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South Africa Special: South African ties lay foundations for bilateral trade growth

Updated: 2014-05-23 09:08
By Ma Yi ( China Daily Africa)

Close political, economic and personal ties between South Africa and China reaffirms that distance is not a factor in strengthening relations, said Esrom Thabo Thage, South African consul general in Shanghai.

The bond has helped to rebalance South Africa's international relations perspectives, he said.

Since the two countries established formal diplomatic ties in 1998, several high-level visits contributed to the consolidation of bilateral relations between the two countries.

Thage said a high point was in December 2010 when an invitation was extended to South Africa to join the group of major emerging economies under China's chairmanship of what was then known as BRIC.

He said South Africa was "very privileged" to be one of the first countries to host President Xi Jinping on a state visit in March 2013, shortly after he took up the role.

"We are fortunate that with the South Africa-China relationship, which is one based on equal partnership and mutual respect, there is little that cannot be raised openly in bilateral discussions or through the diplomatic channels," the consul general said. "The close relations between the countries allow for open and healthy discussions and negotiations."

"The close relations and open dialogue between fraternal partners have helped in the speedy evolution of the partnership over the past years, from establishing diplomatic relations to signing a comprehensive strategic partnership agreement - that is indeed testament to an extraordinary relationship," he said.

"The excellent political relations have laid solid foundations for the growth of bilateral trade," which Thage said increased by 27 percent between 2012 and 2013.

China has been South Africa's largest trading partner since 2009 and a growing number of Chinese companies are investing in the African country.

More than 80 Chinese-invested companies have operated in South Africa since 1998, bringing direct investment from China cumulatively to nearly 63 billion rand ($6.02 billion). The companies cover a variety of sectors including mining, manufacturing, solar energy and financial services.

Major South African companies have also increased their footprint in China.

They include First Rand Bank Limited, South African Airways and one of the world's largest producers of synthetic fuels SASOL. Other examples include Discovery Holding, which has a joint venture with domestic insurer Ping An Group, Naspers MIH, which owns a 34 percent stake in Chinese social media giant Tencent and SAB Miller, which is the largest brewer in China through CR Snow, its joint venture with China Resources Enterprises.

According to FDI Intelligence data, Chinese projects in South Africa were worth 14.74 billion rand in investment capital between 2003 and 2013. During the same period South African investors poured 64.15 billion rand into China.

South Africa's participation in the 2010 World Expo in Shanghai showcased the 2010 FIFA World Soccer World Cup, which was hosted in the country, and demonstrated the South African economy's capabilities across a broad range of sectors. The South Africa pavilion attracted more than four million visitors.

The South African Consulate General in Shanghai, which was established in 2002, was intended to act as a bridge between the two countries, Thage said.

The opening of the consulate in Shanghai was in recognition of the economic potential of the regions under the consulate's jurisdiction and the role it could play in South Africa's own trade and investment priorities, he said. The regions include Shandong, Jiangsu, Zhejiang, Fujian, Anhui, Guangdong and the municipality of Shanghai.

"Our plan is essentially to deepen economic cooperation and people-to-people collaboration between South Africa and Shanghai, as well as the six provinces under our jurisdiction," he said. He added that improving turn-around times in the visa application process was part of the efforts.

Shanghai is a sister province to Kwa Zulu Natal Province in South Africa and signed an MOU with the city of Johannesburg.

Kwa-Zulu Natal is the second largest provincial contributor to South Africa's GDP, while Johannesburg is the economic capital of South Africa and generates more than 17 percent of South Africa's GDP.

In the past two weeks, government delegations from KZN, Johannesburg and Cape Town visited the city to discuss elevating their relations with Shanghai. Thage said this was "demonstrating clear intent and commitment from the South African side".

"Response from Shanghai has been very positive and discussions will continue over the next few months with a view to highlight bankable projects and clear programs of action to the benefit of both sides," he said.

Broad areas of cooperation include smart cities, port issues, film, music, art, financial services and energy. Consideration will also be given to how the Pilot Free Trade Zone can benefit South African companies keen to do business in China, he said.

"We are working with Fujian and Jiangsu to bring more South African students to study in China. Trade and investment seminars will also be held in various cities to present bankable projects and trade opportunities to Chinese investors," he said.

The 20-Years of Freedom and Democracy in South Africa and the Year of South Africa in China are both celebrated in 2014. Thage said these milestones were opportunities for the consulate to strengthen partnerships with Chinese interlocutors by deepening bilateral relations, people-to-people and business-to-business contacts.

The consulate hosted a number of events in Shanghai in April, including activities to promote South African food, wine, culture, fashion, arts and crafts and music, and the 20th Freedom Day Celebration.

There are around 400 South Africans studying and working in Shanghai. The increase in English language courses will help attract more South Africans to China. More South African schools are offering Chinese as an additional language so China will become an obvious choice in the future, Thage said.

"South Africa, which has excellent and world-class tertiary institutions, is similarly looking to attract more Chinese students to study in both undergraduate and post-graduate courses," he noted.

China is the fourth biggest source of tourism to South Africa, having overtaken France in 2012.

More than 90 million Chinese people travel overseas every year so there is still potential to increase these figures significantly, Thage said.

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