The South African government has signed several agreements with China, including an investment commitment from China to the tune of $14.7 billion.
This was announced on Tuesday after the State visit by Chinese President Xi Jinping, where he met with President Cyril Ramaphosa to further deepen trade and bilateral relations.
“We have signed several agreements and memoranda of understanding that are intended to further deepen our relations, including investment commitments to the value of US$14.7 billion.
“President Xi Jinping has indicated that China is ready to invest and work with South Africa in various sectors, such as infrastructure development, the ocean economy, green economy, science and technology, agriculture, environment and finance,” President Ramaphosa told a packed media briefing after their official talks.
Some of the agreements signed are in trade and industry, agriculture and science and technology, including a visa agreement.
Several South African State-owned companies also benefitted. These are Transnet, Naspers and power utility Eskom.
The power SOC bagged a $2.5 billion loan agreement with China’s Development Bank.
Eskom CEO Phakamani Hadebe told the media that the $2.5 billion loan agreement is strategic both for investment and capital growth.
“At the beginning of the year, we indicated we need to borrow R72 billion to operate efficiently. Since January, we have raised R57 billion. Today we signed $2.5 billion. This amount moves our funding from 22% to 66%,” he said.
Trade on an upward trajectory
As things stand, total trade between South Africa and China has been growing since 2009, moving from R118 billion to R271 billion by the end of 2013.
However, while there is a trade imbalance between China and South Africa, both countries have implemented various mechanisms to address these discrepancies, President Ramaphosa said.
Both South Africa and China hope that these newly signed agreements and investment commitment will help balance the trade between Pretoria and the Asian giant.
“We also recognised that although trade figures have grown steadily over the past few years, bilateral trade has not reached its potential. We have thus explored avenues for increasing trade, identifying sectors for future investment and promoting tourism,” said President Ramaphosa.
President Xi, who was accompanied to the visit by his wife Peng Liyuan, used the occasion to acknowledge the close and high-level exchanges and fruitful practical cooperation across the board. He described South Africa as a “good brother and comrade”.
Speaking through an interpreter, President Xi said the two countries need to start a new chapter of elevating their relations.
“South African is on a new journey for national development. China and South Africa relations are at a new historical departure point. Just now, President Ramaphosa had a very productive discussion on how to take our Comprehensive Strategic Partnership (CSP) to new heights.”
The two countries also committed to further increase development cooperation in infrastructure, trade, technology and financial cooperation to unlock collaboration potential.
“We support the proposed investment summit and we will be taking active measures to support the government of South Africa in achieving its developmental agenda.”
But above all, the two countries committed to putting the people at the centre of their cooperation, as this will bring greater public support for a China-South Africa friendship, and make the people more closely connected.
President Xi called for strengthened collaboration and strategic coordination in international organisations such as the UN, G20 and BRICS in order to promote the reform of the global governance system in a joint effort to advance the fundamental interests of African and other developing countries.
This was echoed by President Ramaphosa, who said both countries will continue to advance the centrality of the UN and other multilateral fora in resolving issues of global concern.
“In 2019, South Africa will commence its two-year non-permanent seat on the United Nations Security Council. South Africa and China will continue to work together in full accord over the need for the reform of the structures and modalities of the work of the UN,” said President Ramaphosa.
The State visit forms part of a number of activities South Africa and China committed to jointly undertake during the course of this year under the umbrella of the celebration of the 20th anniversary of diplomatic relations.
South Africa and China celebrate the 20th anniversary of the establishment of diplomatic relations, which have advanced from a simple partnership to a strategic one, and now to a comprehensive strategic alliance.
The China State visit coincides with the 10th BRICS Summit, which kicks off tomorrow at the Sandton Convention Centre in Johannesburg.