambition to play a more assertive role globally, befitting of its economic status, the U.S.'s retreat under Donald Trump in his first administration, and if that continues in his second, retreat from these global commitments, it's increasing.
13:05 Narrow nationalism that epitomizes much of what Donald Trump has spoken of in terms of his policy approach would quite likely accelerate China's influence relative to the U.S.'s influence in places like Africa and elsewhere.
13:20 So the rebalancing one could expect in the next four years could favor China if the U.S.
13:25 in that period of time is looking to withdraw and China is looking to become more assertive.
13:29 And we're certainly going to talk about the Africa impact in terms of China's position in the world, as well as, of course, the coming of Donald Trump.
13:36 But Jeremy, I wanted you to come in and perhaps talk a little bit about how you see China playing Donald in his second term and also whether you see the assertiveness that we were talking about continuing, particularly given the way we know Donald Trump conducts his foreign affairs, his domestic affairs.
13:53 Yeah, I think I think I fully.
13:57 wholeheartedly agree with Simon's opinion.
14:00 I think that China knows that Trump's presidency does add a great deal of uncertainty, certainly on trade, potentially on investment.
14:12 The big potential tripwire is obviously Taiwan and a number of other areas where sort of the volatility around Donald Trump is potentially problematic in the short term, medium term.
14:27 And they're sort of enabling a policy framework in play or positioning a policy framework so that they can respond in kind to some of the decisions that might cascade from the White House and that they've built up over the past five, six years in preparation for this.
14:50 And the reality is, I mean, Trump even mentioned that he might go cold turkey as it relates to trade between China and the United States.
14:58 But it's also worth remembering that from an export point of view, I think China's exports to the United States are basically where they were in 2014.
15:07 And like I've mentioned, China's worked quite hard to diversify its relationships and try and pivot away from a dependence on the United States.
15:17 That said.
15:18 you know, the truth is that China has doubled down on its economic and political model, and it's done so unapologetically.
15:26 And so the consequence of that is that irrespective of whether it's Harris or Biden or Trump, it knows that ideologically China and the United States are in a contest and they aren't likely to be friends.
15:41 I think that deep down...
15:43 There's still a part of the Chinese bureaucracy that thinks that Trump's the kind of person that they can make deals with.
15:50 They did make a deal around Huawei.
15:53 during Trump's first presidency.
15:56 And like Simon has very clearly articulated, Trump leaves the U.S.
16:01 more divided, probably.
16:02 He certainly undermines potentially U.S.-EU relations.
16:07 He makes it less likely that China will be encircled by U.S.
16:10 allies.
16:12 And it will make it easier for China to position itself as a partner favoring openness and trade and multilateralism and green energy transition.
16:23 And it's certainly easier for China to foster a sort of Beijing-centric world order with the global south.
16:30 I would argue that it's much easier for them to develop closer ties with President Ramaphosa under a Trump presidency than under a different U.S.
16:40 president.
16:40 So I think long term, China will be able to make the best out of this.
16:47 And the truth is that that's probably...
16:50 aligned with what Simon has outlined previously.
16:53 Yeah, so we bring in then the Africa question, right?
16:57 Now, of course, there's a risk here that Africa could well end up being a battleground for this US-China rivalry that we are talking about.
17:05 So I wanted to ask Simon, what can and perhaps what should African countries do to try to shield themselves from this risk?
17:12 How do they play this game?
17:13 Yeah, so we've mentioned in various reports over the years that in the context of great power rivalry for smaller economies, there is enormous amounts of risk in picking a side.
17:25 Look, there's risk generally.
17:27 I mean, the IMF has spoken about the risks of geoeconomic fragmentation.
17:31 Arguably, those become more pronounced with Donald Trump coming back into the office in the US.
17:37 And those could lead to up to 2% loss of global GDP.
17:41 There's another report suggesting that geoeconomic fragmentation could lead to permanent economic loss in sub-Saharan Africa.
17:48 So the risks are real.
17:49 I mean, these are related to things like French shoring and investment deals being struck along geopolitical lines.
17:56 So if you're seen as an ally, then you'll secure beneficial access to large economies.
18:02 If you're not, then you get excluded.
18:03 So the risks are there.
