Business Day (Johannesburg)

South Africa: SA-Born Chinese and the Colours of Exclusion

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Johannesburg — THE vociferous reaction from some groups to the decision that South African-born Chinese should be considered historically disadvantaged is disturbing.

It underscores the risk that black economic empowerment (BEE) could turn into a racially charged fight between elites over the spoils of freedom, instead of being an instrument to develop a more inclusive, equitable economy.

The reaction is particularly startling because the court's decision will increase the number of historically disadvantaged individuals by less than 0,25%. The ruling affects about 10000 SA-born Chinese, with no implications for the estimated 200000-300000 Chinese immigrants who arrived after 1994.

Hostility to the ruling has been fuelled by the misperception that South African Chinese were classed as "honorary whites" under apartheid. That is simply incorrect. Apartheid laws classified Chinese South Africans as coloureds, similar to people of Malaysian descent.

Like most other non-African citizens, the majority of Chinese South Africans arrived after 1870, with the opening of the gold mines. Thousands arrived as indentured mineworkers but most were deported after a few years. The few hundred who remained managed, despite persistent discrimination, to build small communities.

Chinese South Africans were less oppressed than Africans - they did not have to carry passes, enjoyed better services and facilities, and had greater access to the economy. Like other coloureds, however, they were barred from the best state facilities, schools and suburbs, and many economic opportunities.

And, despite the hullabaloo about employment equity and BEE, the effects of apartheid linger for both coloureds and Africans. According to the Labour Force Survey for March last year, only 1,4% of coloureds earned more than R16000 a month, compared with 1,1% of Africans and 16% of whites. Moreover, 2% of Africans ranked as professionals or managers, compared with just 4% for coloureds but 22% for whites. Meanwhile, the unemployment rate came in at 30% for Africans, 20% for coloureds, and only 4% for whites.

Finally, the most visceral source of criticism of the court decision comes from hatred for Taiwanese investors in the 1980s who ran sweatshops in places such as Newcastle and Botshabelo. But that issue is irrelevant. Taiwanese factory owners did not become citizens and therefore will not benefit from the ruling.

We may need a discussion on whether employment equity should distinguish between different groups of historically disadvantaged individuals - not only between Africans, Asians and coloureds, but also, as the broad-based BEE codes begin to do, between women and men. But a reasoned policy debate is not helped by attacks on smaller, less vocal groups within the black community.

A further problem is that attacks on the court decision apparently view BEE and employment equity as a zero-sum game. In this view, these policies should merely reshape competition between those individuals who have education, skills and some access to capital. As these groups fight it out, the economy could continue to marginalise and exclude the vast majority.

In contrast, the challenge is how to ensure that measures aimed at creating a more representative economy contribute to the struggle against poverty. According to the 2005-06 Income and Expenditure Survey, half of all households survived off less than R2000 a month, while the top 10% enjoyed 15 times that. Of that top decile, only a third were black, compared with 95% of the poorest half of households.

To grow economic opportunities for most black people, BEE and employment equity must not aim only at a new division of riches among the elite. Rather, they must help transform the economy to support employment creation and access to economic assets on a mass scale. Chinese South Africans have as much right to gain from this as other formerly disadvantaged people.

Makgetla is sector strategies co-ordinator in the Presidency.

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