Despite uncertainties, the solid foundation and steady growth of China's economy continue to attract global investors. In an exclusive interview at the Annual Meeting of the New Champions 2024, Busi Mabuza, Co-Chair of the event and Chairperson of the Industrial Development Corporation of South Africa, told an SFC reporter that the structural soundness and well-planned policy environment of the Chinese economy instill confidence in investors and businesspeople globally. "Uncertainties seem cyclical, not structural. I have no doubt about the structural soundness and well-planned policy environment of the Chinese economy," she remarked.
Mabuza also emphasized the significant role China plays in renewable energy, noting that "50% of China's energy sources now come from renewable energy. While everyone has been talking about moving to renewable cleaner energy, China has been implementing it."
In addition, she highlighted the strong historical and economic ties between South Africa and China, showcasing various collaborative efforts in industries such as automotive manufacturing, technology exchanges, and so on. Mabuza concluded that as far as she knows, there are sixteen large South African companies already operating in the Chinese market, and more will come due to the economy's size. "Success in the Chinese market sets businesses up for life," she said.
SFC: What aspects of China's development have impressed you the most?
Busi Mabuza: 50% of China's energy sources now come from renewable energy. While everyone has been talking about moving to renewable, cleaner energy, China has been implementing it. Consequently, half of its energy sources now come from clean energy. China started growing its renewable energy equipment businesses and technology, which is now very visible on the road with electric vehicles and widespread charging stations. This is very pleasing.
SFC: How does the strong cooperation between South Africa and China serve as an example for future global cooperation?
Busi Mabuza:I am very excited about the relationship that South Africa has built with China. Of course, it's a historical relationship with the African National Congress having received very strong, very meaningful, and very tangible support from the People's Republic of China, even before we got our freedom in 1994. Since 1994, we've seen the relationship move beyond the political relationship into an economic relationship. This happened at a time when the Chinese economy was experiencing phenomenal growth, which then provided tailwinds to South Africa's economy.
We have a number of companies that are invested in the South African economy. The Industrial Development Corporation, which is the business that I am Chairman of, has a number of partners that have invested in mining, be it copper, manganese, and other mining businesses. We continue to investigate other opportunities with Chinese partners. We partnered with Beijing Automotive Industries Corporation to set up an automobile manufacturing plant in one of our coastal cities. This was the first new automotive manufacturing plant that the country saw in almost 50 years. So this is the strength of the relationship that we have with China.
More exciting for me for the future is that we have skills exchanges with people-to-people interactions. The reason I'm excited about the skills exchanges is that we've seen China move up the curve very quickly along the technology platforms. In some segments, China already leads the world whether we accept it or not. The fact that South Africa has firsthand access, especially for young people, to exchanges where they are able to come and be based in plants in China and learn these technologies.
I have a friend at the moment who is busy setting up an incubation business in South Africa, where he has Chinese companies donating automation equipment and industrial technology to his incubation. He then brings in young people to train them on that equipment. This is very important because South Africa at the moment has an over 30% unemployment rate, with youth unemployment being estimated at over 50%. The exchange of skills, I believe, is going to spur our young people to even venture into starting their own businesses.
Technology is so powerful because it enables people to work differently. They may no longer have to go to the factory floor; they may be able to do their own products and services using that technology from wherever they are based.
SFC: What are your prospects for the future of clean energy, and what roles should China and other countries play?
Busi Mabuza:The energy opportunity is actually across the African continent. It's not just a South Africa opportunity. The South Africa opportunity is more in our face because South Africa used to have sufficient supply for its demand; now we have less supply than the demand in the country. In 2013, South Africa launched a Renewable Energy Independent Power Producer Procurement Program, which attracted quite a number of players. The intention was that these renewable energy companies would bring in their technology, expertise, and investment into the country. Many of those plants are now up and running and helping relieve the supply deficiencies in the country.
Since 2015, China has developed so fast in that space and we continue to have shortages in the country. I know that there was a roadshow by our Minister of Electricity last year in China to come and discuss and offer opportunities for Chinese companies to come and implement solutions that will address our energy shortage in South Africa. I expect that to be happening. The more exciting opportunity is also in the grid because our electricity grid is constrained at the moment and we need to move up the curve and get a smart grid.China is known for its robust long-distance transmission lines. I expect that we will see Chinese companies and Chinese players coming to help us implement solutions.
I've just talked about South Africa; the rest of the African continent is where the bigger opportunity lies. There's a hydro opportunity. China has solutions in that space, I believe, and other countries, of course. But I believe that we are all ready to start seeing the implementation of energy solutions, especially on the renewable side. I think all the energy sources will be on the table, and we will have the opportunity to chart a path that is best suited for South Africa or for the other African countries. China takes a multilateral approach and won't impose its solutions, saying this is how we did it, so you should do it the same way. I expect we’ll see a lot of collaboration in addressing our energy shortages as well.
SFC: What is the significance of world leaders from academia and business gathering to solve problems together?
Busi Mabuza:The significance for me has been, first of all, meeting each other face to face. Conversations that are face to face are completely different from those we have online. All of a sudden, we're able to read each other's body language and recognize each other's humanity, so I really have appreciated that opportunity.
Secondly, I found that most of the people who have presented have been so optimistic about the prospects for the future of the world. The theme for this Davos meeting makes sense because our economies were hit by the COVID pandemic and we are now in recovery mode. I'm excited that the World Economic Forum is not just talking about global recovery, but also about new frontiers. Where are the new opportunities? Technology is an important frontier. Clean energy and addressing climate impact is a new frontier that everybody is talking about.
Lastly, the future is in the hands of young people. Many advanced economies have aging populations, but people are aging better than in the past, so they have longer lifespans. This opens up an opportunity for the youth. Large economies such as China and the African continent have relatively young populations, and the leaders are saying young people need to be reminded that the opportunity is more exciting ahead than it has ever been. I think that's a very positive note for us to be meeting on.
SFC: Despite current global uncertainties and challenges, are you optimistic about the outlook of China's and the global economy?
Busi Mabuza: Uncertainties seem cyclical, not structural. I have no doubt about the structural soundness and well-planned policy environment of the Chinese economy. Investors and business people are eager to enter the Chinese market, and Chinese business people are diversifying globally. The current uncertainty is a temporary blip.
The Chinese economy's size, at 126 trillion RMB, is immense. If an economy of that size can grow at 4% or 5%, a lot of value is added to the global economy in one year. We look and say it's no longer 6% or 7%, and we therefore think that is uncertainty. From my perspective, coming from an economy that would do anything to get 4% growth, I think this economy is poised for greatness.
I hope and pray that the African economies, where we now have a large percentage of young people, will start catching up with these growth rates. I am looking forward to us integrating the continent through the African Continental Free Trade Area, so we can start catalyzing the kind of growth rates we've seen in China.
SFC: What is the importance of a more open China to the world, especially for global business?
Busi Mabuza: It's exciting on a number of fronts. First, this is a beautiful and very diverse country. Each time I visit a different city, there are different flavors and things to see. The world will be enriched by exposure to the culture of China. Opening up the economy gives an opportunity for young people.We have sixteen large South African companies, as I'm aware of, already operate in the Chinese market, and more will come due to the economy's size. Success in the Chinese market sets businesses up for life.
策划:于晓娜
监制:施诗
制作:蔡于恬
新媒体统筹:丁青云 曾婷芳 赖禧 黄达迅
海外运营监制: 黄燕淑
海外运营内容统筹: 黄子豪
海外运营编辑:庄欢 吴婉婕 龙李华 张伟韬
出品:南方财经全媒体集团
