South Africa must navigate its economic relationships cautiously amid rising tensions between China and the US, particularly during the 2023 Agoa Summit, to protect its interests and strengthen diplomacy.

South Africa must tread carefully in its economic relationships to avoid being caught in the escalating tension between east and west, and more specifically China and the US. The country’s hosting, and the outcome, of the 2023 Agoa Summit should strengthen its role in diplomatic relations and contribute towards safeguarding the country’s economic interests.

From 2-4 November 2023, the US and 35 sub-Saharan African countries will meet in Johannesburg for the 20th Africa Trade and Economic Cooperation Forum (Agoa Forum). It entails strengthening trade and investment ties between the US and sub-Saharan Africa through the Africa Growth and Opportunity Act (Agoa), US legislation which provides various trade preferences to eligible countries in the region.

Given Russia’s continuing war in Ukraine and its rising tension with Nato, plus the China-US trade war, tensions between east and west are high. South Africa has come under attack for its non-alignment role in the Ukraine war. It refused to support UN resolutions condemning Russia. This resulted in some US congressmen pushing for the forum to be moved out of South Africa.

The country recently hosted the 15th Brics summit, which resolved to expand the Brazil, Russia, India, China and South Africa grouping to 11 member states. The enlargement will bolster Brics’ role as a geopolitical alternative to the west, which is dominated by the US. Might this be a direct challenge to American hegemony?

I have been researching major global economic developments, such as globalisation and the impact of the 2008 global financial crisis, for 20 years. This body of work shows the risks that come with behaviour like South Africa’s. The country could find itself in the middle of a tense situation.

South Africa needs to pull off an exceptional balancing act in managing its international relations in a sensible way that protects and advances its economic interests.

Note that the geopolitical tensions between China and the US are not just about trade disputes. They also include espionage, China’s Belt and Road Initiative, climate change and environmental issues, and tensions over Hong Kong, Taiwan and South China Sea disputes.

As a major source of infrastructure financing to sub-Saharan Africa, China is now the region’s largest bilateral official lender. Its total sub-Saharan African external public debt – what these governments owe to China – rose from less than 2% before 2005 to over 17% in 2021.

Agoa might present a challenge to China as competition for its own interests in Africa. China would like African countries to untie or loosen their agreements with the US. It is thus a good moment to take stock of the actual benefits South Africa has derived from the Agoa agreement with the US.

What Agoa is about

The Agoa agreement was approved as legislation by the US Congress in May 2000 for an initial 15 years. On 29 June 2015 it was extended and signed into law by then president Barack Obama for a further 10 years to 2025.

It will come into review again in 2024, hence the importance of the upcoming summit. Recently, Louisiana senator John Kennedy introduced a bill to the US Congress to extend Agoa by a further 20 years to 2045. This is a bid to counter China’s growing influence in Africa, and to continue to allow sub-Saharan African countries preferential access to US markets.

Agoa’s benefits to South Africa

In 2021, the US was the second most significant destination for South Africa’s exports worldwide, mainly thanks to Agoa. China took the top spot; Germany was third. The US ranked third as a source of South Africa’s imports, following China and Germany. In that year, the total trade volume between South Africa and the US reached its zenith at $24.5 billion, with a trade imbalance of $9.3 billion in South Africa’s favour.

Agoa offers preferential entry for about 20% of South Africa’s exports to the US, or 2% of South Africa’s global exports. The stock of South African investment in the US has more than doubled since 2011, amounting to US$3.5 billion in 2020. American foreign direct investment (FDI) in South Africa increased by over 70% over that period, to US$10 billion. This made the US South Africa’s fifth largest source of FDI in 2019. The US was its third largest destination for outward FDI.

US investment in South Africa is mainly concentrated in manufacturing, finance and insurance, and wholesale trade, which is vital for economic growth. American multinationals doing business in South Africa employ about 148,000 people.

More specifically, Agoa’s benefits include:

duty-free and quota-free access to the US market for a wide range of South African products. This benefits South Africa’s textile and apparel industry in particular. To sub-Saharan African countries, Agoa provides duty-free access to the US market for over 1,800 products. This is in addition to the more than 5,000 products that are eligible for duty-free access under the US Generalised System of Preferences programme

export diversification, especially of items such as agricultural products, textiles, and manufactured goods. This is vital for increasing export earnings, which help to improve South Africa’s balance of payments, particularly its trade account.

capacity building through technical assistance and programmes to help South African businesses meet US standards, thus becoming more competitive in the global marketplace.

economic development and poverty reduction, which aligns with South Africa’s developmental goals.

