Thursday, 26 July 2018

SA needs more than just China.

SA President Cyril Ramaphosa and China's President Xi
Jinping leave the stage at a business forum organised
during the 10th Brics Summit at the
Sandton Convention Centre in Johannesburg.
(Gulshan Khan, AFP)

Whatever the merits or demerits of the Brics grouping might be, South Africa can at least count on a friend in China – with deep pockets. The $14.7bn (R193bn) promised to President Cyril Ramaphosa by Chinese leader Xi Jinping is a substantial windfall for the beleaguered economy and as a result, the rand reacted with a degree of enthusiasm not seen for many months.

Given South Africa’s enthusiastic participation in Brics – an acronym for the grouping of the world's leading emerging economies, namely Brazil, Russia, India, China and South Africa – the country is certainly punching above its weight by playing in the same field at China and India. A closer relationship with China – both economically and potentially diplomatically – is likely to cement the broader Brics relationship too along with continued co-operation to a lesser extent with Russia and India.

For South Africa though, the promised package of funds looks more like a rescue package to offset the disastrous state of Eskom’s finances to the tune of almost R35bn. Given the ability of the Eskom meltdown to possibly create either a debt (or currency) crisis – or both – China has come to something akin to a rescue.

By Daniel Silke.
Full story at Fin24.

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