18:05 And in- In light of those risks and also pragmatically understanding that we're in an enormously fluid time, we don't know how this new era is going to unfold, what the new rules of the game will be once they're scripted.
18:19 And so it is sensible and pragmatic for countries across Africa to adopt a position of non-alignment.
18:26 Now, South Africa has been very assertive in its non-alignment, arguably has not communicated that non-alignment.
18:33 coherently enough in the past.
18:35 I think government has done a lot better job over the last 12 to 18 months in communicating non-alignment sensibly and coherently and consistently, but not just non-alignment because non-alignment could project some degree of non-interest.
18:51 You know, we're out of this fight.
18:54 But what has been conceptualized as active non-alignment, so some Latin American scholars came up with this concept some time back.
19:01 And what it implies is that you're not picking a side in a geopolitical rivalry, say, between the U.S.
19:06 and China or between Russia and the U.S.
19:09 But so you're non-aligned, you're seeking an outcome that is beneficial for the global economy and the like, but you are actively pursuing your own strategic interests within that geopolitical framework.
19:22 So if you look at it in the African context, if the U.S.
19:25 and China are in contestation, Africa is there's a threat, as you say, Godfrey, that it could be a battleground as it was during the Cold War.
19:35 But there's an opportunity implicit in that.
19:37 If you take something like critical minerals, that China has an enormous dominance over critical mineral supply chains.
19:44 The U.S.
19:44 is clearly concerned about that dominance and is looking to diversify, as is Europe.
19:49 And there's pieces of legislation that have come through from both countries designed to reduce their reliance on China in that field.
19:57 Africa has an abundance of critical minerals.
20:00 So instead of porous and perhaps institutionally fragile African economies being used as footballs in this geopolitical rivalry, they need to assert the value that they have and take advantage of this rivalry to get the best possible price for what they're able to provide.
20:17 And I think it's in that realm that we would suggest African countries should position.
20:21 And some have done, I would argue, or we would argue, a very good job thus far.
20:25 Kenya.
20:26 has perhaps been a standout in being able to balance these various international geopolitical pressures and position itself very well as a partner to China, as a valued partner to the United States in East Africa, strong relations with Europe as well as with other countries in the Gulf states and so on.
20:45 South Africa, I would say, after some teething issues, after Russia invaded Ukraine, has started to do a far better job in that space.
20:51 The central tenet of it is...
20:53 that you have to be clear-eyed around your strategic interests, your economic interests, and emphasize those in order to extract as much as possible in this fluid geopolitical rivalry that we're seeing unfold.
21:05 Absolutely.
21:06 And Jeremy, I want you to come in and perhaps you can add what you might have in terms of how Africa can play this one.
21:12 But I also wanted to talk to a little bit about the potential areas of interest for Africa in terms of exploiting the relationship with China, where perhaps we could tap in.
21:23 into China's expertise.
21:24 We know, of course, their expertise in manufacturing, agriculture, in services, etc.
21:29 Beijing's made it quite clear that as far as they're concerned, Africa is a strategic exterior line for China to geopolitically contain the US, whilst providing a backbone of support for China on its issues that are considered core.
21:44 You know, when you look at a map of where a sitting U.S.
21:47 president has visited at any point during their leadership era, the countries where no U.S.
21:55 president has visited are almost all in Africa, whereas obviously from a geopolitical point of view, Africa plays a rather important role from a foreign policy point of view for the Chinese.
22:09 Africa is also an ally in many respects for China to play a...
22:13 greater role in global governance.
22:15 I think, you know, one of the things on the renewable energy transition is, you know, they want to be the standard setters.
22:21 They're picking nascent global technologies that there hasn't been a leader that's been established.
22:26 And they're trying to then dominate that and set standards and then make countries that trade with the Chinese reliance on Chinese standards and Chinese systems.
22:36 And so Africa is obviously an important player in that.
22:39 So let's come now to it.
22:40 the G20.
22:41 So South Africa has got this big opportunity in 2025.
22:44 It's assuming the chairmanship of the G20.
22:47 Now, what opportunities potentially are we talking about here?
22:50 And what's also what are the risks from this in terms of South Africa and Africa?
