China’s growth and poverty reduction strategies – lessons for South Africa. By Thobile Jiwulane
Among the original five founding members of BRICS, South Africa has long been viewed by some as the weakest link in the chain binding developing countries’ block.
There’s a reason for this: despite being the largest economy in Africa, South Africa’s economic growth is not keeping pace with that of other BRICS member states that joined the multilateral economic forum prior to it.
Latest data quoted by Reuters indicates South Africa's economic growth in the last five years has ranged between 0.6% and 1.9%, with a growth rate of 0.6% in 2023 and 1.9% in 2022. The 2024 budget review by the South African National Treasury forecasts the country’s economy to grow at an average of 1.6%.
This compares adversely with 2024 figures for Brazil’s at 3%, Russia’s at 4% (expected to jump to 6% in 2025), India’s at 6.4% and 5% for China.
According to Statista data, China had the largest GDP of the BRICS countries, at 16.86 trillion U.S. dollars in 2021, while the others all fell below three trillion. Combined, the BRICS bloc had a GDP of over 25.85 trillion U.S. dollars in 2022, but it is now estimated at over 40%.
The proven perception that South Africa is lagging behind is reinforced by the reality that, unlike fellow BRICS partner Russia, South Africa is neither a strong military power in Africa, never mind within BRICS nor in the Global South. Rather, it strives to match the other four BRICS partners, a strong challenge for the country since it joined the body in December 2010 as the fifth member.
Yet the country is respected as one of the major global players and an agenda-setter in the international arena and at home in Africa on the political front. Undoubtedly, the stature and respect the international community granted South Africa’s renowned freedom fighter and statesman, the late Nelson Mandela, presented a significant challenge for the country.
Not only does it symbolise African resilience in the economic and political spheres, the two aspects that Mandela foregrounded in his struggle for the freedom of his people in particular and Africa’s emancipation in general, but it also represents hope and solidarity for the downtrodden worldwide, that he stood for. However, its poor growth undermines its leadership status and role as a model for democracy on the continent.
However, its membership in BRICS, now known as BRICS Plus since Egypt, Ethiopia, Iran, and the United Arab Emirates joined the bloc in January 2024, offers various opportunities for South Africa’s growth through trade, investment, and peer support among all the partners.
South Africa’s energies should be spent on achieving growth by leveraging the benefits of adopting the One-China Policy in its relationship with the People’s Republic of China, which invited South Africa into BRICS in 2009 prior to being admitted by the bloc in 2010.
South Africa has much to learn from China's journey to rapid growth. The most important lesson is how China transformed from a humble, underdeveloped, and often considered a Third World country into the second largest economy in the world. This transformation includes China's effective strategies to eradicate poverty among its population.
South Africa has yet to sufficiently exploit its relationship with China, taking advantage of China’s willingness to uplift its fellow BRICS members. With a wide range of infrastructural development initiatives accompanied by development funding, that China offers to Africa, any country seeking assistance is spoilt for choice. Without delving into details about other programmes, the Belt and Road Initiative stands out as a potential answer to South Africa’s massive infrastructure needs, particularly to address backlogs in rural provinces such as the Eastern Cape, Limpopo, North West and KwaZulu-Natal.
The Eastern Cape’s former Transkei and Ciskei regions have gained notoriety as parts of a province with no bridges to cross rivers and bad roads on rainy days. The same story is true for KwaZulu-Natal, where children can’t go to school and pensioners can’t collect their grants when rivers flood.
Besides regular community needs, proper infrastructure would also help generate essential revenue through unhindered tourism and transportation, which are guaranteed to boost the local economy and create jobs.
The lack of infrastructure is a significant factor underpinning South Africa’s underdevelopment and slow economic growth. The mixed economy policy introduced by the ANC party tends to favour the affluent in large cities, while the poor remain trapped in poverty in rural areas and black urban townships. This situation persists despite the model designed to address various class strata issues. By its nature, a mixed economy combines elements of capitalism, where the private sector plays a role, with socialism, which aims to address the needs of ordinary people.
China, although a strongly socialist country with central state control, employs a public-private partnership approach similar to that of South Africa to engage the private sector in development. However, unlike China, which introduced economic reforms in the 1970s and later incorporated specific characteristics unique to its context, South Africa has focused primarily on political transformation since gaining independence in 1994, while largely neglecting economic transformation. The transformation currently being pursued only focused on empowering a few black elites at the expense of the poor.
China achieved its rapid growth through a combination of reform, investment, and reliance on its large population. In contrast, South Africa focused on growing a few while leaving the rest of the population behind.
China has approached its economic development differently from other socialist countries by opening up its foreign trade and investment, encouraging private business participation, and promoting the growth of rural enterprises. The country implemented partial regional reforms that were expanded based on their success. More importantly, China invested in educating its workforce, recognising that a skilled labour force is essential for industrial production. This strategy created a pool of productive personnel who became vital to the country's industrialisation across manufacturing, services, and agriculture.
China’s growth took along the poor. It shifted its focus from general growth to alleviating poverty after realising there would be no growth while a large section of the population, particularly in rural areas, languished in abject poverty. South Africa's rural upliftment is weak as it is only part of a regular departmental rural agrarian task and not a focused rural revitalisation approach, as China does.
China’s story of striving to end poverty in the country is an enterprising one. Quoted in a World Bank Report, Minister Ma Jiantang, Secretary of the Party Leadership Group of the DRC said: “China’s battle against poverty has benefited the largest number of people in human history.”
To achieve poverty reduction, China focused more on achieving endogenous development in areas that had been lifted out of poverty, where it introduced vigorous measures to support rural revitalisation. The goal was to achieve common prosperity and high-quality development, including through the rural revitalisation strategy that focused on five key areas: industry development, human capital, culture, ecological environment and local governance
The mission was accomplished and this was confirmed by Yu Weiping, the then Vice Minister of Finance, who remarked: “China achieved its goal of poverty reduction in the new era as scheduled at the end of 2020. We have accomplished the arduous task of eliminating extreme poverty and made significant contributions to global poverty reduction.”
Going forward, China will continue to sustain and expand the gains in poverty alleviation and comprehensively realise rural revitalisation.
These are valuable lessons that South Africa can learn from China, which is both a major trading partner and a political ally. Fortunately, this country knows where its weaknesses are in both growth and poverty reduction strategies. Already practising a mixed economy, there is an opportunity to enhance its plan and pursue rapid economic growth in a manner similar to China's and to adopt its model of poverty reduction, in toto.
