SA, China to review bilateral relations

Thursday, November 27, 2014

Pretoria - The review of the status of bilateral relations between South Africa and its number one trading partner, China, will form part of discussions during President Jacob Zuma’s upcoming State visit to China.

Briefing the media on Thursday, International Relations and Cooperation Minister Maite Nkoana-Mashabane said bilateral relations will be reviewed to ensure that the existing strategic relationship with China is further strengthened. Focus will also be on the priority issues of development in South Africa and Africa.

President Zuma will undertake a State visit to China from 4 - 5 December.

He will be heading to China following an invitation by Chinese President Xi Jinping, who paid a state visit to South Africa in March 2013.

Another objective of the visit will be to discuss ways of supporting South Africa’s industrialisation agenda by agreeing to invest in the development of science and technology, agro-processing, mining and mineral beneficiation, renewable energy, finance and tourism.

President Zuma and his Chinese counterpart are also expected to review progress on cooperation in infrastructure development.

The President’s visit coincides with South Africa’s celebrations of 20 Years of Freedom and Democracy following the declaration of 2014 being the “Year of South Africa in China”. 2015 has been declared the “Year of China in South Africa”. 

“The overall objective of the Year of South Africa in China was to profile South Africa’s political, economic, social and cultural achievements since the advent of the first democratic government in South Africa in 1994.

“The year also sought to explore more economic opportunities and also showcase South Africa’s innovations and best practices in various sectors such as science and technology, mining, arts and culture, tourism and people-to-people interaction,” said Minister Nkoana-Mashabane.

This year marks the 16th anniversary of the establishment of diplomatic relations between the South Africa and the People’s Republic of China. 

China has become South Africa’s single largest trading partner in the world and South Africa has become China’s largest trading partner in Africa. China regards South Africa as a key partner in advancing its relations with the African continent.

Growing trade links

Also speaking at the briefing, Trade and Industry Minister Rob Davies said total trade experienced an upward trajectory since 2008, growing from R121 billion to R271 billion by the end of last year.

“However, the trade balance has been in favour of China since 2008 due to the composition of trade between the two countries where South Africa exports primary products and commodities to China,” said Minister Davies.

This was of concern to South Africa, with measures underway to increase South African exports of manufactured goods to China.

“There is a structural imbalance,” said Minister Davies.

To this end, exhibitions of value-added goods have been held in China (SA Expos in China).

“We also agreed that there should be procurement missions coming to South Africa targeting the acquisition of value added products. We see value in enhancing the relationship with China and we will continue to work together,” said the Minister.

To date, there are 39 Chinese companies investing in South Africa with a capital expenditure of R14.7 billion between January and September 2014.

Chinese investments are mainly in automotive, metals, building and construction sectors.

Meanwhile, 11 South African companies are investing in China with a capital expenditure of R51.8 billion between January 2003 and September 2014. These companies are in a range of sectors of consumer products, minerals, business services and industrial machinery among others.

A South Africa–China Business Forum will be held on 5 December with approximately 100 South African companies operating in several sectors like finance and infrastructure.

Expanding scope of cooperation

The visit follows on the heels of the dti’s annual Expos in China.

The State visit will also see several government-to-government Memoranda of Understanding (MoUs) being signed, as well as several other commercial MoUs. These will focus on media, banking and technology.

“The signing will strengthen the trade and investment bilateral relationship between South Africa and China,” said Minister Davies.

On the issue of cheap imports, the Minister said there was an “unfortunate current account deficit on the balance of trade”.

“It has been narrowing but it is there and it means that there are many consumer goods that are coming into this country from all parts of the world that are replacing products that could be made in South Africa.

“If we raise tariffs, we would create space for local manufacturing. We have raised tariffs in some areas and we have strengthened the role of bodies dealing with technical infrastructure to set minimum standards for the entry of goods into South Africa to defend our markets and consumers against unsafe products.

“The message that South Africa wants to put forth is that South Africa is open for business but that it prefers to have international companies set up plants in South Africa. We will work with you and we will support you,” said Minister Davies.

The delegation to China will also comprise Minister Davies and Minister of Finance Nhlanhla Nene and Transport Minister Dipuo Peters, among others. -