STATEMENT BY THE MINISTER OF TRADE AND INDUSTRY DR ROB DAVIES ON THE OUTGOING STATE VISIT BY PRESIDENT ZUMA TO THE PEOPLE’S REPUBLIC OF CHINA

STATEMENT BY THE MINISTER OF TRADE AND INDUSTRY DR ROB DAVIES ON THE OUTGOING STATE VISIT BY PRESIDENT ZUMA TO THE PEOPLE’S REPUBLIC OF CHINA

The President of the Republic of South Africa Mr Jacob Zuma and the President of the People’s Republic of China Mr Xi Jingpin will meet next month in Beijing, China, and exchange views strengthening bilateral trade and investment relations between the two countries.

The total trade between South Africa and China experienced an upward trajectory since 2008, growing from R121 billion to R271 billion by the end of 2013. Since 2009, China has been our number one trading partner globally and in Asia. However, 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, whilst importing manufactured and high-tech products from China. The composition of trade remains a concern for South Africa and there are measures underway to increase South Africa’s exports of manufactured products to China, such as the SA expo in China held annually since 2011. China has also undertaken to support South African initiatives aimed at promoting value-added products in China, including encouraging procurement missions to visit South Africa and source value added products starting from 2015.

With regard to investment, a total of 11 South African companies are investing in China with a capital expenditure of R51.8 billion between January 2003 and September 2014, and are investing in a range of sectors such as consumer products, industrial machinery, minerals, business services, chemicals to name but a few. A total of 39 Chinese companies are investing in South Africa with a capital expenditure of R14.7 billion between January 2003 and September 2014.  Chinese investments are mainly in automotive (FAW), metals (Sinosteel), building and construction sectors (Jingdong). China is also considering investing in processing of agricultural products (i.e. macadamia nuts and soya beans).

South Africa sees value in enhancing its relations with China so as to take advantage of new trade and investment opportunities in rapidly growing emerging markets. The two countries continue to work together to further South-to-South cooperation and tackle global challenges both within BRICS and on the multilateral front.

On Human Resource Development, China will continue to provide capacity building to South African experts in the field of Special Economic Zones (SEZs), Clothing and Textiles, and young entrepreneurs.

A South Africa-China Business Forum be held on 5 December 2014. Approximately 100 South African companies operating in sectors such as finance, infrastructure, energy, manufacturing and mining and capital equipment will participate. Approximately 150 Chinese enterprises will attend the Business Forum. The Business Forum will be utilised as a platform for engagement between the South African and Chinese business entities to deliberate on issues related to cooperation in the following sectors: finance, energy, manufacturing and mining and capital equipment. The expectation is that numerous deals concluded as a result of the interaction at the afore-mentioned platform.

The State Visit is taking place after the dti organised our yearly South Africa Expos in China last month in Hong Kong, Shenzhen, Chengdu, Shanghai and Beijing. The Expos are amongst others aimed to:

•            Raise the profile of and improve an understanding and appreciation of South Africa in China;

•            Establish balanced bilateral trade and investment flows;

•            Cultivate an environment that creates multi-sectoral relations towards realizing our goals identified in our bilateral agreements; and

•            Promote engagements with Two-Tier provinces with the aim of enhancing economic growth.

In order to successfully achieve this task, we organised more than 50 South African companies in the Mining and Metals beneficiation, Capital equipment, ICT & Electronics, Agro-processing and Automotives and components to participate in the exhibitions. The event also aimed to attract foreign direct investment in the following sectors: Mining and beneficiation, renewable energy, Infrastructure, Oil and gas, ICT and Electronics, Capital projects, Transport as well as Agro processing.

According to report back questionnaires received from participants, on the spot export sales generated at the event were approximately R1.2 million. Collective expected future sales as a result of participation and trade leads are expected to surpass R380 million. Trade leads received by participants during the Showcase were 330.

Beside government to government MoUs, several commercial MoUs are expected to be signed at the Business Forum focusing amongst others on media, banking, and technology. The signing of the agreements will strengthen the trade and investment bilateral relationship between South Africa and the People’s Republic of China.