There is no calamity greater than lightly engaging in war… When one is compelled to use [arms], it is best to do so without relish. There is no glory in victory… On this account the sage feels a difficulty (as to what to do).
Laozi (attributed), Dao De Jing, Chapter 69
Introduction
1. Just outside Gqeberha lies the Coega Special Economic Zone. It is a specialized commercial space designed to help lift the region from its economic doldrums, to employ various economic and industry-related best practices in order to do so, and to learn from the mistakes of the past in some of the historic collapses that contributed to the region’s underperformance. It is also the Eastern Cape home of the Beijing Automotive Industry Holding Co. (BAIC), a major Chinese state-owned car maker, where it assembles vehicles for the South African market. While not selling as well in the South African market as other Chinese brands such as Chery and GWM (Haval), it is nevertheless an important presence in the region, and in the larger South African marketplace. It employs approximately 360 operational staff, with approximately 160 permanent employees and 200 workers on short-term contracts.
2. For the last two months the manufacturing plant has been embroiled in a rather public industrial dispute, involving a range of complaints from labour union NUMSA on behalf of its members. The complaints, becoming public in May, included wage cuts, late payments of salaries and alleged forced overtime. Early efforts to resolve the disputes failed, and on the 15th June 2026 the workers entered into a protected strike, which remains unresolved and ongoing as at the time of writing this, although some elements of progress can be noted.
3. NUMSA complains that BAIC pays well-below accepted and agreed rates in comparable companies where the National Bargaining Forum (NBF) is involved. Unlike most other comparable businesses, BAIC is not a member of the NBF. Those industry rates are of course well in excess of the applicable national minimum wage, and the Department of Employment and Labour has already indicated that BAIC is paying rates exceeding the requirements of minimum wage rates.
4. Conciliation efforts at the CCMA failed, and facilitation by the DEL has not made much progress either. Bilateral talks have collapsed more than once, with BAIC withdrawing from such talks on occasion. The case is, according to the union, an important test case for the question as to whether Chinese firms will be held to South African labour standards or not, and it is a vividly illustrative case study for our discussion.
5. There are several other such instances, and we will have a brief look at those. As we will also see, this is a slowly escalating conflict, one with extremely high stakes, the principles involved are practical and far-reaching, and it demands urgent, focused attention from all stakeholders. In our discussion, it will be helpful to occasionally also reflect on comparable experiences in the rest of Africa. China is Africa’s largest trading partner, and ignoring these conflict trajectories is not in anyone’s best interest.
Non-compliance: examples and extent
6. Why should we focus on a few isolated Chinese businesses in our discussion? It is not as if South African businesses are always models of compliance, and there is a steady, persistent refrain from local businesses that South African employment laws are too intrusive, too strict, too unrealistic for our conditions.
7. The BAIC dispute framework is certainly not an isolated incident. The Institute for Security Studies (ISS) has a comprehensive 2022 report (available in the recommended reading section below), covering South Africa and five other countries, where they find “numerous labour rights violations linked to Chinese companies operating in mining, construction, fishery and manufacturing”. I suggest that it is more constructive and in everyone’s best interests to concede the existence of the conflict, and its escalation, and to discuss the reasons and values involved, and possible solutions to the problem, than to defensively deny its existence.
8. The South African government has itself recently gone so far as to warn against non-compliance and increased monitoring and enforcement, efforts which were supported by Chinese diplomats, as can be gathered from South Africa tightens labour inspections on Chinese, Pakistani-owned businesses | Business Insider Africa
9. Observed and reported breaches of South African employment laws constitute an extensive list, including low wages, a refusal to adhere to sector wage minima, non-payment for all hours worked, OHS non-compliance, unfair dismissals without proper and due process, strained relations with unions, an absence of written contracts, disputes as to what constitutes permanent employment, lack of leave recognition, UIF and COIDA registration and compliance, unacceptable practices involving the alleged exploitation of undocumented foreign workers and so on. In the South African workplace, these are foundational rights, not minor infractions.
The arguments from Chinese businesses
10. South Africa has a well-developed body of employment statutes, codes, regulations and best practices, ably monitored and enforced by levels of compliance and dispute resolution platforms, including bargaining councils, the CCMA and Labour Courts. Add the existence of a great number of competent and often rather watchful trade unions, operating in a highly unionised environment, and the South African employment regulation world is a strict one, heavily regulated in favour of worker rights and the prevention of the abuse of those workers. Most of us, especially those of us who work with it regularly, are supportive of the frameworks that exist, if not always of the actual results thereof.
11. But this is most certainly not a common cause, accepted proposition, not even in South Africa itself, with many businesses and organized business platforms repeatedly and actively arguing, often very persuasively, that our employment environment is over-regulated, that it is a system naively designed for a developed, established commercial environment (which we are not yet), and that these regulations and enforcement are in fact conflict causes for unemployment, the discouragement of investment, general economic growth and so on.
