China and South Africa on Tuesday signed a raft of commercial deals in mining, finance, nuclear energy and other sectors during a visit by South African President Jacob Zuma, as Beijing strengthens its commercial ties with Africa's largest economy.
China and South Africa on Tuesday signed a raft of commercial deals in
mining, finance, nuclear energy and other sectors during a visit by South
African President Jacob Zuma, as Beijing strengthens its commercial ties with
Africa's largest economy.
The list of more than 10 deals, the total value of which wasn't announced,
reflects China's focus on expanding its resources and energy reach in South
Africa to fuel continued growth of China's booming economy, which is on pace to
surpass Japan's this year as the second largest after the U.S. China's demand
for resources has lent great support to South Africa's economy as well as its
currency, the rand, in recent years.
Chinese Vice Commerce Minister Gao Hucheng said
Beijing
will
encourage domestic companies to invest in
South
Africa
's mining and resources
sectors as well as higher value-added sectors. But senior South African
officials also indicated some discontent with the trade relationship. They
called on
China
not
to focus exclusively on investing in raw materials and other "primary
goods," and to buy more value-added goods from
South
Africa
to help promote more balanced
trade.
"We want to work together with China to try to address that so we have a
more equitable balance of trade, in terms of the composition of trade as well
as in terms of the actual value," South African Trade and Industry
Minister Rob Davies said at a briefing.
Davies also said
South Africa
sees
China
as
something of a model for its currency policy.
China
's
defense of its competitive currency as part of its industrial development is a
"lesson" for
South Africa
, he
said, adding that the rand is too volatile. There is a consensus that
South
Africa
needs a more competitive and
stable currency, Davies said, but the rand "has appreciated too much"
in the wake of
Europe
's debt crises this year and
the government isn't hoping to see a further appreciation.
China
is
South
Africa
's top trading partner, and
South
Africa
's economy--more developed
than many others in the region--has been a focal point of a broader Chinese
push into the continent aimed at securing resources and expanding
China
's
international clout. But
South
Africa
has been frustrated by its
sizable trade deficit with
China
.
South Africa bought ZAR70.8 billion (US$9.58 billion) of Chinese goods last
year, 13% of its total imports, while exporting ZAR48.7 billion worth to China,
about 11% of the total.
China
is
the top overseas market for South African base metals, and the second-biggest
destination for South African copper exports, after
South
Korea
, at nearly 24%.
Among deals announced Tuesday, China Metallurgical Group Corp. said it will
construct an iron-titanium mine in
South
Africa
. The mine will have annual
production of 1.2 million tons of pig iron and 680,000 tons of titanium
dioxide, Xu Yongjie, a vice president of MCC International Inc., a China
Metallurgical unit, said on the sidelines of the China-South Africa Business
Forum.
China Metallurgical's framework agreement, signed with Kermas Mining Fund L.P.,
sets the Chinese company as the main contractor for building the mine, which is
located in northeastern
South Africa
, as
well as for infrastructure for the mine, Xu said. Other details have yet to be
finalized, he said.
Separately, an official at China National Nuclear Corp. said it is in talks to
build a nuclear power plant in
South
Africa
. A deal on that would mark
the latest sign that
China
is
gearing up to export nuclear technology at the same time as it rapidly expands
its domestic reactor fleet. The talks involve the potential transfer of nuclear
technology to
South Africa
,
although nothing concrete was expected to be signed during Zuma's visit, the
official said.
China
is
working to become self-sufficient in advanced nuclear technology so that it
doesn't need to award multibillion-dollar contracts to foreign companies to
build domestic plants in the future. It is also looking at selling nuclear
technology overseas in countries such as
Vietnam
,
Belarus
and
Argentina
.
Meanwhile, Standard Bank Group Ltd. (SBK.JO) announced a memorandum of
understanding with Industrial & Commercial Bank of China Ltd. (1398.HK),
China
's
largest lender, which owns a minority stake in Standard Bank, to promote
nuclear cooperation between the countries, according to a South African
government statement. The two banks are working with China Guangdong Nuclear
Power Co. to engage with the Chinese and South African governments, the
statement said.
Standard Bank also signed a cooperation agreement with state-run China Railway
Group Ltd. (0390.HK) on investments in African rail projects.
South African health-care insurer Discovery Holdings Ltd. (DSY.JO) agreed to
pay between CNY190 million and CNY200 million for a 20% stake in Ping An Health
Insurance Co., Ping An Chief Executive Lu Min said Tuesday.
And State Grid Corp. of
China
and
Trans-Africa Projects also signed a memorandum of understanding on cooperation
in electric power transmission technology: The parties agreed to form a
committee which will comprise a number of experts on both sides to exchange
technical information.
Davies, the South African minister, brushed off concerns that
China
looms
too large in
Africa
, saying competition for
influence and for resources there has also helped give local countries there
more choices. "We actually welcome the fact that
China
has a
presence," he said. "We welcome a multiplicity of players, so we
simply don't just have to relate to the established trading partners of the
developed world."
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