Reviewing bilateral relations | Infrastructure news

President Zuma’s state visit to China on December 4 and 5 will focus on the priority issues of development in both South Africa and the rest of the continent.

Bilateral relations will also be reviewed ensuring that the existing strategic relationship is further strengthened.

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.

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

Total trade with China has experienced an upward trajectory since 2008, growing from R121 billion to R271 billion by the end of last year.
According to Dr Rob Davis, Minister of Trade and Industry 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.

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,” adds Minister Davies.

Currently 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 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.

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