China's R196bn investment to cover many sectors in SA
Brics / 25 July 2018, 08:00am / Shannon Ebrahim, Group Foreign Editor
South Africa’s biggest trading partner China is to invest a further $14.7 billion (R196bn) in the country.
This was announced as People’s Republic of China President Xi Jinping, began his third state visit on Tuesday.
“I have full confidence in our friendship - we are friends, partners, comrades and brothers,” Xi told government ministers, officials, business executives and the media in a private ceremony on the lawns of the Union Buildings.
“We support the South African government in achieving its development agenda,” Xi said after witnessing the signing of a series of co-operation agreements between the two countries.
President Cyril Ramaphosa hailed the strength of the comprehensive strategic partnership between the two countries as an important platform for engagement.
“$14.7 billion (more than R196bn) in investment agreements have been struck in the areas of infrastructure, ocean economy, science and technology, the environment and finance,” Ramaphosa announced.
Agreements were signed between the ministries of trade and industry, agriculture and fisheries, science and technology, as well as between the Department of International Relations and the Chinese ministry of international development.
Other major agreements were signed between Eskom and the China Development Bank, Transnet and the Industrial Commercial Bank of China.
Agreements were also signed on financing and the development of small and medium enterprises.
A massive coup for South Africa was the commercial loan for Eskom from the China Development Bank of $2.5bn towards the financing of the Kusile coal-fired power station.
Eskom’s treasurer André Pillay was beaming following the announcement, “we need to raise R72bn this year, and this new loan ensures that we have now raised 62% of that”.
The 15-year loan is guaranteed by the government and is part of a $5bn framework.
Another major achievement was the launch of the Beijing Automotive Group (BAIC) vehicle manufacturing plant in Port Elizabeth on Tuesday.
This is the first new car plant to be built in South Africa in 40 years, and is expected to build 50 000 vehicles a year by 2022.
BAIC is the major shareholder with 65%, and the Industrial Development Corporation holds the remaining 35%.
Two-thirds of the plant’s production is earmarked for the export market and will include passenger cars, sport utility vehicles, light commercial vehicles and pick-ups.
BAIC has set a target of 60% local content for the vehicles to roll off the Coega assembly line, and the project aims to create more than 800 direct jobs.
One of the keystones of the project is to include the community of Nelson Mandela Bay and the surrounding areas.
“This project was announced during the previous state visit of President Xi, and the fact that the first vehicle models are coming out today shows that Chinese investments are reliable and will happen,” Minister of Trade and Industry Rob Davies said on Tuesday.
“Hisense television and household appliances will also expand their plant, and according to its executives the South African Hisense plant is the second best performing plant outside of China.
“This shows that South Africa offers good investment opportunities,” Davies noted.
According to the minister, South Africa needs to support investment-led trade in order to develop significant manufacturers that will contribute to more sustainable trade relations.
“We are very pleased that President Xi has agreed to send more buying missions to South Africa for value-added products,” Davies told Independent Media.
Xi articulated his firm belief in South Africa’s potential when he said: “China and South Africa are developing newly emerging markets with important influence, and China supports South Africa playing a bigger role on the continent and the global stage.”