SA reaps rewards of China trade deals

SOUTH Africa’s economy is on a more solid footing thanks to soaring trade with China, Reserve Bank deputy governor Daniel Mminele said this week.

Speaking at the inaugural South Africa-China Capital Market Forum conference on Wednesday, Mminele said that in the 15 years since official relations were established between the two countries, there had been a sharp increase in foreign direct investment and a surge in bilateral trade.

“China became South Africa’s biggest trading partner in 2009, and is now the largest destination for South Africa’s exports. With respect to foreign direct investment, China is actively involved in mining, manufacturing and construction. Its foreign direct investment presence had grown from about R340-million in 2005 to about R50-billion in 2012,” said Mminele.

It was disclosed at the conference that after South Africa’s invitation to the Brics group the Reserve Bank and the People’s Bank of China signed an agency agreement enabling the Bank to invest in China’s interbank bond market through the People’s Bank of China.

“South Africa was the first country on the continent to be given access to the Chinese onshore bond market in this way,” said Mminele.

“As part of the growing importance of trade between our countries, this represents an opportunity to diversify foreign exchange reserves and to invest in the world’s fifthlargest bond market,” he said.