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‘Catching the Value in the Value Chain’: SOE’s, State Capitalism, and Strategic Coupling in South Africa’s Automotive Sector

Authors: Ricardo Reboredo*, Trinity College Dublin
Topics: Economic Geography, Africa
Keywords: State capitalism, China Africa, Development, South Africa
Session Type: Paper
Presentation File: No File Uploaded

The emergence of Global South-based state-owned enterprises (SOEs) and their integration into transnational circuits of capital has become an increasingly important research avenue. Utilizing data collected from over 60 interviews in South Africa in 2017/2018 as well as theoretical innovations from Global Value Chain (GVC) and Global Production Network (GPN) research, this paper seeks to contribute to the literature through its interrogation of the logics, networks, and developmental mechanisms behind the $800 million Beijing Automotive Industry Holding Co.’s (BAIC) vehicle assembly plant near Port Elizabeth, South Africa – South Africa’s largest automotive investment in 40 years and a joint venture between two SOE’s. In doing so, it explores how the practices of state capitalism (specifically those of large-scale Chinese SOE’s) and the associated proliferation of ‘South-South’ discourses can affect the decisions made by Global South states attempting to upgrade and ultimately leverage GPNs.

The paper argues that the BAIC case is representative of a maturation and evolution of South-South developmental practices and discourses in that the South African state has gone beyond facilitation to position itself as the ‘guiding hand’ behind the project, a role which has generally been associated with their Chinese counterparts in their efforts to incentivize outward investment through initiatives like ‘Go Out’ or ‘Belt and Road’ (Brautigam, 2010). Likewise, the BAIC project showcases how Lee’s (2017) ‘encompassing accumulation’ strategies, what Lim (2018) refers to as ‘intended economic inefficiencies’, influence embedding practices as well as the way in which high-level discourse can create policy space for accumulation.

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