South Africa and China Embraces A Beneficial Partnership
This year marks the centenary of the great leader of the South African and African people, and the world at large, Nelson Mandela. This year also marks the 20th anniversary of China-South Africa diplomatic ties.
Twenty years ago, then president Nelson Mandela made the political decision for South Africa to establish diplomatic relations with the People’s Republic of China.
With joint efforts, the relations realised a triple jump from a partnership to a strategic partnership, and now to comprehensive strategic partnership. In the process, a tremendous amount of tangible benefits have been delivered to both peoples.
Today, the China-SA relationship has gained growing strategic and global significance.
China is a reliable, productive and beneficial partner to South Africa. Over the years, a multi-layered, wide-ranging and all-dimensional co-operation framework between China and South Africa has taken shape. China-SA relations have become a role model for China’s co-operation with other African and developing countries.
The fruitful, productive co-operation was under the framework of three major platforms, namely the Forum on China-Africa Co-operation (Focac), Brics, and the Belt and Road Initiative (BRI), of which South Africa has established itself as both a major contributor and the biggest beneficiary across the continent.
In mutually beneficial and win-win co-operation, China has for nine years in a row been South Africa’s largest trading partner.
In 2017 bilateral trade grew by 11.7% to $39.17billion, a more than 20-fold increase from the figure at the beginning of diplomatic relations.
South Africa has been China’s largest trading partner in Africa for eight consecutive years, accounting for a quarter to a third of China-Africa overall trade.
Export of South African agricultural products such as wine, rooibos tea and apples are trending upward fast. In September 2017, South Africa became the first African country to export beef to China.
China has become a major investment partner to South Africa for stimulating economic and social transformation and development. South Africa is the top destination of Chinese investment in Africa.
Combined existing and planned direct investment from China to South Africa reached over $25bn in accumulative terms by June 2017 in manufacturing, processing, mining, finance, energy, tourism, commerce, trade, and services.
South Africa is now China’s largest investment destination among African countries.
Incomplete statistics show more than 180 major Chinese enterprises and thousands of Chinese small and medium enterprises have established business in South Africa, creating thousands of jobs for South Africans.
Thousands of Chinese investors, big or small, made their due contributions, be it millions of US dollars of taxes or billions of US dollars of foreign reserve earnings. There are plenty of examples.
The Hisense appliances manufacturing base in South Africa produces 400000 refrigerators and televisions a year, accounting for the largest and second largest market share in South Africa. Hisense has created 700 direct and 2000 indirect jobs for local people.
The Coega Plant of FAW Vehicle Manufacturers SA (Pty) Ltd manufactured 1200 vehicles and employed 230 local workers in 2016.
This year will also see the launch of the production line of the Beijing Automobile International Corporation (BAIC) in South Africa, with a total investment of nearly $800million. The Chinese investors are about to invest in a cluster of all vehicle production lines in South Africa in the near future.
In 2013, a Chinese company purchased the Palabora Mining Company (PMC) in Limpopo, extending the mining operation for another 20 years and as a result, helped keep 5000 jobs for locals.
China Longyuan Power Group Corporation, the world’s largest wind-power developer, made $5bn of investment for a wind power installment in the Northern Cape.
It will produce more than 644-million kWh of green energy a year, which will help meet 85000 households’ power demand and reduce 620000 tons of carbon dioxide.
Ji Dong Development Group invested $220m in the Mamba cement project in South Africa, creating over 200 local jobs and boasting near zero air and water pollution.
Five Chinese financial institutions including the Industrial and Commercial Bank of China (ICBC), Construction Bank of China, Bank of China (BOC), China Development Bank and the China-Africa Development Fund have a combined investment of over $6.6bn in South Africa, and provide loans of over $10bn to local companies, creating over 10000 jobs and contributing tax payment of $100m.
In 2008, the ICBC acquired a 20% stake of the Standard Bank worth of $5.46bn and became its single largest shareholder, which enabled strategic co-operation of the banks.
China is the strongest partner for building South Africa into the tourism hub of the world. In 2016, there were 135million Chinese outbound travellers and tourism expenditure was $261bn – twice as much as that of the US. It is estimated that tourism expenditure from China will reach $429bn by 2021.
South Africa hosts the largest number of Chinese tourists in Africa. Last year, only about 100000 Chinese tourists visited but the potential is huge. In the next five years, over 650million Chinese tourists will travel abroad – we hope that, through joint efforts, we will attract more Chinese tourists to South Africa.
China and South Africa face a historic opportunity to synergise development strategies. As a major economic power in Africa, South Africa boasts rich natural and human resources, social inclusiveness, well-regulated markets, and a sound legal system. China has a huge domestic market – a 1.4billion population – and advantages in terms of capital, technologies, enterprises and expertise.
It is estimated that over the next five years, China will import over $8trillion of goods, and the outflow of foreign direct investment will exceed $750bn. While South Africa is actively pursuing economic and social transformation, China is promoting the supply-side structural reforms.
Through mutually beneficial and win-win co-operation, China could contribute significantly to South Africa’s agenda for renewal, jobs creation and transformation as emphasised by President Cyril Ramaphosa in his maiden State of the Nation address.
The Chinese government is committed to encouraging more Chinese companies, investors and tourists to join South Africa’s endeavour for sustainable development and prosperity. China supports South Africa to play a leading and pioneering role in Africa, and become a locomotive to lead Africa’s industrialisation.
In celebrating the 20th anniversary of China-SA diplomatic ties, we are going to have two important summits this year. In July, South Africa will host the 10th Brics Summit. In September, the 3rd Focac Summit will be held in Beijing. New plans for China-Africa and China-SA co-operation will be drawn up. We are ready to join South Africa to make 2018 a year of action, to ensure China and South Africa’s mutually beneficial co-operation will produce more visible and tangible benefits to our two peoples.
Lin Songtian is the People’s Republic of China’s ambassador to South Africa.