SA, China in R2.3 billion trade agreement

Wednesday, March 31, 2010

Pretoria - South Africa and China have signed trade contracts for products such as wine, frozen fish abalone and chrome oil worth R2.3 billion.

"This signing ceremony will mark the deepening of mutually beneficial economic relations between our two nations," Trade and Industry Minister Rob Davies said on Thursday.

The minister noted that the latest contracts between China and South Africa have more than doubled since the last signing of contracts in 2007. The total value of contracts signed then amounted to R143 million.

Davis said government viewed its relations with China, which is now South Africa's first trading partner following countries like the United States, as strategic.

He said that China is at the top of a seismic shift in the world economy. "We enjoy excellent relations, at a political and people-to-people level," said the minister.

South Africa and China established diplomatic relations in 1998 and in 2008 China was South Africa's fourth largest trading partner and is now its biggest trading partner.

The South African government however believes that there is room to increase the volume of agreements. Davies said however said China is the home of a number of original equipment manufactures in the automotive industry that have set up in South Africa bases for exports.

"We would like to develop this export platform model also to include exports of vehicles on to the Chinese market," he said.

Additionally South Africa would welcome further investment from China.

South Africa exports minerals to China as well as wine while China exports mostly electronic products to South Africa. Although South Africa (contributing 25 percent to the continent's Gross Domestic Product) is a small market there is talk of expanding the market size into the region

Chairman of the National Committee of the Chinese People's Political Consultative Conference Jia Qinglin said South Africa is an important emerging economy adding that the two nations should further open markets between each other as well as deepen their mutual investments.

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