Honourable Ministers
Distinguished captains of industry and commerce
Ladies and gentlemen
I am delighted to visit Shanghai as part of my state visit to the People’s Republic of China.
We come here after a very successful stay in Beijing. We have had very fruitful discussions over the past two days with the government and the private sector, to deepen and expand our political and economic relations.
We have been received very warmly and made to feel at home indeed in China.
This meeting is a continuation our efforts to enhance our mutually friendly, brotherly and sisterly ties into economic partnerships.
I am also pleased to have this opportunity to talk on a subject that at the outset invokes a positive outlook: “South Africa – A Modern Economy,” which is the theme of the South African Pavilion at the Shanghai World Expo.
The timing could not be better because, for good reason, there is growing optimism in Africa and a widespread consensus on the need to bring Africa into the mainstream of the global economy.
Africa is getting its house in order and Africans are creating, on their own initiative, the conditions - including peace and stability and good political and economic governance - for economic revival. But there must be no doubt that South Africa’s destiny is intertwined with that of the rest of Africa.
In Africa, the fate of each of us is dependent on that of the other and the economic journey of South Africa is tied to this promise of economic revival and take-off in Africa.
Ladies and gentlemen,
Since the dawn of the democratic dispensation in 1994, South Africa has achieved a level of macro-economic stability not seen in the country for 40 years.
This can be attributed to a host of factors including policies seeking to promote domestic competitiveness, growth and employment and increasing the outward orientation of the economy.
We are now moving out of the recession with the last three quarters reporting positive growth.
According to latest reports, real gross domestic product at market prices increased by four point six percent during the first quarter of 2010 compared with the fourth quarter of 2009.
Our Industrial Policy Action Plan has identified targeted sectors that government will focus on in encouraging competitiveness to ensure that the economy continues to grow in a diversified manner. The South African economy will continue to grow in a robust and resilient manner and has shown that it can withstand the shocks that are present in the global economy today.
The growth is also underpinned by rising levels of fixed capital investments. Our aim is to accelerate growth to the levels that are present in the BRIC countries.
We live in an age when many nations, including South Africa and China, face the common challenge of turning a legacy of underdevelopment and poverty into sustained economic growth and socio-economic improvement.
We live in a world in which economic power is still very unevenly balanced between developed and developing countries.
South Africa is eager to learn from those countries such as China, who have succeeded in meeting this challenge.
The excellent political relationship that exists between our two countries has fostered not only economic but commercial cooperation as well.
We however need to explore ways and means of continuing and increasing our investments in each other’s economies.
We have been working to create the right environment for that to happen. South Africa’s re-integration into the global economy has been remarkable since 1994.
We have diversified our trade by geographic region and, to some extent, in terms of products traded.
Our main trading partners have remained countries in the EU and the United States.
However, our trade is growing fastest with countries in the South, particularly those in Asia and Africa.
Growth in trade with China has been particularly dramatic in recent years.
In part, the diversification of our trade has been a result of trade agreements that have been concluded with the EU; the Southern African Development Community and the European Free Trade Association.
We also benefit from the US Africa Growth and Opportunity Act.
We are about to conclude a preferential trade agreement with MERCUSOR and we have just launched one with India.
As for our trade with Africa, we know that more than ever before, the nations of the developed and developing world are considering how best to work in concert as Africa’s partners.
In addition to the forum on China-Africa Cooperation, Africa is finding new partners among the emerging economic powerhouses of the South, having established trade and investment cooperation framework arrangements with India and Latin America.
This is not surprising as Africa has a tremendous future and offers tremendous opportunities for investors. I said at the start of this input that South Africa’s destiny is indeed intertwined with the continent.
This is why South Africa is now among the biggest investors in the continent south of the Sahara, in sectors such as mining, electrical power, financial services and telecommunications.
South Africa’s foreign direct investment has increased from ten to 100 billion rands.
South Africa’s total trade with the continent has grown almost seven fold since 1994.
Although the trade balance favours South Africa, there has been an increase of imports from Africa during the same period which is an encouraging development for intra-regional trade. We are also working to establish South Africa as a regional financial centre that will make it easier and less expensive for our African partners to raise capital for growth by opening our markets to African and global financiers.
Ladies and gentlemen, I would like to address the relationship between South Africa and China.
Already since the establishment of diplomatic relations in 1998 total trade has grown significantly and China has become our largest trading partner in the world with total trade amounting to one hundred and twenty billion rands.
The total Chinese investment in South Africa as of today is in excess of thirty seven billion rand, following the announcement of the strategic partnership deal between Standard Bank and the Industrial and Commercial Bank of China Limited.
We also know that there is growing investment in the areas of household electrical appliances, clothing, textiles and mining. South Africa also has a significant investment presence in China.
Certainly, South Africa’s policy stance is to develop and strengthen relations with countries in the South, and China forms a critical axis in those relations.
However, the central challenge that we face and must address is the structure of trade, if we are to ensure a sustainable economic relationship.
An exchange of commodities for manufactured goods cannot be sustained in the longer term.
We understand this to be a shared challenge that can be addressed effectively by both governments as we are aware that the future of our trade relationship cannot be left only to the private sector.
In this regard, in Beijing we signed the Comprehensive Strategic Partnership Agreement (CSPA) between South Africa and China, which should place our economic relationship on a more secure and sustainable footing by ensuring more balanced trade and investment flows.
This agreement has become the economic blueprint for strengthening our relationship over the next five years and more.
We also see great scope for South Africa and China cooperation to respond to the African development challenge.
There are various opportunities to be explored, which make us very optimistic indeed about the years ahead. We extend our heartfelt gratitude to the government of China for the hospitality extended to us during our stay, and for the fruitful meetings.
We look forward to meaningful interactions going forward in the structures through which we will implement the Comprehensive Strategic Partnership.
In closing, let me congratulate China for hosting one of the finest World Expos. I urge you to visit the South African Pavilion to get a taste of what South Africa has to offer.
I hope all of you present here today, will also take time to visit South Africa and verify for yourself why our country is indeed a vibrant and modern economy.
I thank you.
Source: The Presidency
