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Unless you have been in a political black hole, you know the real reason the Dalai Lama didn’t make it to Bishop Tutu’s 80^th birthday bash in Cape Town….the China Fear Factor! The South African government did a simple cost/benefit analysis and subsequently became the party pooper and disinvited the Dalai Lama as a guest.

Actually Zuma’s government has very good reason to be fearful of China’s wrath according to two German economist, Andrea Fuchs and Nils-Hendrik Klann in their paper “Paying a Visit: The Dalai Lama Effect on International Trade.”

"Meetings of a head of state or head of government with the Dalai Lama lead to a reduction of exports to China by 8.1% or 16.9% on average, depending on the estimation technique used."

According to the researchers, governments across the globe have felt China’s economic sting after meeting with the Dalai Lama:

• Economic and diplomatic relations between China and France began deteriorating after President Nicholas Sarkozy met the Dalai Lama in spite of threats from Chinese authorities should they do so. France was crossed off the travel agenda of two Chinese trade delegations in 2009. In the same year, Chinese Prime Minister Wen Jiabao did not pay a state visit to France during his trip to Europe.

• The United States suffered the wrath of the Chinese after President Barack Obama met the Dalai Lama. The move soured relations with China, which undermined the US's recovery from the current economic crisis.

• Recent meetings between the Dalai Lama and leaders in Mexico, the United Kingdom, Italy, Mongolia and Germany had also damaged relations with the Asian giant.

China’s African Strategy “to build a continent”

The Dalai Lama incident is an example of China’s goal of building an Africa in China’s image and the “One China” policy is central to that image. One report said Africa's 5.7% GDP growth last year is also largely credited to China.

In 2007 China founded the China-Africa Development Fund (CADF), with an initial investment of $1 billion, to establish three to five trade and economic cooperation zones. Partnering with CADF is China's large state-owned enterprises (SOEs). These economic structures are “interested in sectors such as energy, transportation, information and telecommunications, infrastructure, mining, agriculture and manufacturing.” 

The trade volume between China and 53 countries in Africa reached $106.8 billion in 2008, exceeding $100 billion for the first time.  Currently, there are over 1000 Chinese enterprises approved or filed with the Ministry of Commerce operating in Africa in many fields such as trade, production and processing, resource development, transportation, agriculture, and comprehensive agricultural development. There has been an increase in Chinese settlements in various countries on the continent.  As of May of 2011 more than a million Chinese experts and skilled workers are on the ground in Africa. [1]

The Ministry of Commerce says that African countries lack building funds due to the financial crisis, so the cost advantage of Chinese enterprises has become prominent. In the first six months of 2009, new labor contracts signed by Chinese enterprises in Africa reached $ 22.45 billion, and the completed turnover totaled $11.53 billion, up 25% and 61.1%, respectively. "Since the founding of the China-Africa Cooperation Forum, China-Africa trade has contributed 20% to African economic growth." [2]

South Africa a “special buddy pass”

"South Africa is increasingly becoming China’s investment focus and China wants to diversify its investments in South Africa to other sectors of the economy such as information technology, biotechnology, human resources and other industry services," China Industrial Overseas Development and Planning (CIODP) Vice President and Secretary General Fan Chunyong said at the China and SADC Investment Conference held at Sinosteel Plaza in Johannesburg.[3]

Zuma visited China for the first time in August last year, accompanied by a 300-strong business delegation, and signed a comprehensive strategic partnership with the country that would result in more than R100-billion invested in South Africa over five years to support projects in culture, education, media, health, tourism and financial services.

China has edged out the US and Japan in recent years to become South Africa's biggest trade partner. The Industrial and Commercial Bank of China acquired a 20% stake in Standard Bank in 2007.

Last week, Deputy President Kgalema Motlanthe raised more than R20-billion of investment during his visit to Beijing as part of the partnership.

South Africa has increasingly tied its diplomatic fortunes to China, which rewarded the Zuma government with membership of the BRICS grouping of major emerging economies that also includes Brazil, Russia and India.

South Africa, with a GDP less than a quarter the size of the smallest BRIC economy, Russia, has hoped accession to the group would increase it trade and prestige.  (However, South Africa’s membership has not paid dividends. All major BRIC-related investment funds have excluded South African shares from their portfolios.)

One anonymous South Africa government was very clear, "in this saga, we had to put our national interests first," said a government source. "We have a lot invested in China and support the one-China policy. Are we prepared to compromise that by taking an unprincipled action and supporting Tibet's secession from China? No."

China’s ‘hear no evil, see no evil, speak no evil’ foreign policy

The strategic charm of Chinese money is that it is unobstructed, there is no pre condition on economic performance, and they do not interfere with the type of governance in the state, be it a democracy or a Pariah state.

China’s interests as pure and simple, they see oil, minerals, and markets for Chinese manufactured goods. They take a play out of the Cold War play book, “…no permanent friends only permanent interest.”

China to the Rescue, West is the true villain

According to the Chinese, Western countries are at the root of most of the problems that African countries face today. They colonized or subjugated the countries, exploited their resources and manpower and left the people to suffer the pangs of abject poverty. Such was the level of exploitation that even after winning independence most of the African countries could not reconstruct their economies.

“The story doesn't end there. African nations are still denied their right to be represented and heard at international forums. The North always talks about strengthening North-South dialogue because that would be to the benefit of Western powers. The West rarely talks about South-South cooperation because that would mean a consolidation of developing countries, which China is.

China cooperates with Africa not only because of its resources because it will never exploit another country. Instead, China's aim is to help African countries' realize economic development.”