South Africa would like to see more local companies expand into China. More than 60 South African companies had travelled to China in 2014 to engage with the country and collaborate on joint opportunities, Deputy President Cyril Ramaphosa said last week.

“South African companies are focusing their efforts on emerging economies for new opportunities, and access to the Chinese market is at the heart of their strategy,” he said, speaking at the China-South Africa Business Forum held in Beijing, China, on 15 July.

“The recent expansion of Distell, a South Africa wine distributor, into China creates an opportunity to accelerate the excellent progress achieved so far, and build on its existing presence into this lucrative market.

“We would like to see more South African companies expand into China and the South African expos in China provided a good platform to achieve this objective,” Ramaphosa said.

Value-added exports

He commended the commitment made by China to re-balance the nature of Africa’s burgeoning trade ties with China so that these would be sustainable over the long term.

South Africa and Africa had to ensure structural transformation of their trade with China, to enable China to import more value-added and labour intensive products, and to move away from their dependence on raw materials exports.

“The expos proved that South Africa was not just about resources, and that we have many products and services to offer by way of value-added, labour intensive and technologically advanced products,” Ramaphosa said.

“We are encouraged by the prospect that Chinese enterprises are increasing their investment in the South African manufacturing industries, in order to promote beneficiation of minerals at source.”

Local beneficiation

The recent announcement of Chinese financing for local beneficiation through the development of a metallurgical complex in Musina, was part of a new trend aimed at employment generating investment for South Africans.

He said this seemed to be echoed in the expansion of Hisense and the FAW automotive manufacturing plants, discussions for the revival of the Coega Industrial Development Zone and even a prospective mixed-use residential, retail and light- industry facility east of Johannesburg.

“For South Africa, the hosting of the sixth Forum for China-Africa Co-operation (FOCAC) in 2015 promises to be a major event on the diplomatic calendar… The FOCAC process, which is a tri-annual meeting and now formally includes the African Union, provides an opportunity for leaders to highlight the areas of co-operation and growth in China’s relationship with Africa.”

South Africa also saw China as a vehicle to drive the African agenda of continental growth and development. South Africa chaired the African Union Commission, he said, and it was committed to initiatives that grew the African continent and improved intra-African trade.

“China has consistently doubled its financing commitment to Africa during the past three FOCAC meetings – from $5-billion [about R62-billion] in 2006 to $10-billion in 2009 and $20-billion in 2012. The announcement that China would finance and construct a railway link between Nairobi and the port of Mombasa, with possibility of extended routes to Rwanda, Uganda, Burundi and South Sudan, is seen in this light.”

Investment invitation

Ramaphosa invited the Chinese business community to invest in South Africa, especially in the special economic zones focused on the 10 investment projects on which the respective governments had agreed.

“Both of our governments have agreed that we need to change the structure of trade away from commodity-based trade, to trade in more value-added products emanating from South Africa. To this end we have presented the Chinese government with a list of 10 value-added products which we would like to see incorporated into your supply chains.

“We have already benefitted from skills and technology transfer and would like to encourage the Chinese government to continue to support us, as we work towards closing our skills gap,” he said.

China was a 21st century partner for development and a unique catalyst for growth on the African continent. He said South Africa would like to partner with China to ensure that the economic engagement was mutually beneficial, continued to lead to infrastructure development, greater economic participation and the greater good of both countries.