Article link: https://www.reuters.com/world/africa/transnet-tender-locomotive-repairs-after-reaching-impasse-with-chinese-supplier-2023-01-12/
South African company Transnet reached a stalemate with Chinese rail company CRRC E-Loco regarding the ongoing negotiations of contracts that secure reciprocal exchanges, which had been secured just last year. Transnet refused to send locomotives to CRRC E-Loco (among other companies) following the new board deeming previous contracts unlawful/unjust. The Chinese company is reportedly unwilling to engage in further civil discourse or negotiations with the South African company or government (which runs and controls the company as well). Transnet is looking for new sources of locomotives to replace the locomotive resources they had been receiving from Chinese company CRRC E-Loco. Transnet business has been down due to poor services/performance, which can be attributed to lack of materials as a result of the loss of exchange between the two companies. The resolution they have reached has already proven to be affecting Transnet negatively, and is likely also inhibiting CRRC E-Loco (hence their refusal to comment on the matter).
The fact that the South African government owns and runs Transnet makes the Chinese company’s decision to sever ties much more severe. It is also directly tied to the South African economy as a whole, making these business losses and subsequent degradation of quality as well as lack of materials influential for the economic future of South Africa. However, this is unlikely to affect more than the rail systems and automotive aspects in South African society. On a larger scale, China has been South Africa’s largest trading partner since 2010.
We read an article in class expressing a realist perspective on offshore balancing from America. The article expressed the danger of letting China make allies with countries we begin to neglect, thereby increasing their influence and decreasing the spread of democracy. Although this is just one company, it could be an indication of a trend of China moving away from South Africa towards more lucrative or strategic economic relationships. We also examined China’s String of Pearls strategy to contain India from becoming a world power. As I mentioned previously, this is just one company and most likely doesn’t represent Chinese political or economic intentions as a whole. However, it is interesting that a Chinese is neglecting relations with a company so intertwined with the South African government, and it could be a hint to their national interest leading them to focus more on business relations within the String of Pearls.