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Stephen Marks does a roundup of China-related news for Africa and around the world.

The impact of the world crisis will be felt for years to come, warned South African Finance Minister Trevor Manuel as he reported back from the ‘G20’ meeting of heads of government and finance ministers in Washington. But "Our financial sector in South Africa is working much better than most," he claimed.

The reason? South Africa's financial sector has been largely cushioned from the banking crisis due to exchange controls that limited exposure abroad and because of relatively conservative lending practices. And the National Credit Act, introduced in 2007, guards against excessive lending.

On the eve of the Washington meeting, African leaders urged the G20 leaders to give more weight to Africa

At the meeting Chinese President Hu Jintao called for international efforts to help developing countries and the least developed countries cope with the global financial crisis.

Former World Bank Chairman James Wolfensohn stressed the importance of the fact that the‘old boys club’ of the G7 was giving way to the wider G20 grouping.

‘The G-7’s dominant role in international affairs over the past half-century was explained by its collective economic weight: Between 1965 and 2002, it accounted for a remarkably constant share of global output — about 65 per cent’ he pointed out.

‘In recent years, however, the G-7 began an evanescence. Its share of global output has fallen to 52 per cent. By 2030, it is likely to be down to 37 per cent; by 2050, to a mere 25 per cent....Against this backdrop, it is inconceivable that today’s global challenges could be addressed without the support of China, India, Brazil and other emerging powers. This is not simply a matter of fairness or generosity but one of efficacy and realism.

Thus the G-20 is the correct body to tackle a crisis of this magnitude. Its members account for 90 per cent of global output and two-thirds of the world’s population. It is diverse — with five countries from Asia, three from Latin America, two from the Middle East and one from Africa — and represents our rapidly globalising world.

‘Western leaders must be careful not to slip into old habits in dealing with their new partners. The tendency to summon others to meetings or to see dialogue as an opportunity to educate others as to their best interests is a vestige of a bygone era’. he stressed.

South Africa’s clothing industry is waiting to see if the quota on Chinese imports will be renewed for another year. But one clothing industry consultancy argues that ‘The China syndrome that has dominated the discourse of South Africa's apparel sector is no longer as relevant as it was in the past’. China’s own clothing industry is itself facing competition from lower-cost producers. The quotas themselves have been widely evaded by fraudulent relabelling of Chinese goods. But most important, in the consultant’s view, is the failure of South Africa’s government to come up with a long-promised strategy to re-equip and upgrade the country’s own clothing industry.

The former Portuguese outpost of Macao is playing a key intermediary role in trade links between China and the Portuguese-speaking world, including former Portuguese Africa, as was made clear by a recent trade forum.

Asia-Pacific forum

India and China's ability to resist the global economic slowdown will greatly influence whether the crisis drags the world into a depression, a top Pacific Rim trade community economist said on the eve of a summit of the 21-nation Asia-Pacific Economic Cooperation Forum.

When Hu Jintao, China's president, arrived in Lima for the meeting he was accompanied by twelve ministers and almost 600 business leaders and support staff. He signed a bilateral trade agreement that could see China overtake the US as Peru's main trading partner.

China is clearly developing its Latin American presence with a comprehensive strategic approach reminiscent of its African intervention.

China’s multibillion boost

Stephen Wong, writing in the Asian Times, was not convinced that China’s $586bn economic package would do more than repeat the traditional boost to state-driven infrastructure investment, while doing little to aid domestic consumption and the private sector; not to mention the likelihood that it would simply represent a

mega-buck banquet for corrupt officials.

But his pessimism was not shared by a leading China economist with the Royal Bank of Scotland in Hong Kong."I think in a decade, we'll be looking back at this moment and saying, 'This was it. This was when things really changed and China's economy transitioned from externally, export-oriented to an internal focus,'" Ben Simpfendorfer told Time magazine.

The World Bank also gave the package a favourable reception. So did the Bank’s President Robert Zoellick in his

report on the G20 meeting.

Despite factory closures in the south, and fears for the future, some Chinese economic indicators show a continuing vigour. In the first 10 months of 2008 foreign direct investment in China increased by 35% compared to the same period in the previous year. And China’s retail spending in October was up by 22% over October 2007.

But one writer warned that ’Attempting to reshape China into an American-style mass consumer economy… is a recipe for economic, environmental, and probably political, disaster’.

However there seemed little sign of such warnings being heeded by some local officials as it was reported that environmental restraints were being relaxed to boost the economy

At the same time there were reports from some provinces of minimum wages being fozen to help struggling firms and in two provinces firms were told to seek official approval before laying workers off

‘Mass incidents’

The ‘Chinabeat’ blog, has an interesting discussion of recent shifts in how the Chinese media reports ‘mass incidents’, as riots and protests are officially described. Some observers see a more sophisticated response by the authorities in response to the growth of the internet and a more assertive and informed public opinion.

This changing official response is variously seen either as a move to greater openness and accountability, or just greater sophistication in media manipulation. But there is also the interesting question, whether the increasing coverage of ‘mass incidents’ in the western press just reflects a greater interest in the topic, now that it can be related to the running story of the impact on China of the global recession.

Going shopping?

The crisis could provide an opportunity for cash-rich China to go on a spending spree for foreign assets. There have even been reports thatChinese automakers could buy GM and Chrysler.

But China’s own auto industry is pressing Beijing for a bailout

Pirates

China has not been immune from the actions of pirates off the Horn of Africa

India’s navy won battle honours by sinking a Somali pirate vessel.

‘The world should not be surprised if China builds an aircraft carrier; but Beijing would use such a vessel only for offshore defence, a senior official of the Chinese Ministry of National Defence told the Financial Times.

Admiral Timothy Keating, head of US Pacific Command, said in Beijing last year that Chinese development of a carrier should not be the cause of any unnecessary tension, and that the US would even be willing to lend a helping hand.

∗ Stephen Marks is a research associate with Fahamu’s China in Africa programme.