12 September 2013
South Africa is looking to foster a more balanced and sustainable trade relationship with China, Deputy Trade and Industry Minister Elizabeth Thabethe said at the opening of the last in a series of three South African expos in Beijing on Thursday.
The expo, taking place at the Beijing Exhibition Centre, is showcasing South Africa’s top 10 value-added products and services for export to China, as well as the country’s top 10 investment areas, including agro-processing, chemicals, and automotive steel and aluminium.
A total of 63 South African companies have been taking part in the expos, which began in Xiamen earlier this week before moving to Shanghai and now to Beijing.
China is South Africa’s largest trading partner from both the import and export perspective, with South Africa’s exports to China increasing from R6.4-billion in 2004 to just over R81-billion in 2012, while South Africa’s imports from China grew to R120-billion in 2012.
South Africa places emphasis on value-added trade, as opposed to the country being merely the source of raw materials. Chinese investments have been mainly focused on metals, followed by chemicals, food and tobacco, consumer electronics and automotives.
“We are slowly seeing a shift in our export structure, and although the value of exports to China is still negligible, we believe that over time, the patterns of trade will evolve,” said Thabethe.
She said South Africa was looking forward to China buying “made in Africa” products coming out of a future trilateral free trade area covering 26 countries in southern, eastern and central Africa.
The free trade area – currently being worked on by the East African Community (EAC), Common Market for Eastern and Central Africa (Comesa) and Southern African Development Community (SADC) – “will effectively expand South Africa’s market from 50-million to 600-million, placing us in a similar category in terms of market size as our BRICS partners,” Thabethe said.
Jiachang Cao, the deputy director-general in China’s ministry of commerce, told a a business seminar held at the expo on Thursday that China saw South Africa as an important and strategic trade partner, and was looking to deepen relations between the two countries.
The Chinese government was also supportive of development in the country and on the continent, Jiachang said, and was encouraging businesses to invest in South Africa.
Chinese companies already doing business in South Africa include Baosteel Resources SA, Sanyu Southern Africa and PMG Mining.
Thabethe, also addressing the seminar, said South Africa was ideally positioned for access to the Southern African Development Community (SADC), with its combined market of over 250-million people.
She added that the South African government was on an infrastructure drive which would see it investing R827-billion in building and upgrading infrastructure over the next three years.
In 2012, Chinese companies completed construction contracts in Africa worth US$40.83-billion, an increase of 45% over 2009.