THE Chinese media called it “an official goodwill visit” to the country at the southern tip of Africa, but top Chinese political adviser Jia Qinglin described it as a strategic engagement with an African state that has become China’s second- largest trading partner on the continent after Angola. Jia, chairman of the national committee of the Chinese People’s Political Consultative Conference, a top Chinese advisory body, was in SA last week to sign business deals worth R2,3bn.

He was accompanied by an influential business delegation that also took part in the China-SA Economic and Trade Co-operation Forum in Pretoria, which focused on SA’s trade policies relating to the ease with which foreigners can set up business in SA.

The Chinese authorities saw China emerging as SA’s major trading partner after Europe and the US reduced orders from SA during the global crisis.

Chinese businesses are now keen to explore the local market further and deepen co-operation with African businesses.

SA and China established diplomatic relations in 1998. In 2008 China was SA’s fourth-largest trading partner; it is now the biggest, having overtaken the US, Japan, Germany and the UK.

The Chinese commerce ministry says that while any new investment in SA or the Southern African Development Community (Sadc) would not be the first, such investments would strengthen already vibrant business relations and the cordial understanding between China and the region.

The commerce ministry says that in the 12 years it has had diplomatic relations with SA, Chinese businesses, ranging from mineral exploration and machinery to textiles and garments, have invested 7bn in SA and established more than 100 companies.

During the Pretoria seminar, representatives of more than 10 Chinese businesses based in SA and 20 from elsewhere accompanied Jia to learn more about SA.

Jia encouraged these businesses to improve their expertise and competitiveness, to observe local laws, and to take on social responsibilities in order to promote their businesses and China.

Jia said the Chinese businesses in SA should “carry forward China- Africa traditional friendship and tap the potential of economic co- operation”.

Jia’s 10-day African tour, which also took him to Cameroon and Namibia, ended in SA with the signing of contracts for products such as wine, frozen fish, abalone and chrome oil worth 311m (R2,3bn).

Trade and Industry Minister Rob Davies described the symbolism of the contracts as marking the deepening of “mutually beneficial economic relations” between the two nations. The latest contracts have more than doubled from the last signing of contracts in 2007, valued at 143m.

Davies says the government also regards its relations with China as strategic, particularly at this period in the world’s history when China is at the helm of a seismic shift in the world economy.

A report last month by the United Nations Industrial Development Organisation (Unido) said China was now the world’s second- largest producer of manufactured goods, overtaking Japan, which held the position for decades. China is also thought to be closing in on the leader, the US.

Combined, the three countries produce half of the world’s manufacturing output.

China’s share of the global total has inched up to 15,6%, pipping Japan on 15,4%.

The US maintains its lead at 19%, according to Unido’s 2010 International Yearbook of Industrial Statistics, a global publication featuring manufacturing statistics for more than 70 countries.

Davies says the South African government believes there is room to increase the volume of agreements. China is the home of a number of original equipment manufacturers in the automotive industry that have set up bases in SA for exports.

“We would like to develop this export platform model also to include exports of vehicles on to the Chinese market,” he says.

Despite criticism from analysts and appeals for Africa to be cautious in its relations with China — some claim China is in a scramble for the continent’s resources — Davies says SA would welcome further investments from China.

SA exports minerals to China as well as wine, while China exports mostly electronic products to SA.

Although SA, which contributes 25% to Africa’s gross domestic product, is a small market from China’s perspective, there is talk of expanding into the region.

Davies says SA is therefore encouraging Chinese business to regard the country as a gateway to the entire economy of the Sadc region, with its 170-million consumers with a market value estimated at 360bn.

He says talks are at an advanced stage to expand Sadc by merging it with the Common Market for Eastern and Southern Africa and the East Africa Community to create a market of 700-million people from the Cape to Cairo.

Jia believes that there is room for the two nations to further open markets between each other as well as to deepen mutual investments — leaving no doubt about the nature of future economic and diplomatic relations between China and SA, and China and Africa as a whole.

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