South Africa, China ink trade deals

19 November 2010

South Africa and China inked a series of trade and energy deals during a bilateral trade commission co-chaired by visiting Chinese Vice-President Xi Jinping and South African Deputy President Kgalema Motlanthe in Cape Town on Wednesday.

The success of South Africa’s new growth path required the support of partners such as China, Motlanthe told reporters. “We see the future destiny of our two countries as inextricably linked with the African continent.”

Xi, who is expected to be China’s next president, is on a three-day tour of South Africa to secure mineral rights and boost trade relations.

SA’s largest export destination

China, which last year overtook the United States to become South Africa’s largest export destination, mainly imports raw materials such as iron ore, as well as refined iron and steel, from SA in order to to fuel its booming economy.

Trade between the two countries last year totalled about US$16-billion. But the relationship was uneven, with South Africa posting a trade deficit of $2.7-billion with China.

In August, South African President Jacob Zuma visited Beijing, signing a slate of cooperation deals on mineral resources, investment in railways, power transmission, construction, mining and nuclear power.

‘Second scramble for Africa’

China has assembled an expansive investment portfolio in southern Africa, particularly in Zambia, Angola and Zimbabwe.

Xi is also expected travel to oil-rich Angola and Botswana in visits seen as securing China’s energy and resource deals there.

China has unveiled billions of dollars in loans and investment to African governments, which analysts have described as the second scramble for African resources after Western colonisation.

South Africa has lobbied extensively to join China in the BRIC group of countries, a coalition of emerging economies that also includes Brazil, Russia and India.

The countries are not officially linked, but hold summits in an effort to bolster economic cooperation among them.

Sapa