22:56 I just wanted to mention, you know, South Africa, we all know in the past has tended to have a disconnect between foreign policy and its trade policies.
23:04 Simon?
23:05 Yeah, thanks.
23:06 So there's a number of points within that.
23:09 Let me start with your final line on South Africa's misalignment.
23:15 I totally agree that has been a central concern or misalignment in that we have never really emphasized economic diplomacy as a central tenet to our foreign policy.
23:25 But that's changing.
23:26 In the last six or seven months, we've seen a very clear shift from DERCO, the Department of International Relations and Corporation, amongst...
23:36 and by the President in emphasizing the centrality of economic diplomacy.
23:40 We're now seeing greater conversations taking place between DERCO and DTIC, Department of Trade, Industry and Competition, around how our foreign positioning integrates with our domestic economic imperatives.
23:55 So the timing is good in the sense that this economic diplomacy angle is now very central to our foreign policy positioning, which we've been arguing.
24:04 is necessary for a very long time at the moment in which we assume the G20 presidency.
24:09 I think that that approach also will resonate with the U.S.
24:14 government under Donald Trump, a more transactional commercial relationship rather than one based on ideology, where we are very misaligned with the U.S.
24:22 in certain key areas.
24:24 So I think that puts us in a better position to extract more from the G20.
24:31 It is a historic opportunity, I would say.
24:34 Because it not only comes at a time, as I said, when South Africa has asserted economic diplomacy as a central tenet, but also when there is an increasing call and a more generally supported call for reform of global governance and financial institutions to better protect and shield developing economies, and particularly those in Africa, from the adverse effects of climate change.
24:57 And also to resolve growing debt inequality that was compounded.
25:03 by the COVID-19 crisis, where the global response to the crisis emphasized the extent of these global inequities, particularly in vaccine distribution and supply.
25:13 And South African government, and particularly President Ramaphosa, have been very assertive on those matters.
25:18 During COVID, he was one of the most outspoken statesmen in the global south against vaccine inequity.
25:26 The president has also spoken very assertively on the need for a different approach to climate finance.
25:32 At the UN Summit of the Future recently, there was at least a global commitment to address some of these concerns.
25:38 And related to them all is the fact that many of our global multilateral systems are still designed to reflect a balance of power that prevailed at the end of World War II.
25:50 The UN Security Council has been unreformed since then.
25:53 You still have the same five permanent members.
25:55 So there's a very loud call for change to the UN Security Council.
26:00 And Africa has demanded two permanent seats.
26:03 Now, how you decide who gets those seats is, of course, going to be a challenge.
26:08 But I think South Africa takes the G20 presidency at an important time in advocating for these changes and trying to capitalize on the momentum that seemed to be achieved at the UN Summit of the Future a couple of months ago.
26:21 South Africa's priorities, I think, are very well articulated to place Africa at the center of its G20 presidency.
26:28 First of all, reforms to global financing, as I've spoken about, to better support climate change adaptation and mitigation, as well as general development across Africa.
26:39 The just transition, which we know is essential, in which Jeremy has spoken about how clear an area of synergy exists between China and Africa in stimulating and supporting the just transition across the continent.
26:52 Beneficiation of natural resources, that's been a consistent theme across African economies for a long time.
26:58 Most have not achieved that, but it is a central ambition of South Africa during the G20 to at least make some progress in that area.
27:06 And then...
27:07 The final two, I mean, there are others, but that I extracted from the statement recently released was using critical minerals as an engine for growth across Africa.
27:17 We know that Africa has an abundant supply of critical minerals.
27:20 These are essential for the energy transition that is underway.
27:24 China has a vast dominance, even a monopoly, one where some could argue on global supply chains of critical minerals.
27:32 The US and Europe are seeking to diversify.
27:34 They've implemented legislation to try and help with that.
27:37 So Africa can really use this geopolitical environment now around critical minerals to gain additional value.
27:45 And South Africa is placing critical minerals in its G20 priority set, I would argue, does present opportunities in that area.
27:53 And then there's lastly, there is a focus on speaking about AI, the risks that emerge from it from a security and governance perspective.
28:01 And I'm pleased to see South Africa seeking to play a leading role in that very important conversation as well.
