South Africa trade mission aims to boost foreign direct investment from China

The call to attract greater foreign direct investment in the country came during a ‘trade expo’ visit to China supported by South Africa’s Department of Trade and Industry. More than 50 firms took part in the visit earlier this week representing sectors including plastics, steel, agribusiness and aluminium.

South Africa’s deputy trade and industry minister Mzwandile Masina, speaking during the visit in Shanghai, told Chinese business leaders: “I urge you to take up opportunities in South Africa that are presented by programmes such as the 800 billion rand (ZAR) ($73bn) infrastructure roll out and special economic zones (SEZ) programme, but remember BEE is the name of the game.”

The South African delegation also visited the Shanghai free trade zone. Masina said: “South Africa’s major exports to China have traditionally been mining products, iron and steel, heavy chemicals and nonferrous metals exports worth in the region of $5 billion a year. Through these expos and the companies that we have brought, we hope to change this tradition.”

BEE policies include measures aimed at empowering more black people to own and manage businesses. Enterprises are regarded as ‘black-owned’ if 51% of a company “is owned by black people, and black people have substantial management control of the business”. South Africa is encouraging foreign multinationals to incorporate BEE support when considering investing in the country.

According to the South African government, total trade with China is on “a steady upward growth”, with trade in 2013 totalling ZAR 192 billion ($17bn), “albeit skewed in China’s favour”, the government said.

In 2010, China and South Africa signed a general co-operation agreement in the field of energy, covering oil and gas, renewable energy, energy efficiency and skills development. China has already started training South Africans in the renewable energy sector.

According to the African Development Bank, trade between China and Africa grew by 20% in 2012 to reach $26.4 billion. At the end of 2012, Chinese investments in Africa totalled $20bn.

Last March, South Africa’s state-owned freight transport and logistics company Transnet awarded what it said was the biggest locomotive supply contract in the country’s history to Chinese and South African firms.

Transnet said the ZAR 50bn ($4.5bn) contract to build 1,064 locomotives was South Africa’s single biggest infrastructure investment initiative by a corporate and was designed to support government efforts aimed at ‘road-to-rail migration’.