Trade, Industry and Competition Minister Ebrahim Patel has welcomed the August 10 signing of trade and purchasing agreements between South African and Chinese companies, saying it would contribute to job creation, particularly for young people, while boosting the South African economy.

Highlighting discussions with Chinese Commerce Minister Wang Wentao on August 9 and 10 as part of the eighth session of the South Africa-China joint economic and trade committee hosted by the Department of Trade, Industry and Competition (DTIC), in Johannesburg, Patel emphasised the importance of trade between the two countries.

The delegation included major Chinese importers from several different sectors, including the renewable energy, precious metals and agriculture sectors, with several trade contracts signed between the two countries on August 10.

“The total two-way trade between China and South Africa has exceeded R900-billion, and South Africa's exports to China exceed R500-billion. This represents a success in the first phase of our relationship, which is deepening, after the establishment of political relations in 1994.

“The second phase of our relationship has been to achieve more equal investment by Chinese companies into the South African economy, and by South African companies into the Chinese economy. Today, Chinese investment in South Africa stands at close to R200-billion,” Patel said.

He also pointed out that there were a growing number of significant players in the local economy that were now “inward investors” in the Chinese economy.

He said this increasing trade between the two countries represented a “building block” for the next phase of South Africa’s development, particularly to strengthen industrialisation in South Africa and support the transition to, and use of, more environment-friendly technologies.

As Patel and Wentao spent time examining a number of initiatives during the event, from the promotion of trade to investment in growing companies, Patel emphasised that this interaction continued the centuries-long trade relationship that had existed between the countries.

Patel estimated that deals worth about $2-billion were signed during the event.

He further pointed out that both the South African and Chinese governments would be working together in anticipation of the State visit of Chinese President Xi Jinping on August 22.

This State visit will contribute to strengthening economic relations between South Africa and China.

“The doors are opening for trade even more, and the doors are opening for investment. We plan to have a similar event to this within the next six months or so to strengthen and signal the commitment of China and South Africa to work closely together,” he noted.

BRICS DYNAMICS

Brazil, Russia, India, China and South Africa (Brics) Business Council representative Stavros Nicolaou also attended the event, and emphasised the importance of trade between China and South Africa within the context of Brics membership.

“We acknowledge that South Africa’s trade within the Brics bloc is represented by 68% trade with China, making China our single largest trading partner within this formation.”

Nicolaou also highlighted the importance of the Brics bloc by pointing out that the economic size of the Brics bloc was about 31.5% to 32% of global gross domestic product (GDP).

This has surpassed the contribution of Group of 7 countries - which include more developed countries such as the US, Canada, the UK and the European Union - to global GDP of about 30%.

Nicolaou added that the Brics Council had adopted a targeted approach that would examine trade patterns across the five Brics countries.

“Exports to China grew by 7% last year. And yet our imports have grown at around 16%. Trade deficits are always going to exist; however, we as a council, see those trade deficits as an opportunity, in the spirit of the same partnership that you've become accustomed to throughout today that has led to these meetings.

“What is seminal for us is trying to bridge those trade deficits through mutual opportunities. We're excited at today's proceedings and today's event, because they will hopefully allow us to export less raw material and export more finished products in collaboration with our Chinese partners,” he said.

He also pointed out that the Brics council was conducting this analysis on a targeted sectoral basis.

South Africa currently has an estimated $11-billion trade deficit with China, he noted.

He also added that South Africa’s first and ninth-largest exports to China were mining-related raw materials. The country’s tenth largest export to China was agricultural products.

“Similarly, we’re importing a lot from China, including electronics, equipment, machinery and others. We see this as an opportunity for the future, and we’re excited by the signed agreements that total $2-billion.

“We’re also excited by the opportunity to have presented South African products to China, including cooperation in the automotive and agricultural sector, and products such as nuts and avocados. These are all products we’re looking to increase exports of to China. Many companies provide devices, pharmaceutical products, and products for mining, minerals and precious metals, and others.

“We look forward to working with our colleagues in China over the next six months to bring pragmatism and reality to these ambitions,” Nicolaou stated.

Meanwhile, the DTIC would, alongside the Brics Business Councill, host inward buying and investment missions from Brazil, Russia, India and China from August 13 to 23. The missions will be held in Gauteng, the Western Cape, the Eastern Cape and KwaZulu-Natal.

The missions precede the fifteenth yearly Brics Summit to be held at the Sandton Convention Centre, in Johannesburg, from August 22 to 24.

DTIC deputy director-general of exports Lerato Mataboge said the missions would serve as a platform for facilitating meaningful connections between international buyers and relevant South African partners, fostering business partnerships and expanding market access.

She added that these missions were aimed at promoting value-added exports, strengthening the inflow of foreign direct investment and showcasing available investment opportunities in South Africa.

“We expect these missions to contribute significantly to the economic growth and development of the participating provinces and the country as a whole. By attracting foreign investment and fostering trade partnerships, the missions aim to create employment opportunities, drive economic growth, and strengthen South Africa's position in the global market.

“This initiative aligns with the broader objectives of the Brics Summit business programme, which aims to promote collaboration, attract investment and showcase opportunities among Brics members, as well as with the African continent,” said Mataboge.