28:07 So it'll be an intense year.
28:09 I can tell you, Simon, that there will certainly be loads of stories for people like me.
28:13 There's no question about that.
28:14 Absolutely.
28:14 And we're looking forward to it.
28:16 As we wrap, Jeremy, I wanted you to come in and perhaps a little bit reflect on how China perceives Africa as it, number one, comes to terms with Donald Trump's second presidency and also it seeks to solve its own problems at home.
28:31 Yeah, I think that the crux of it is that there's sort of.
28:35 decision makers in China are going to use Africa potentially as a partner in trying to further its foreign policy objectives.
28:47 You know, I think from a geopolitical point of view, like I've mentioned, Africa really matters a great deal now.
28:54 I just did a presentation a week ago, and the sort of professor at the developments, the Global South Development at Peking University was saying, you know, part of the reason why we sort of have a partnership and a brotherhood with Africa and that we're going to always be a developing country because we're sort of partners of the global south and a voice for the global south is, you know, one of the things that they'll say is they'll say, well, it's because we don't sort of have political strings attached.
29:23 But in the same slide, she did go on to say, you know, what they want is voting solidarity in the United Nations.
29:31 really, when it comes to sort of China's core interests, whether that's Taiwan, whether that's Hong Kong, whether that's Xinjiang, whatever it may be, they expect Africa's support for those core interests.
29:45 At the same time, they understand that they need to sort of give a little bit to earn that support from the African side.
29:55 And so there's a lot of space for negotiation when it comes to the Chinese.
30:00 geopolitical point of view.
30:01 And so I think what they've done is they've said, look, Africa doesn't want to be patronized.
30:06 We're going to negotiate with you as equals, and we're going to try to get the best we can for ourselves.
30:12 And we expect you to do the same.
30:14 And I would argue that often when it comes to our preparedness for that engagement, we're sometimes underprepared and they're very much overprepared.
30:24 And so they've tended to make sure that they're getting at least what they want from that relationship.
30:30 And we just need to make sure that we're being as clear and consistent in expressing what our objectives are from that partnership.
30:39 Because I do think that China recognizes that as a brand, they need to deliver.
30:44 They've made it pretty clear that, you know, from their point of view, they deliver growth, they deliver development, they deliver infrastructure.
30:53 That's what you get from partnering with China.
30:56 And so we need to make sure that we're getting the most out of that relationship.
31:01 Where I worry, to be quite honest, is because of the sort of, you know, we're 54 individual African countries, and I do worry that China's able to leverage that to its advantage and make sure that it's getting the best it can from a partner.
31:16 And if, you know, if one of the partners is too difficult, then they'll just pivot to another partner.
31:22 And there's a risk, you know, as it relates to, say, intra-Africa trade, for example.
31:26 You know, China's selling a significant amount of stuff to Africa.
31:30 I mean, make no mistake, I think 50% of Ghana's imports are coming from China.
31:35 It's about 45% of Tanzania's, up about 40% of Kenya's.
31:40 So, you know, China's doing pretty well selling into Africa and basically meeting any of our income gains with rising demand for their products.
31:49 We need to find ways to get some of that production into Africa so that we can produce for Africa, for intra-Africa trade.
31:56 The risk for South Africa, for example, is that if China sets up, you know, at scale in Nigeria, then Nigeria and its partnerships with China are going to be the ones that are selling into the continent rather than South African companies.
32:10 So there's a pressure on us to make sure that we're being quite strategic and smart around our engagements with Africa, because in the end, you know.
32:18 in 20 years time, the landscape of the continent could look very different.
32:22 And I wouldn't like to be in a situation where South Africa is not participating in that upward trajectory for the continent.
32:31 Absolutely.
32:31 A lot of challenges, a lot of opportunities, and I dare say a lot of stories for us all as well.
32:37 Gentlemen, thank you very much indeed for your insights today.
32:41 You've been listening there to Jeremy Stevens.
32:44 He is an Asia economist for the Standard Bank Group, chatting to us from Beijing, and Simon Fremantle, a senior political economist at the Standard Bank Group from Cape Town.
32:53 From me, Godfrey Mutizwa, until next time, thank you for listening and goodbye.

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