South Africa will increase its investment in China this year to strengthen the economic ties between the two fast-growing emerging markets, said a South African minister.
"We would like to increase our investment in several sectors such as automotive and energy," Rob Davies, deputy minister of South Africa's department of trade & industry, told China Daily.
South Africa's investment in China hovered around $700 million in 2006. The figure for 2007 is not yet available.
These investments mainly went to breweries, hotels and the energy sector. The biggest investments have been made by South African giants such as MIH, SAB Miller and Sasol, who are striving to expand their presence in China.
Multinational media giant MIH, which already has stakes in several newspapers in China, including the Beijing Youth Daily, Titan Weekly and Anhui Daily, is eyeing the mobile TV market in China as the country is poised to launch the facility before the Olympic Games.
Energy tycoons Sasol and Anglo-American are also accelerating their billion-dollar projects in China, one in coal-to-petroleum and another in coal chemicals. SAB Miller, one of the world's largest breweries, is looking for more opportunities after its joint venture in China acquired five local brands in the 2006 fiscal year ended March 31.
Sources said major South African banks such as ABSA and Investec are initiating a China fund aimed at investment opportunities in the world's fastest growing economy.
"The scale of the fund will be larger than any investment South African companies have ever made in China," a source said.
China has invested thrice as much in South Africa as the latter in China, Davies said. Most of the rapid increase in Chinese investment has come through China's largest lender ICBC's takeover of a 20 percent stake in South Africa's Standard Bank. The $5.46 billion deal was completed on March 4.
"Trade and economic cooperation is a major strategic area in the cooperation framework of South Africa and China," said Davies.
This year will mark the 10th anniversary of the establishment of the two countries' diplomatic relations.
Bilateral trade has developed over the past decade from a negligible figure to $9.86 billion in 2006, according to statistics of the Ministry of Commerce. China is now South Africa's second largest source of imports after Germany and its sixth largest export market.
"The trade imbalance between two countries has been largely improved," said Davies, adding South Africa's exports to China grew much faster than imports from China last year.
While boosting investments in China, South Africa is also urgently looking for more Chinese investment, particularly in the infrastructure and raw material processing sectors.
"We would like to have more value added to our mining products before exporting them," Davies said.
Talks have been on with some Chinese companies including Sinopec and Sinosteel for cooperation toward that end.