12. These criticisms are often, formally and informally, echoed by certain Chinese businesses, mostly those in the industries mentioned above. The particular Chinese arguments, as ad hoc as they may be, are bolstered by a vastly different cultural and value-based difference in how several involved concepts are viewed. Chinese law and commercial practice explicitly view business as serving in the best interest of the nation, with the role of the individual subservient to those goals in the instance of necessary conflicts of interests, with very few debatable exceptions. Production values and actual results come first, and personal interests must be integrated into those goals.
13. A close study of applicable Chinese workplace regulations will also show that the very idea of what is in the best interest of workers itself differs greatly from South African norms, from time needed on leave to union protection, to pick two examples. It is important to note that the criticism that Chinese employers do not care about their employees is therefore an unsubstantiated one, they do care for their workers, they just disagree on how that is best achieved and what concessions are necessary to be made in order to achieve that. Cultural norms often dictate long working hours, high productivity, group loyalty and managerial authority, not always important concepts in the South African workplace.
14. It is of some importance to our analysis that we also understand that the popular perception of the Chinese workplace (in China) as a lawless wasteland is completely inaccurate. They have well-developed laws (anchored in the Labour Contract Law), they have rules restricting arbitrary dismissals, they have trade unions, social insurance contributions and so on, just less of it, interpreted differently, and applied with other goals in mind. It should therefore discourage South Africans arguing an absence of such frameworks, and Chinese businesses operating in South Africa should also not be heard claiming a complete ignorance or lack of exposure to regulations such as ours.
15. Informally, and in my own experience, Chinese business owners in South Africa are generally not purposefully setting out to break South African labour laws. They have a very different, and very strongly held set of beliefs, as to how business works, how employees should act, and crucially, what it takes to build businesses that benefits all involved. We will return to this conflict of views below.
Briefly stating the challenge
16. There is clearly a regulatory divide between the two countries, made the more complex because of the widely divergent philosophical and other worldviews underpinning the respective approaches. This friction between profit and principle, the compliance gap, the clash between global capital and local labour standards can of course be dismissed, as it is so often, with a simple insistence on legislative compliance. If you want to do business here, you need to comply with our laws and standards. There is, at first blush, little to argue against such a position.
17. But the conflicts remain, and given South Africa’s current and anticipated future business and other alliances with China, as our biggest bilateral trading partner, it shows every indication of simply becoming more focused and exacerbated in the near future. Ignoring conflicts, especially large scale economic ones, is an awful conflict strategy, as we can see from so many other examples around us.
18. That simple “comply if you want to work here” injunction can be enforced, many countries do so, but I suggest that we should only insist on that type of rigid stance if we have no other, better solutions to the conflict. And I believe that we have a few options that should be debated, and if regarded as improvements, integrated into our commercial landscape before these unresolved conflicts do serious harm to our already fragile economic position.
An analysis of possible solutions to the conflict
19. Continued insistence on an oversimplified “comply or say goodbye” approach will escalate the conflict into widening circles that will, before long, jump our legislative rails and involve us in questions of investment, development and other crucial geopolitical importance, all happening at a time in the development of the multipolar world where it would be of catastrophic effect.
20. That does not mean, and I am not advocating for, a relinquishing of South Africa’s sovereignty or political dignity. Quite the contrary. It is a question of our geopolitical conflict competence, our efficiency in looking after our own best interests.
21. Any argument that this would be an unwarranted exception for a trading partner, a slippery slope type of argument, would be unfounded. China is not just any old trading partner, and every instance should be approached on its own merits, and with South Africa’s best interest foremost in our strategizing. It is also not a question of any concessions, where we give away that which we would have preferred to keep, but in analysing and then integrating the best option. I am not convinced that a simplified insistence on adherence to our labour laws is in fact the best solution to this conflict for us, so the concern around conceding assets, or seeming to be weak at the negotiating table, also collapses.
22. What are the alternatives, then? We look at a few, with there being a few others that could do with some development first.
(i) Compliance
23. Let’s test the simple compliance option first for benefits for South Africa. Demanding adherence may, in time, lead to an acceptance by Chinese businesses that compliance is a business cost, and that it makes more sense to comply, and gradually we see the problem and frictions dissolving. I am not convinced, for a number of reasons, mainly in that South African businesses themselves are often not convinced, years later. The Chinese decision-makers also have options and alternatives that South African businesses do not have, and while we are China’s number one African economic and trading partner, we do not make the top 15 of its global trading partners.
