In working towards shared development goals, South Africa and China hosted a business forum, in Midrand, on Thursday, highlighting how far trade between the two countries has come and what opportunities lie ahead.

China became South Africa’s largest trading partner in 2009, when South Africa became China’s largest trading partner in Africa. However, African National Congress Progressive Business Forum convener Daryl Swanepoel said there was still scope to further increase trade.

Department of Trade, Industry and Competition trade and investment deputy director-general Lerato Mataboge, highlighted that trade between the two countries was valued at R133-billion in 2009 and had grown to R574-billion in 2018.

According to market data, quoted by Mataboge, 14 South African companies had invested R9.6-billion in doing business in China between 2013 and 2016, while 58 Chinese companies had invested around R61-billion in doing business in South Africa over that period.

South Africa primarily exports minerals and mineral products to China, as well as livestock, while China primarily exports technology products, clothing and textiles, and machinery to South Africa.

Mataboge said the countries had a common determination to take their economic relations to greater heights.

As an example, she referred to the 93 economic and trade cooperation agreements, valued at more than R27-billion, signed between South African and Chinese entrepreneurs last month.

“South Africa is open for business and these agreements are testament to that. We continue to welcome global enterprises to invest in our country,” Mataboge said.

She added that South Africa was a profitable place to do business, especially serving as an entry to reach out to one-billion consumers in the Africa free trade area, enabling duty-free exports.

South Africa-China Economy and Trade Association president Wang Wenan pointed out that the association had more than 100 members active in South Africa, that have invested billions of rands in South Africa’s economy, in sectors including financial services, energy, mining, manufacturing and communications.

These members have paid more than R26-billion in taxes to the South African government and created more than 30 000 jobs, since the association was founded in 2011.

Further, Business Unity South Africa VP Martin Kingston said trade between South Africa and China had become increasingly important for both countries, considering the backdrop of trade disputes and Brexit that were affecting the global economy.

Kingston said exports to China last year were valued at R105-billion, while imports from China were valued at R225-billion. He added that cooperation could deepen between the countries in production capacity, infrastructure projects and human resource development in the digital economy.

Chargé d’affaires and Minister-Councellor of the Embassy of China in South Africa Li Nan noted that China-South Africa trade relations were strategic, multi-dimensional and mutually beneficial and offered four advantages, namely mutual political trust, mutual economic trust, people-to-people exchanges and friendship in international coordination.

“China is confident that South Africa will achieve its economic and social transformation and development goals under President Cyril Ramaphosa’s leadership.”

OPEN FOR BUSINESS

Department of Mineral Resources and Energy (DPME) director-general Tabane Zulu said China could greatly help in South Africa’s goal of universal access to electricity.

“At this point in time, we still have a number of citizens in rural areas who do not have access to energy and yet energy is the cornerstone of a better life. There can be no economic development and job creation if everyone does not have access to electricity.”

He noted that the energy sector offered a number of opportunities for entrepreneurs to enter the sector and provide services. Opportunities in the energy sector were prominent in the areas of gas, petroleum, oil, electrical power from renewables and fossil fuels.

“We are hard at work to conclude the process to put together the Integrated Resources Plan, which our government will soon gazette, as soon as the consultative process has concluded.

“We are talking with the National Economic Development and Labour Council  to make sure everyone is on the same strategic direction, to allow policy certainty that will allow the sector to grow from strength to strength,” Zulu stated.

He further noted that South Africa’s production of liquid petroleum gas (LPG) remains low and unable to meet domestic demand in the country, especially during winter months.

“This situation has been exacerbated with unplanned shutdowns of refineries during winter. Investments in LPG infrastructure can provide relief on supply shortages in South Africa, which entrepreneurs can take competitive advantage of.”

He added that the DPME was working on policy instruments to effect transformation in the petroleum products sector – economic codes that would apply to privately owned entities. “If we do this exercise effectively, we can create a more conducive environment to attract investors locally and internationally.”

Meanwhile, Zulu said South Africa needed to develop a policy on biofuels, especially to protect the sugar industry. He said government was creating regulatory frameworks to give biofuels a competitive advantage and create a new industry.

Zulu noted that government had also realised the importance of carbon capture and storage, and started developing business strategies.

“We would like to invite interested parties to engage. We have started a research programme, which is meant to make sure that we continue to be part of a global community that is working hard to reduce carbon emissions.

“As government, we are committed to work with different global investors and partners. We will continue to create a conducive environment to make it easy for our partners to deal with us. Raise the bottlenecks with us, we are here to assist.”