Balancing economic interests

China is the largest consumer of South African commodity exports, and thus a key influencer of the rand exchange rate. In addition, China and Russia’s planned move towards de-dollarisation (trying to replace the petrodollar system with their own system) puts American interests under threat. This means South Africa needs to carefully navigate its relations with the US and its Brics partners, China and Russia.

It will want to keep strong ties with the US through Agoa without getting into a difficult position between China and the US. The outcome of the November meeting will have serious economic implications.

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Beijing has released a data negative list for its Free Trade Zone to facilitate cross-border data transfer for companies operating in the area. The list outlines types of data and personal information needing compliance procedures for export, aiming to ease administrative burdens and improve the business environment.

Beijing is the latest free trade zone to publish a data negative list to facilitate the export of important industry data and personal information out of the country. The data negative list outlines types of data and personal information across five industries which require certain additional compliance procedures in order to be exported. Data not included in the list can be freely exported by companies based in the free trade zone, thus facilitating cross-border data transfer. We explain how the data negative list works and discuss the potential impact on companies operating in the zone.

Beijing has released its first data negative list for implementation in the Beijing Free Trade Zone (FTZ) in an effort to ease cross-border data transfer (CBDT) for companies operating in the area. The negative list was released along with a set of trial implementation measures — the Measures for the Management of Negative List for Cross-Border Data Transfer in the China (Beijing) Pilot Free Trade Zone (for Trial Implementation). These measures outline the rules for companies located in the Beijing FTZ to export “important data” and certain volumes and types of personal information out of the country. 

The 2024 data negative list — the Management List (Negative List) for Cross-border Data Transfer in the China (Beijing) Pilot Free Trade Zone (2024 Edition) — catalogs specific types and volumes of data in five different industries that require certain compliance procedures to be exported. Data not included in the data negative list can be freely exported by companies located in the Beijing FTZ. 

Under China’s Personal Information Protection Law (PIPL) and related regulations, companies that wish to export certain volumes or types of data outside of China are required to undergo certain compliance procedures. This adds a significant administrative burden on companies, particularly those handling large volumes of data or those with overseas operations, such as foreign companies. 

There are currently three different compliance procedures for CBDT: 

The first of the three compliance procedures is the most stringent and applies to critical information infrastructure operators (CIIOs) and companies that export important data overseas. The latter two require a lower compliance burden and apply to companies that provide a certain volume of personal information or “sensitive personal information” overseas. 

In an effort to improve the business environment and ease restrictions on CBDT, in March 2024 the CAC released a set of regulations to facilitate data export, which, among other measures, allowed China’s FTZs to implement their own data governance rules. This includes formulating data negative lists to manage data export from the zones. 

This article is republished from China Briefing. Read the rest of the original article.

China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.

Vietnam’s “cooperation and struggle” strategy against China’s South China Sea behavior is ineffective, risking China’s claims. Proactive measures and stronger ties with the Philippines are essential to address ongoing maritime disputes.

Vietnam’s Challenges in the South China Sea

Vietnam’s strategy of ‘cooperation and struggle’ to address China’s aggressive actions in the South China Sea has been largely ineffective. Despite efforts to counter violations of international laws, these methods have failed to alter China’s stance, risking the solidification of its claims. Vietnam must pursue proactive, non-military measures and enhance its strategic partnership with the Philippines to better safeguard its sovereignty and interests.

On May 23, 2024, Vietnam denounced the presence of a Chinese hospital ship in the Paracel Islands, viewing it as a violation of its territorial integrity. The islands have been under China’s control since 1974, following a naval confrontation with South Vietnamese forces. This ongoing infringement of sovereignty heightens Vietnam’s concern regarding China’s intentions in the region.

Although Vietnam has engaged in agreements to foster regional stability, including a comprehensive strategic partnership with China, ongoing Chinese aggression continues to fuel tensions. The proposed Code of Conduct might provide a framework for dispute resolution; however, doubts remain about its effectiveness and enforceability, especially considering China’s history of ignoring international rulings. As such, Vietnam’s reliance on diplomatic approaches may not suffice against the backdrop of China’s assertive behavior.

Source : Vietnam must be more assertive in the South China Sea

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