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04 November 2011 07:40

Emerging power-players compete for Africa

Part 2.

This article follows on from the previous instalment .

The Brics of India, Brazil, Russia and South Africa – and China in particular – are at the forefront of a new scramble for projects and deals in Africa. What followed on from the imperial age of colonialism and domestic interference, and then the Cold War politicking division of Africa, ended up in today’s renewed scramble for Africa, one which is clad under an emerging-economy-cape of resource security and commercial favour. Each foreign power brings to the continent its own distinct business nous, yet collectively the Brics are instrumental in transforming Africa’s business fortunes.

Leaving aside China’s dominant position in Africa, this article untangles a few of the other Brics’ African activities.

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02 November 2011 16:02

Third scramble for Africa

Emerging power-players compete.

The Brics of China, India, Brazil, Russia and South Africa – and China in particular – are at the forefront of a new scramble for projects and deals in Africa. What followed on from the imperial age of colonialism and domestic interference, and then the Cold War politicking division of Africa, ended up in today’s renewed scramble for Africa, one which is clad under an emerging-economy-cape of resource security and commercial favour. Each foreign power brings to the continent its own distinct business nous, yet collectively the Brics are instrumental in transforming Africa’s business fortunes.

Leaving aside China’s dominant position in Africa, this article untangles a few of the other Brics’ African activities. Refer to The China Analyst online to see the article in full, as well as many other gems relating to China’s global engagement.

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21 October 2011 16:28

The truth about the Chinese in Africa

Untangling the blatantly false and baseless arguments against the Chinese in Africa.

In recent weeks I did the usual media engagement on the China Africa “love affair”. I was invited on to SAfm Forum@8 together with Minister of Trade and Industry Rob Davies, a respected African professor, and CNBC Africa for a chat with Jeremy Mansfield. I’m inclined to mention this, as a few oft forgotten basic realisations again woke me to the fact that the layman, the non-economist, from the “average” citizen working in the informal sector, just getting by, to the seemingly high-end middle class workers taking the time to text and/or call in their opinions, are too a large degree venomously anti-China. Of course there is no new revelation about this fact.

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15 September 2011 13:02

A gradually balanced way forward for China

Charlie Pistorius considers the four challenges China faces in internationalising the Renminbi.

JOHANNESBURG - China’s new 12^th Five-Year Plan (2011-2015) explicitly calls for structural change, the kind that compensates for the loss of external demand from the US and Europe by gradually aligning its domestic economy towards consumer demand growth, and stepping down its heavy reliance on exports. This will be quite possible if they manage to up domestic private consumption (to say 50% of GDP), and reduce household savings (to below current 20% of annual disposable income).

However, given the projected outlook of weaker export growth, the said reforms will need to expand productive investments into the domestic services sector, and hence spur employment and income growth that affords households the ability to consume more. Necessarily wages will have to be “allowed” to rise in line with productivity, and somehow local governments must be incentivised to curb their misguided over-investments.

But now to grit of the currency argument, let’s unpack a few key challenges China faces in internationalising the Renminbi, which when looked at carefully shows why it is going to be a gradual and radical process.

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12 September 2011 08:36

China’s currency is wooing the world: Is it finding favour?

Will the Renminbi be the next standard, asks Charlie Pistorius.

Increasingly the world’s media is delving into the subject of how the Chinese currency – the Renminbi or yuan in reference to physical notes and coinage – is adapting to win reserve status. Curiously though, this debate is centred less on the integration of the Renminbi into the global monetary system, but rather, on how fast China can manage the necessary changes as it seeks to introduce a more “user-friendly” yuan outside of China’s borders.

Nearly a century ago the dollar toppled the pound as the world’s reserve currency, how? Mainly due to the increased use of the dollar in trade settlements, which as the US upped its trade footprint, eased the cost of trade financing for them. This dynamic should sound rather familiar today if one reads China into the place of the US or Japan. Affirming the Dollar’s position as the international reserve currency was in short, as a result of the world’s major central banks accepting the Dollar as the “safest store of value”.

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