Shaun Benton
18 September 2007
A high-level government task team departs for the People's Republic of China this week to investigate the economic possibilities for South Africa arising from China's 50-year development plan.
Led by the Department of Trade and Industry, the team includes members of the departments of foreign affairs, minerals and energy, agriculture, and science and technology, as well as representatives of mineral research organisation Mintek and the Development Bank of Southern Africa.
The 10-day trip to China will enable the team to study the Chinese economy and explore possible synergies between China's development needs and what South Africa can and could supply.
The team will report to Deputy President Phumzile Mlambo-Ngcuka, who will be visiting China on 24 and 25 September for the South Africa-China binational commission.
Briefing Parliament's portfolio committee on foreign affairs last week, Jerry Matjila, deputy director-general in the Department of Foreign Affairs, said reports from the task team form the basis for plans for increased "economic engagement" between SA and China.
Matjila said President Mbeki and Chinese President Hu Jintao were meeting about every six months to ensure "synergies and momentum". Mbeki is due to visit China before the end of next year.
'We can't just sell commodities'
Also briefing the MPs, Foreign Minister Nkosazana Dlamini-Zuma said China wanted to quadruple its GDP by 2020, and was working on a 50-year plan to boost its development.
China, with the world's fourth-largest economy in terms of nominal GDP, has foreign reserves of over US$1-trillion, and appears ready to start spending. A key objective for South Africa, the minister said, was to get market access to China's population of over 1.3-billion, "but to do that we must establish marketable products".
"We cannot just be selling commodities to China," Matjila added.
The idea is to invite China to invest in adding value to South African products. This is equally in China's interest - not least because of it energy limitations for processing products, including South African products.
Branding South Africa
Another key objective involves the branding of South Africa, to define and enhance its image in the minds of the massive Chinese consumer market. "We need to work on the image of South Africa as a modern, advanced African country with a vibrant economy," Matjila said.
SA country-branding exercises are being planned for key Chinese cities in the lead-up to the 2008 Olympics. These will include exhibitions of South Africa's economic products, as well as its creative arts, culture and sport.
South Africa also sees the Shanghai World Expo in 2010 as an opportunity to start shaping perceptions among Chinese people of a South Africa that is "alive with possibility".
Over 70-million visitors from China and elsewhere are expected to attend the expo, making it one of the biggest international events to be hosted by China after the Olympics.
Trade imbalance
The balance of trade between South Africa and China is more than double in China's favour, according the Department of Foreign Affairs' figures for 2006.
That is if one includes "Greater China", namely: Hong Kong (a colonial territory returned by Britain to China in 1997), Macau (also a colonial territory, returned to China by the Portuguese in 1999), mainland China itself and the nearby island of Taiwan (which China regards as a renegade province).
Overall, South African exports to China came to R23.54-billion in 2006. If one excludes the additional three territories above, exports to "mainland China" came to R14.2-billion.
At the same time, South African imports came to R56.98-billion (R46.7-billion from mainland China).
Nonetheless, China is the fifth-largest export destination for South African goods, and the South African government takes the view that increased value-addition of SA products is what is needed to equalise the trade balance.
Africa cannot simply blame China for the unequal trade balance, Dlamini-Zuma says, but must work on adding value to the resources it has in such abundance and which are in such high demand abroad.
China, Africa cooperation
At the Forum on China-Africa Cooperation (FOCAC) in Beijing last year, President Jintao told African leaders that China would double development assistance to Africa by 2009, provide US$5-billion in preferential credit to Africa, and cancel all interest-free government debt owed to China by Africa's highly-indebted and least developed countries which have diplomatic relations with China.
Jintao said China would also establish a $5-billion development fund to encourage Chinese companies to invest in Africa.
Other pledges made included providing African countries with market access and skills training, building rural schools, helping with health infrastructure and opening special agricultural technology centres on the continent.
One such centre is to be opened soon in South Africa, Matjila said.
More engagements are planned under the FOCAC umbrella, with Africa's and China's foreign ministers due to meet in New York and Cairo next year.
South Africa, for its part, could share some of its techniques with China, for instance, around the development of economic regulators.
Source: BuaNews
