China commits to more investments in South Africa
Addressing the media during the briefing of Chinese President Xi Jinping’s state visit held today in Pretoria, President Cyril Ramaphosa announced China had committed to $14.7-billion in investments.
The two presidents engaged in a bilateral discussion to discuss a number of issues relating to South Africa’s relations with China. Ramaphosa said that Xi Jinping’s visit to South Africa formed part of several other activities that the two will jointly undertake during the course of this year to celebrate their 20th anniversary in diplomatic relations.
“The purpose of our meeting has been to review and strengthen our long lasting friendship, which has roots in the bonds of solidarity that developed between our people during our struggle for liberation”.
Ramaphosa also announced China’s commitment of $14.7-billion in investments and said that South Africa’s biggest trading partner was ready to invest and work with South Africa in sectors such as oceans and green economy, science and technology, agriculture, environment and finance.
Ministers, heads of state-owned entities and development institutions of South Africa and China signed memorandums of understanding (MOU) to deepen relations in departments such as international relations, trade and industry, home affairs and agriculture.
Two of the MOUs signed are intended to improve issues such as trade and simplification of visas between the two countries.
Power utility Eskom received a $2.5-billion loan to fund its Kusile power station from the China Development Bank and state transport agency Transnet also received an undisclosed loan from the Commercial Bank of China.
Chief executive of Eskom Phakamani Hadebe told the Mail & Guardian the loan will increase Eskom’s funding level from 62% to 68% for the current financial year. “At the beginning of the year, we indicated that we needed to borrow R72-billion to operate efficiently, since January we have raised R57-billion and we are in a better position than before”, Phakamani said.
Other investments include a $10-billion investment from Chinese automaker Beijing Automotive Industry Company (BAIC) which will go towards expanding its plant based in Coega, Port Elizabeth as well as the expansion of television maker Hisense’s plant.
The BAIC investment was signed in 2015 and will be rolling out its first model today. Ramaphosa participated in the launch of the plant over a video conference on Tuesday afternoon.
Minister of Trade and Industry, Rob Davies in an interview, told the M&G that the Chinese announcement will boost investments growth in South Africa. “What is important about Chinese investments is that they are reliable and they happen,” said Davies.
Davies also noted that to date South Africa has seen $11-billion of investments from China over 77 projects. He also said that South Africa invests more in China than how much China has invested in the country. “This has led me to argue in the BRICS business council that what we need is supporting investment-led trade and not trade and investment in order to create long-term trading relations”.
China also took the opportunity to congratulate South Africa on being appointed as a non-permanent member of the United Nations security council. “We support South Africa in playing a bigger role in the affairs of the continent and international stage”, said President Jinping. South Africa was voted onto the UN security council in June this year.
Xi Jinping has invited South Africa for a state visit, and he said Ramaphosa has agreed. Ramaphosa and Xi Jinping will co-chair the Beijing summit for China and South Africa forum in September which will focus on China-Africa cooperation in the new era.