SA, China firms agree R27bn deal

CHINESE companies signed 87 deals with South African entrepreneurs yesterday in a trade agreement worth R27 billion.

The CTICC hosted representatives from 40 Chinese companies which signed deals with local businesses to promote diplomatic and economic ties between the two countries.

According to Brand South Africa, 90 local entrepreneurs benefited from the signing.

Minister of Trade and Industry Ebrahim Patel said the value of the deals was R27bn. “This is the State of the Nation Address in action,” Patel added.

These deals follow an agreement reached between President Cyril Ramaphosa and Chinese president Xi Jinping during last year’s Forum on China-Africa Co-operation (Focac).

“Over the past 10 years, China has been South Africa’s largest trading partner, while South Africa, on the other hand, is China’s largest trading partner in Africa,” said Dr Ayanda Vilakazi, analyst for the Coega Development Corporation.

“In 2018, two-way trade between the countries totalled approximately R627bn – a 27-fold increase since the establishment of diplomatic ties between South Africa and China.”

Vilakazi said it has been estimated that more than 400 000 jobs had been created for South Africans thanks to Chinese investment.

“In general, Focac has been designed to reduce costs on the one hand and increase the volume of trade between SA and China. It will also stimulate infrastructure development and support Africa in terms of regional and continental integration,” he said.

“In short, these co-operation agreements will solidify and deepen trade and economic relations between our two countries.”

Vilakazi said factors such as affordable labour, political stability and ease of cross-border trade all contribute towards making South Africa an attractive option for Chinese investment.

“In particular, South Africa’s special economic zones along the Indian Ocean coast are prime locations for Chinese foreign direct investment, and economic and industrial activity because of their proximity to the Belt and Road Initiative corridors.

“They provide access to China’s 21st century maritime ‘silk’ road comprising with an emphasis on Africa, and access to the markets of Eurasia through the Middle East,” Vilakazi said. |