(ii) Specific legislation
24. A fascinating idea is to have South African legislation and compliance processes specifically designed for Chinese (and arguably other foreign employers) that could recognize these differences, and stipulate regulatory frameworks that seek a balance between the South African concerns (worker stability, safety etc) and Chinese views. This could be argued, and designed, as temporary bridging legislation, leading to conflict transformation along negotiated tracks. This is certainly not without precedent, and it can simply form a part of our existing legal and regulatory frameworks, and enforced as such. It can be combined with a range of other provisions, from taxation to investment considerations.
(iii) Exemption/immunity
25. What about China simply being exempted from some, or all of our labour laws, for a specific period of time, with specific guidelines, conditions and benefits to the South African economy negotiated into such an arrangement? I can see the objections right away, and maybe there is merit in such concerns. But the option requires careful consideration, and a weighing up of not just two, but a range of possibly divergent, even incompatible interests.
26. The conflict between Chinese business owners and various Ethiopian stakeholders that led to the 1998 conclusion of the Bilateral Investment Treaty between these two countries can serve as a salutary case study for South Africa. In her wonderful 2026 book Immunity on trial, Miriam Driessen sets out the history, nuances and results of this important conflict, and we can gain much from that experience, as much as there are of course distinctions in the two countries so compared.
27. It establishes the value of sovereignty, but also shows how, at times, that sovereignty needs to make concessions in order to expand itself, or even to safeguard it (what she calls the “paradox of sovereignty”). Driessen highlights the splintering of opinions even within the Ethiopian population, with several communities being quite prepared to grant such exceptions, while others could not countenance such options. She very clearly shows the Chinese perceptions around their involvement being to the benefit of the country, and any litigious responses amounting to ingratitude. One of the Chinese arguments that can certainly not be easily dismissed is the concern around a judicial system, operating independently of the legislative parts of a government, effectively deciding on the interpretation and enforcement of laws and judicial sanctions, and the unintended harm this can cause that country.
28. But exemptions, or then immunity, complete or specified, need not even get to the complexities and sensitivities of sovereignty arguments. Countries make concessions, and make trade easier, for valued business partners all the time, through tariffs and other legislative mechanisms. These exemptions need also not come at the expense of the affected employees or workers of other classifications, and safety net provisions and long-term trade-offs can be built into such legislation or negotiated agreements. It can, if skilfully managed, dissolve the problem by agreement over time.
(iv) Revise South African labour laws and enforcement regulation
29. Are our laws and their enforcement too strict, and do they cost us dearly in investment and other economic benefits and potential? Persistent and rising voices calling on a relaxation of some of these measures, and the adopting of a more modern, risk accepting, working environment argue that this is the case, while current employment law bills and public narratives (including current case law) certainly does not support such an argument, with no sign of any meaningful change in trajectories on the horizon.
30. Theoretically, changing some of our labour laws and their compliance frameworks, not as an exercise in assisting Chinese businesses, but in relaxing such concerns in the general workplace environment, may have a positive effect on the conflict in our discussion, but practically speaking there does not seem to be much political will for that option.
Conclusion
31. A country’s independence, dignity and sovereignty can of course not be reduced to financial considerations only. Similarly, the dignity, job security, quality of work and the hard-won rights of individual workers should not be judged as less important than the real or imagined economic benefits of a particular trade relationship. South Africa has arrived at its exalted place in employment conflict through much hard work and suffering, a process that is still ongoing.
32. But that brings us back to my earlier point. I am not arguing that any of these rights should be minimized or lost in the interests of that trade relationship. I am arguing that we should robustly, and urgently, debate whether our current laws and regulations, and their rigid enforcement, is in fact the best option for our people. In this process we need to honestly evaluate our options, some of which we have briefly looked at here. If we find that we are best served by that rigid adherence to our labour laws then so be it, we need to draw those lines and enforce them. But, as I have argued, I am not yet convinced that we do not have other, more constructive options available to us. The stakes are incredibly high, for our local and geopolitical options and best interests. The problem will not get better in the denial or delaying of it.
Summary of main sources, references and suggested reading 1. The 2022 Institute for Security Studies report can be accessed at https://issafrica.org/research/monographs/chinese-labour-practices-in-six-southern-african-countries
2. An article highlighting some of the cultural and value-driven differences between the worldviews can be accessed via Values gaps affecting human resources management relations between expats and locals: The case of a Chinese manufacturer in South Africa: Africa Journal of Management: Vol 7 , No 2 - Get Access 3. A helpful study of Chinese clothing firms in the Newcastle area can be accessed at Factory, family, and industrial frontier: A socioeconomic study of Chinese clothing firms in Newcastle, South Africa: Economic History of Developing Regions: Vol 34, No 3
4. Immunity on trial by Miriam Driessen, University of California Press (2026)
5. My four-part series on synergies and differences between Western and Chinese negotiation skillsets and strategies starts at https://www.conflict-conversations.co.za/conversations/eastern-winds-of-change-a-study-of-modern-chinese-conflict-management-philosophies-strategies-and-techniques