By Chimwemwe Mwanza
Smell the coffee – it’s long been coming but the simmering geopolitics in play seem to have clouded our reality in the process giving naysayers some cold comfort. Try as we might to discount China’s growing global influence, fact is that there is a paradigm shift in the world economic order led by the Chinese dragon. Hence this aphorism coined by market commentators – when China sneezes, the global economy catches a cold – aptly acknowledges China’s rising dominance.
In essence, there is no need for markets to fixate their gazes on the perfomamnce of the Greenback, Euro or the Pound Sterling, the Chinese Yuan is the one to watch. The strength and significance of the Yuan, now makes it a perfect instrument for measuring the globe’s economic temperature. For sure, you can tell from China’s delegation to the summit including the presence of swashbuckling CEOs of some of Asia’s reputable conglomerates that the Xi Jinping show is in Johannesburg.
As the summit has progressed, it’s been deals and investment pledges galore. Yet amidst all this, it’s hard to ignore mutterings of the rivalry between the East and West. Pick your side, the argument holds that the West edges BRICS member states in the democracy congeniality contest. It’s on record, the West strongly pontificates sound governance principles and ethical leadership. So goes a maxim, if you want your image artificially propped up and your stature inflated in glowing terms, then the West is your best bet. But which empty stomach cares for the rule of law? The hungry and unemployed won’t eat democracy is a popular refrain by pariahs of Western hegemony.
Rise of the Chinese dragon
For the record, this fixation on ideologies is becoming all too ludicrous and China – a leading member of the BRICS formation explains why. “The world does not want another cold war. It wants a clean and peaceful world. Many emerging markets have become stronger after shaking off the yoke of colonialism,” remarked Chinese Minister of Commerce Wang Wentao to a thunderous applause from delegates at the summit. As the globe’s most populous nation boasting an estimated 1.4 billion people, China has indeed become the envy of its peers – deservingly so.
And quiet how it has grown its economy over the past decade is baffling. How did this happen? In fairness, the success that Jinping and co are reaping are fruits of a governance doctrine – planted by Chairman Mao Zedong. After Mao, his successor Deng Xioping focussed on perfecting the implementation of a market order of fair competition. And while everyone else on planet earth was sleeping, Xioping quietly began to raise his country’s Gross Domestic Product (GDP). His reign saw the country increase its GDP by a staggering tenfold earning him the moniker, ‘The Architect of Modern China’.
This focus and doctrine has characterised Jinping’s reign. For example, China raised its GDP from US$11 trillion (K215 trillion) to US$15.6 trillion between 2016 and 2020. This is stuff of legends – a perfect template for economic growth right there for BRICS member states and other emerging countries looking to adopt a sustainable growth formula. What is remarkable though about China is its ability to deliver on its promises – sometimes providing economic aid to developing nations with little in return for its benevolence.
Weighing Brazilian, Indian, Russian and SA’s value
The BRICS grouping consists of like-minded economic powerhouses whose objective is to strengthen investment and trade. This trade bloc represents an estimated market of close to 3.2 billion people. Simply put, this figure accounts for roughly 41% of the global population. Take Brazil, it boasts the biggest economy in South America. According to the IMF, it is the 10th largest GDP in the world and also boasts the globe’s 8th largest purchasing power parity. It has advanced industries in Petroleum processing, automotive, cement, Iron, and steel production among others. Brazil represents a great marketplace for resources rich African economies.
Both India and Russia are actively engaged in various joint projects in the BRICS trading block. India has the world’s fifth-largest economy by nominal GDP and the third largest by purchasing power parity. Its economy is equally gluttonous to commodities – some of which are commonly referred to as minerals of the future. While the Russia-Ukraine conflict has impacted the
former’s economic lustre, Russia’s contribution to global food security is significant.
By far Africa’s most developed and industrialised economy, South Africa (SA) is one of the world’s largest exporters of gold, platinum including other natural resources. Its role in this trading block, strategically positions it as the gateway for BRICS member states looking to invest in the rest of the continent. Besides SA, the rest of Africa offers investors access to an integrated single trade and investment market of more than 1.3 billion people. Besides, the continent’s GDP is projected to exceed US$3.5 trillion by 2025. In all this, SA has a big role to play in helping boost faltering trade between African countries. Currently, African intra-trade is estimated at around 15%, compared to 67% in the European Union, 61% in Asia and 47% in North America.
Lessons for Zambia – be careful who you go to bed with
The BRICS train is unstoppable. The flurry of investment and trade deals that member states-notably China is dolling at the summit best signify a strong unity of purpose. This is the reason why Egypt and Nigeria – among a horde of other African powerhouses are clamouring for permanent seats on this trade block. Elsewhere, Argentina, Chile and Peru among others are also banging on the door hoping to hitch a ride on this fast-moving train.
Closer to home – in both the Zambian and African context, China has been an all-weather friend. its relations with Zambia dates back to six decades – a factor that should easily inform Zambia’s interest in this trade block. In fact, you can’t talk of Zambia’s industrial and economic trajectory without mentioning China in the same breath. For context, it is Zambia’s single biggest creditor accounting for US$6 billion of Zambia’s foreign debt estimated at US$16.3 billion. In 2021, China accounted for nearly US$3 billion of Zambia’s total exports of goods and services valued at US$11 billion.
Against the backdrop of a vibrating chorus of gloom we can’t afford to auction Zambia’s economic policies and industrial trajectory to the highest bidder. A genuine non-aligned position that’s able to censor wrongdoing without use of inflammatory megaphones is what should inform our investment and policy decisions. There is sufficient room in our economy to accommodate interests of both the East and West. After all a patriot can only do one of two things. Excite and not incite potential investors. We should opt for the former.
About the Author: Mwanza enjoys reading Political History and Philosophy. He is neither a capitalist, socialist nor a communist. He is just a realist. For feedback, email [email protected]