By Minister Jeff Radebe
[[{"type":"media","view_mode":"media_large","fid":"404772","attributes":{"class":"media-image","id":"1","style":"margin: 3px; float: left;;;;;;;;;;","typeof":"foaf:Image"}}]]One of Africa’s leading economies and the world’s largest developing country are on track to forge even stronger trade and investment ties that will define the long-term relations of the respective nations.
President Jacob Zuma, accompanied by a 100 strong business delegation, will this week begin a two day State Visit to China which will culminate in the signing of ten strategic agreements.
The visit consolidates the strong economic and political ties we have built over the last 16 years since the establishment of formal diplomatic relations and opens new opportunities to grow our economies.
The agreements on the cards include the strengthening of bilateral relations, deepening areas of cooperation, setting requirements for the export and import of products, promoting investment and concluding financing deals.
President Zuma and his Chinese counterpart President Xi Jinping will review the bilateral relations between the two nations to ensure that the strategic relationship is strengthened and development in South Africa and Africa is prioritised.
During the visit the China-South Africa 5-10 Year Framework on Cooperation will be adopted which will ensure that the agreements from the Beijing Declaration signed during President Zuma’s previous State Visit in 2010 are strengthened and expanded.
Importantly, we will use this opportunity to discuss with China how it can support our nation’s industrialisation by investing in the development of science and technology, agro-processing, mining and mineral beneficiation, renewable energy, finance and tourism.
The National Development Plan which charts our course to 2030 commits us to an industrialised path in order to grow our economy so that we can overcome the triple challenge of unemployment, poverty and inequality.
It highlights for example that South Africa could become a global leader in the manufacturing of goods, and rendering of services to the mining industry, where it has substantial know-how.
The State Visit will also review progress on the cooperation of Chinese companies in equipment manufacturing and the localisation of procurement through joint ventures with South African companies for the building of new passenger trains.
To improve passenger rail services in the country the government has embarked on one of the world’s biggest rail projects to overhaul passenger trains. We are building a factory in Ekurhuleni early next year to produce the required parts. The project will create over 1 500 direct jobs in the factory and 33 000 indirect jobs over the first 10 years.
It is through the various agreements entered into since the establishment of formal ties in 1998 that China has become the top destination for South Africa’s exports making it the country’s single-largest trading partner since 2009.
Last year our bilateral trade with China increased by 32 per cent to R270 billion from R205 billion in 2012. Meanwhile, South Africa is China's largest trading partner in Africa.
However, the trade relationship has been skewed in China’s favour as South Africa’s major exports have traditionally been raw materials from the mining industry. In contrast, South Africa imports finished products such as clothing, machinery and equipment.
Recognising the need for a more equitable trade balance, the two countries are working to correct the situation. South Africa is promoting its value-added exports to China and this year was designated as the “Year of South Africa in China”.
Through this initiative we have showcased South African innovations and best practices in areas such as science and technology, mining, arts and culture, tourism and people to people interaction.
We also used the opportunity to profile South Africa’s political, economic, social and cultural achievements since the advent of a democracy. Next year has been designated the “Year of China in South Africa”.
To help rectify the trade imbalance there has been a deliberate move to increase investment by Chinese firms in South Africa. Between January 2003 and January 2014 we have recorded 38 foreign direct investment projects valued at R13.3 billion.
The Minister of Trade and Industry Rob Davies emphasised that measures are in place to ensure a fair trade spread. "We agreed that there should be procurement missions coming to South Africa targeting the acquisition of value added products," he said.
Away from the headlines there are numerous Chinese companies that are helping to reduce unemployment. During the period, a total of 10 992 jobs were created.
Earlier this year Chinese truck manufacturer First Automotive Works opened a R600 million assembly plant in the Eastern Cape which has boosted our skills development and training.
In its first plant outside of China, the world’s fourth-largest solar photovoltaic manufacturer, Jinko Solar had invested R80 million in a manufacturing plant in South Africa that creates 250 jobs.
Last year Chinese consumer electronics company Hisense opened a R350 million factory in the Western Cape which would create 1 200 jobs in the area.
In terms of South Africa’s investment profile, Chinese Ambassador to South Africa Tian Xuejun said: “South Africa is a pearl shining brilliantly in Africa and boasts unique conditions for development.”
While South Africa and China are strikingly different in their cultural, political and socio-economic positioning, they are very close in their stance on key issues affecting mankind.
The State Visit will help strengthen this relationship. Both countries champion developmental issues, South-South Cooperation and participate in a number of multilateral forums.
Moreover, the work of South Africa and China through the BRICS grouping is helping reform the global political and economic architecture.
The level of cooperation between China and South Africa in addressing global challenges showcased with the headquarters of BRICS’ New Development Bank in Shanghai and its African Regional Centre in South Africa.
China regards South Africa as a key partner in advancing its relations with the African continent.
We aptly demonstrated this by successfully hosting the 5th BRICS Summit in Durban last year where for the first time African leaders were invited to attend, thus creating a platform for dialogue between BRICS and the continent.
South Africa is an important entry point to the rest of the continent. We are a viable investment partner for Chinese firms seeking to take advantage of the investment opportunities unfolding in Africa.
South Africa sees China as a key partner in creating a better world. We will use the State Visit to entrench this partnership and ensure a mutually beneficial relationship to move our country forward.
Jeff Radebe, Minister in The Presidency for Planning, Monitoring and Evaluation
