Yesterday, your writer listened in quiet reflection as a respected economist suggested South Africa’s multi-year shift to the East was not unexpected and likely to gather momentum. In a speech accompanied by much hearty laughter, JP Landman took a ‘so what’ position on the likelihood of the US yanking the AGOA trade benefits and implementing tariffs on South African goods and services. He also declared that after the first six weeks of Trump 2.0 America could no longer be considered a serious country.
South Africa a satellite in the China, US system
The commentary was so well reasoned that when presented with the opportunity to ask questions, your writer remained schtum. However, having post-conference time on his hands, the temptation to dive into the presentation and offer some alternative views on its key points was irresistible. At the very least, a digest of the presentation will offer readers a fresh perspective on the trajectories of the world’s largest economies, China and the United States (US), and how their economic and political orbits intersect with ours.
The presentation was made to a group of non-life insurance stakeholders attending the Bryte Insurance ‘Partner with Purpose’ broker roadshow. And aside from the host’s asking the economist not to swear during his delivery, your writer reckons he had free rein to unpack difficult topics covering economics and politics, domestic and foreign. The economist kicked off his ‘global forces shaping South Africa’ reasoning by contrasting China and the US, but his basis for comparison seemed to favour the former.
His assessment of America was based on the US Heritage Foundation’s Project 2025, which the economist declared the US to have adopted under Trump 2.0 despite the incoming President’s repeated denial. “The Heritage Foundation is more conservative than AfriForum and Solidariteit; they make AfriForum look like ‘pink’ liberals,” Landman joked. He pointed out that the Heritage Foundation had developed a plan to take back political control of the US after Biden’s 2020 victory and that events since Trump’s inauguration suggest they have succeeded in doing so.
Predetermined executive orders
To précis the presentation, the foundation produced a 350-page document that contained detailed lists of people that had to be fired from government and people that should be appointed. “Literally from his first day in office, Trump started issuing executive orders which were all perfectly in line with Project 2025,” Landman said. Your writer spent some time grilling ChatGPT on this accusation, and it appears plausible. The large language model, which has access to far more information than your writer can digest in a couple of hours, even dismissed the defence that one should not be surprised when a Republican president issues conservative decrees.
The evidence of this conservative focus was bullet-pointed for all to see. Commenting on the US domestic economy, Landman referenced the restructure of the federal bureaucracy under DOGE, led by South African-born Elon Musk; social policies around abortion and gender issues; deregulation to allow unfettered business activity; tighter border and immigration control; and law enforcement against enemies, to name a few. Your writer has reported these with a more positive ‘spin’ than in the delivery and laments a world where a President is put in a position to have to issue an executive order on gender.
The 10-industry masterplan
China’s case was presented under the framework of its 2015 masterplan to become a global leader in 10 crucial industries. So, while the US’ domestic policy was critiqued for common sense attempts to rein in debt and address some of the more extreme social experiments that have run over the past decade, China was praised for spearheading ‘technological independence and domestic innovation.’ China comes out smelling of roses, having snatched global dominance in five of the 10 industries and catching up in four more.
Starting with the field of robotics and automation, the presenter described the mega ‘dark factory’ facilities operated by the likes of Xiaomi, one of the main electric car brands being manufactured in China, and the dominance of China over Japan in the field of installed robotics. “In 2023, 50% of all the robots that were installed in the world were installed in China,” Landman said. On artificial intelligence (AI), the presenter described China’s Deep Seek and BYD’s self-driving software as signs of that country’s increasing global influence. He conceded that intellectual property (IP) held little sway in Chinese business’ decision making.
On semiconductors, the discussion turned to TSMC’s amazing progress in reducing circuit process node sizes to three nanometres, despite America’s efforts to halt developments in the sub-28 nanometre space. For some context, an average human hair is around 50000 to 800000 nanometres. The remainder of China’s 10 key industries (not discussed in this piece) span aerospace and aviation; biotechnology; high-speed rail; electric vehicles and batteries; new materials; maritime engineering and high-tech shipping; and agricultural machinery and equipment.
The ‘so what’ lens
Having set the scene, Landman trotted out his ‘so what’ economic analysis lens. The idea was to interrogate China and US developments to determine their impact on the rest of the world, and South Africa. The opening thread in this part of the presentation hinged on a quote allegedly by Henry Kissinger, around 1968, before he became US Secretary of State (1973–1977). He said, “It may be dangerous to be America’s enemy, but to be America’s friend is fatal.” Landman invoked the quote to suggest that the US follows a pattern of undermining both its allies and its adversaries, citing Canada, Mexico, and Ukraine as recent examples.
It is easy to become anti-Trump on his foreign policy and trade posturing, and your writer is among those who believe his delivery has been arrogant, brash, and a trifle rushed. However, there is a strong case to be made for heavy-handed intervention in an attempt to bring the US economy back to its heyday. Landman helped make the case, stating that the US share of global manufacturing had slid from 50% to around 15% over the past few decades, while China is on the ascendancy, up from 5% in 1950 to 30% today. Why then condemn MAGA policies aimed at halting this slide?
To offer Trump 2.0 a bit of support: how can South Africa, with debt to GDP nearing 80%, criticise another for introducing austerity measures? The US cannot continue on its current debt trajectory, with national debt to GDP at around 123% and a projected budget deficit for the current year of around USD 1.9 trillion. And how can South Africa, with its corruption, mismanagement, and State Capture legacy, complain about the US putting its USAID programme under intense scrutiny?
Charity; but not at any cost
At the very least, one can concede that many of the programmes under the USAID umbrella have been massively compromised, exemplifying what South Africa’s own auditor general might refer to as irregular, fruitless, or wasteful expenditure. Trump has cried enough whereas South Africa’s AG will simply sum and report on the waste each year.
The whirlwind that DOGE unleashed is probably the only way to get to grips with flagrant and systemic corruption, and might be just the ticket for South Africa too. The caveat is that the autocratic decision-making emanating from the US is aimed at improving the lot of US citizens by MAGA; it is unlikely South African politicians would adopt a similar MSAGA approach.
If the global stage is set for a tug-of-war between China and the US, where does South Africa stand? Landman’s take is that we are already shifting to the East, not because of ideology, but because the power has shifted. He argued that local business leaders have quietly positioned South Africa in this direction for over a decade. “You maintain your relations with the old, and you build with the new,” he suggested. But recent news flows suggest the shift towards the new may come at the expense of the 6% of exports destined for the US. It is anyway harsh to rank SA’s top trading partners as Asia, UK, and Europe versus US. Why not a country by country analysis?
South Africans are getting poorer, fast
Turning inward, Landman took a sobering look at 50 years of economic data. Using his preferred measure of economic health, per capita income, he noted that South Africa had suffered a real 6% contraction over the past 11 years, beginning in 2014. This contrasts with the 33% gains between 1994 and 2013, as the country reaped the ‘rainbow nation’ dividend.
If AGOA is scrapped, if our fiscal levers remain jammed, and if we fail to execute on promised structural reforms, it will not be Beijing or Washington that determines our fate, it will be our own inertia. Going forward, the best South Africa can hope for is a blend of pragmatism and self-reliance, and a balanced approach to between competing global forces.
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