President Jacob Zuma and Chinese President Xi Jinping attend a signing ceremony at the Great Hall of the People in Beijing, China. Picture: Wang Zhao
President Jacob Zuma and Chinese President Xi Jinping attend a signing ceremony at the Great Hall of the People in Beijing, China. Picture: Wang Zhao

Why China is important to SA

Time of article published Dec 11, 2014

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South Africa sees its ties with China as a partnership which is aligned to the country’s development goals, says Jeff Radebe.

It took many by surprise when China became Africa’s largest trading partner in 2009, surpassing the US. Since then, China’s growing presence in Africa has become a subject of discussion, especially among the foreign press.

Everyone, from analysts to politicians and ordinary people on the street, suddenly had a view on the Chinese.

China’s rapid rise as an influential player in Africa has led many to question the nature of its involvement in the continent. Many questioned the intentions of the Chinese while some even went as far as ridiculing products offered to Africans by China as “fong kong”.

Some became suspicious when the Chinese started to build roads, dams, stadiums and hotels in Africa. They asked, what does China want in return?

Of course, as it invests in Africa, China is taking advantage of the continent’s rich natural resources to meet the growing needs of its people.

By last year, China recorded nearly R2.2 trillion in trade flows in Africa, making it clear that they want to become the most influential foreign power in Africa. China’s total trade with South Africa increased from approximately R190 billion to R270bn last year and is rapidly approaching R300bn.

It is for this reason that President Jacob Zuma’s recent visit to China was viewed with keen interest. The state visit to China by our president reinforced the close ties shared between China and South Africa and highlighted the depth of our relations, not only in the political realm of Brics – the grouping of five major emerging national economies: Brazil, Russia, India, China, and South Africa, but also in business, agriculture, tourism, cultural exchanges, academic co-operation and scientific research.

South Africa doesn’t see its relationship with China as just based on trade, but a partnership rather that is aligned to our development goals. China, on the other hand, regards South Africa as a key partner in advancing its relations with the African continent.

This is seen in the context of investments the Chinese have made in South Africa over the last few years and the value such investments have had on our economy. Our relations with China have reached new heights. In the short space of 15 years. It's hard to believe that bilateral trade volume was approximately R12bn when the diplomatic relationship was first established.

In 2012, the figure reached nearly R660bn, which means a 40-fold increase in the past 15 years. Subsequently, this has made China South Africa’s largest trading partner, largest export market and largest source of imports for the past four years. Between January 2003 and January this year, a total of 38 foreign direct investment projects were recorded representing a total capital investment of R13.33bn, or an average investment of R350.5 million for each project from China.

Chinese investments in South Africa have contributed to job creation. During the period, 11 000 jobs were created.

This year, the Chinese went a step further in investing in our economy when automobile manufacturer First Automobile Works (FAW) invested R1.1bn to build a vehicle assembly plant in Coega in the Eastern Cape, which is expected produce up to 35 000 passenger vehicles in the coming years.

Last year, technology producer Hisense opened a factory in Atlantis, north of Cape Town, employing 300 South Africans in the production of goods for export to the broader African market. Cement producer Jidong Development Group and the China-Africa Development Fund agreed to establish a R1.8bn cement plant in Limpopo, with a projected production rate of one million tons.

As we review the status of our bilateral relations with China, we aim to ensure that the excellent growth path we have defined is strengthened with our focus on the issues of development in South Africa and Africa generally.

South Africa and China are positioning our nations as countries that are open for business. This is crucial to ensuring that we deliver on our domestic imperatives which include economic growth, development and job creation.

We will recall that during President Xi Jinping’s state visit to South Africa earlier this year, the two governments agreed to designate 2014 as the “Year of South Africa” in China, and 2015 as the “Year of China” in South Africa. The “Year of South Africa in China” coincides with South Africa’s celebration of 20 years of Freedom.

The aim of the “Year of South Africa” in China is to profile South Africa’s economic, political and cultural achievements since the end of apartheid. It will also seek to explore more business and developmental opportunities, demonstrate South Africa’s innovations and best practices in areas such as science and technology, fashion, mining, arts, culture, tourism and greater people-to-people interaction.

* Jeff Radebe is Minister in the Presidency.

** The views expressed here are not necessarily those of Independent Media.

The Star

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