South Africa was ”aggressively” seeking greater investment from China, despite local fears of foreign competition. ”We want greater investment in South Africa,” Deputy Foreign Minister Aziz Pahad said.
He told reporters in Pretoria that what South Africa would lose in certain sectors — such as textiles and clothing — it would gain in others, such as mining, tourism and energy.
”China is developing into a major economic superpower and we need to take advantage of that,” Pahad said.
But the clothing and textiles industries, and trade unions, have asked government for protection against cheap Chinese imports.
Finance Weekly reported that clothing imports had increased from 11-million units in 2003 to 213-million units in 2003. These imports were blamed for employment in the clothing business dropping from 150 000 to 125 000 employees in 18 months.
On the flip side, Pahad argued that many South African companies were making huge investments into China.
The Chinese ambassador to South Africa, Liu Gui Jin, said Sasol was about to begin a feasibility study for two $3-billion projects in China with a consortium of six Chinese companies.
The projects involve extracting oil from coal, Sasol’s speciality.
”China has plenty of coal but imports 100-million tons of crude oil a year and are looking at South African investment and expertise to reduce this amount,” Jin said.
Since beginning economic reforms in 1978, China has become one of the world’s fastest growing economies. Over the past 10 years its gross domestic product has grown at an average annual rate of nearly 10 percent.
This growth have benefited South Africa, Jin said, noting that iron ore exports from Kumba in the first four months of this year had increased by 158% over the same period last year.
According to Chinese customs figures, South African exports to China in 1998 amounted $690-million. By the end of 2003 this had grown by 23% to $1,840-million.
”This is South Africa’s biggest increase to any one country,” he said.
Diplomatic relations were established in 1998 and South Africa was now China’s largest trading partner in Africa.
Jin said South Africa became an ”approved destination for private tourists” last year.
Bilateral trade in the first quarter of this year amounted to $1,67-billion, an increase of 66,6% from the same period in 2003.
”When other export markets like the United Kingdom dropped in 2003 by nine percent, South Africa’s exports to China rose by 42%,” Jin said, adding that any future agreements would be mutually beneficial and far outweigh any negative impact Chinese imports had on certain sectors.
”And those sectors we can sit down and talk about and I am sure we will find a solution,” he said.
Pahad said it was also crucial that Chinese development programmes become actively involved in the New Partnership for African Development. There are currently 577 Chinese companies operating in 49 African countries.
Deputy President Jacob Zuma will meet his Chinese counterpart, Zeng Qinghong, in Pretoria on Tuesday. Agreements on education, grant aid and commercial co-operation will be signed. – Sapa