Deputy President David Mabuza has called on business leaders in China to direct their investments to support South Africa's re-industrialisation programme, as part of efforts to correct the trade imbalance which exists between the two nations.
The deputy president is currently on a working visit to China, as part of the seventh South Africa-China Bi-National Commission. According to a statement issued by the Presidency on Friday, the mission is meant to strengthen existing bilateral, political and economic relations between the two countries.
The visit comes just days before South Africa's second investment conference is to be held in Sandton, Gauteng. The conference is part of a drive by President Cyril Ramaphosa to raise R1.2trn in new investments in five years. The first conference attracted R300bn in investment commitments.
Speaking at a business roundtable in Shanghai on Saturday, which was attended by business leaders and government officials, Mabuza highlighted the "solid" and "mutually beneficial" trade relations between China and South Africa.
However, there is a trade imbalance which is cause for concern. He noted that most exports from South Africa to China are commodities. While imports from China to South Africa are mainly manufactured and high-tech products. Between 2013 and 2018, trade between the two countries grew from R271bn to R332bn. The trade balance "soared" from R38bn to R122bn, with the trade surplus in favour of China, Mabuza said.
"In our deliberations with Vice President Wang [Qishan], we agreed that targeted measures need to be implemented to correct this imbalance," Mabuza said.
These measures include diversifying South Africa's export products, investing in the beneficiation of raw materials and primary products to support industrialisation and job creation in South Africa, removing trade barriers and promoting inward buying missions to increase procurement of South African products, Mabuza said.
Other measures include expanding market access of South African products into China. These products include "beef, citrus, soybeans, fresh produce, and processed products", he said.
"Over and above these measures, we have agreed that we need to have targeted focus on promoting investments to support South Africa’s re-industrialisation programme," the deputy president added.
"We welcome existing investments by Chinese companies in sectors such as real estate, automotives and metals," he said.
Improving ease of doing business
Mabuza called on Chinese business leaders to "prioritise" South Africa as an "investment destination", and said that steps are being taken to improve the ease of doing business in the country. This includes the introduction of an improved visa regime.
"There are opportunities in infrastructure development, renewable energy, information and communication technologies, tourism, commercialisation of research and development products, agro-processing, to name a few," he said.
During his trip, the deputy president will also officially open the South Africa Import Pavillion at the Greenland Global Community Trading Hub – meant to promote the export of South African products.
"The South Africa Import Pavillion will feature a diverse range of Proudly South African products which allows tangible access for Chinese traders to directly interact with our products to help facilitate and promote more trade," he said.
South African companies will in the coming week also participate in the Second China International Import Expo. "Through this participation, South Africa hopes to develop export markets for our products and services and to recruit new foreign direct investment into our country," Mabuza said.
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