It is a great honour for me to address you on the occasion of the SA-China Business Council Forum in China. This year marks the fourth anniversary of the signing of the Beijing Declaration between China and South Africa. Our ambition is to consolidate what we have achieved in the areas of people to people and trade.
Last year, we celebrated the very successful South Africa Year in China and this year marks the Year of China in South Africa. These have served the purpose of promoting cultural ties between our people, a critical requirement for enhanced business and trade relations.
We also meet on a high note, given the success of last year’s visit by President Jacob Zuma to your country and the progress made with the implementation of the Comprehensive Strategic Partnership through the Bi-national Commission and the Inter-ministerial Joint Working Group established recently.
We want to express our appreciation for the commitments made by the Chinese government through the Comprehensive Strategic Partnership Agreement (CSPA) signed between South Africa and China, where it was agreed that Chinese enterprises would be encouraged to procure more value-added products from South Africa.
In the midst of the ongoing global economic slowdown, South African companies are focusing their efforts on emerging economies for new opportunities and access to the Chinese market is at the heart of this strategy.
The recent expansion of Distell, a South African wine distributor, into China creates an opportunity to accelerate the excellent progress achieved so far and build on its existing presence into this lucrative market. We would like to see more South African companies expand into China and the South African expos in China provided a good platform to achieve this objective. Over 60 companies travelled here last year to engage with China and collaborate on joint opportunities.
We would like to commend the commitment made by China to rebalance the nature of Africa’s burgeoning trade ties with China so that it will be sustainable over the long term. South Africa and Africa have to ensure structural transformation of our trade with China, to enable China to import more value-added and labour-intensive products, and to move away from the dependence on raw materials exports. The expos proved that South Africa is not just about resources, and that we have many products and services to offer by way of value-added, labour-intensive and technologically advanced products.
We are encouraged by the prospect that Chinese enterprises are increasing their investment in the South African manufacturing industries to promote beneficiation of minerals at source. We have already witnessed a significant increase in investment from your country since the signing of the Beijing Declaration in 2010.
With last year’s visit, we took our co-operation further and signed the five-to-10-year Framework on Co-operation to further enhance the implementation of the outcomes of the Bi-National Commission and the Inter-ministerial Joint Working Group.
The recent announcement of Chinese financing for local beneficiation through the development of a metallurgical complex in Musina is part of a new trend aimed at employment generating investment for South Africans.
This seems to be echoed in the expansion of Hisense and the FAW automotive manufacturing plants, discussions for the revival of the Coega Industrial Development Zone and even a prospective mixed-use residential, retail and light-industry facility east of Johannesburg.
For South Africa, the hosting of the sixth Forum for China-Africa Co-operation (Focac) in 2015 promises to be a major event on the diplomatic calendar. The Focac process, which is a tri-annual meeting and now formally includes the African Union, provides an opportunity for leaders to highlight the areas of co-operation and growth in China’s relationship with Africa. With the expansion of the Focac agenda from its primary focus on economic development to also include a partnership in peace and security, the Focac VI meeting is set to demonstrate how co-operation is evolving to encompass new areas of mutual concern. Hence, South Africa sees China as a vehicle to drive the African agenda of continental growth and development. South Africa chairs the African Union Commission, and is committed to initiatives that grow the African continent, and improve intra-African trade.
China has consistently doubled its financing commitment to Africa during the past three Focac meetings – from $5 billion (R62 billion) in 2006 to $10bn in 2009 and $20bn in 2012.
During his May 2014 visit to Africa, Chinese Premier Li Keqiang enthusiastically promoted major projects such as the “461 framework” on China-Africa economic co-operation and the “three networks” (the high-speed rail network, the highway network and the regional aviation network).
The announcement that China would finance and construct a railway link between Nairobi and the port of Mombasa (with the possibility of extended routes to Rwanda, Uganda, Burundi and South Sudan) is seen in this light. These developments also align with President Xi Jinping’s articulation of a new “Maritime Silk Road” between China, the Indian Ocean rim and the African eastern seaboard countries.
In line with our ambition to reindustrialise South Africa, the South African government has adopted the National Development Plan (NDP), vision 2030, which has been translated into a five-year plan with the objective of dealing with the triple challenges of poverty, unemployment and inequality. The NDP aims to unlock the institutional, human and structural impediments to higher growth in South Africa. It offers a framework to faster growth and transformation.
The manufacturing sector remains critical to the objectives set out in the NDP because evidence from all successful industrialisers demonstrates that manufacturing plays a critical role in ensuring sustainable economic growth. The NDP is based on the principles of innovation-led growth and clearly identifies the quality of education, to support skills development, and encourages innovation which is key to our economic development.
China has developed significant competencies in the area of R&D and innovation, with about 300 000 patent applications registered annually, and our companies would like to collaborate with their counterparts in China on mutually beneficial projects.
Our National System of Innovation, comprising our universities, science councils, public and private research institutions and supporting organisations, including agencies of government, private and public funding agencies, SMEs and large, leading and dynamic companies, all have a critical collaborative role to play in improving South Africa’s global competitiveness.
A key priority for South Africa is to diversify our economy away from a strong reliance on resource extraction. South Africa also has advanced capabilities and is globally competitive in many areas of manufacturing, including mining and transport capital equipment production.
We would like to grow and expand our global participation in these sectors and supply chains through potential partnerships and collaboration. To this end, we have decided to expand South Africa’s Special Economic Zones Programme, which will exclusively focus on the beneficiation and value addition of South Africa’s natural resources. These zones will offer a suite of incentives ranging from tax allowances, employment incentives and a Customs Controlled Area.
We are actively driving Africa’s regional integration efforts, including developing continental north-south rail and road links, expanding ports, energy capacity and skills.
South Africa is in a unique position to champion Africa’s developmental agenda, wearing both hats of being the chair of the African Union Commission, as well as the host of the Brics summit. We are encouraged by the recent launch of the Brics Bank to be hosted in China, with its regional office based in South Africa. The Brics Bank will serve as a catalyst for development and support our efforts to address the infrastructure financing deficit in Africa and other developing countries.
China is a 21st-century partner for development and a unique catalyst for growth on the African continent. South Africa would like to partner with China to ensure that China’s economic engagement is mutually beneficial, continues to lead to infrastructure development, greater economic participation and the greater good of both our countries.
I thank you.