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South Africa-China Investment Cooperation seminar

Tuesday 16 April, 2013

On the day of the BRICS summit, the trade & investment arm (TIKZN) of the government of KwaZuluNatal (KZN) held a South Africa-China Investment Cooperation seminar, which was attended by about 120 representatives from China & South Africa (SA).  MC Desmond Golding, of KZN Economic development & tourism, kicked off by noting that SA contains 11 hubs of interest to Chinese companies, & that there is interest in ports & airports too.  MEC Mabuyakhulu, provincial minister of economic development & tourism of SA,  indicated that there are 18 ASDA investment projects in KZN worth R240B in among other things, renewable energy & electricity.  The city of Durban is building a bridge across Durban harbor.  Durban together with Richards Bay handles 80% of the shipping of SA’s exports & imports.  KZN’s vision 2030 plan makes the province the gateway to Africa.

Chen Jian, Vice Minister of Commerce of the PRC confirmed their 2010 comprehensive strategic partnership.  China is SA’s trading partner while SA is China’s biggest trade partner in Africa.  He proposed 4 suggestions:

  1. Strengthen cooperation by introducing new products to 1 another as China wants to import more from SA.
  2. Industrial cooperation-SA is good @ manufacturing appliances & agriculture, so they should cooperate deeply in manufacturing
  3. Create a platform for exchange-of people, customs, & cultures
  4. Strengthen mechanisms-with more trade & investment agreements

A surprisingly familiar face showed up to make a presentation.  Charles Manuel, former trade commissioner for South Africa to Chicago, made a presentation on Investment opportunities in SA, specifically in KZN.  At present, China  is the #1 investor in SA, primarily in minerals.  They are seeking to increase the procurement of SA products & services.  The area provides a gateway to global shipping routes which offer access to 200M consumers.  In 2010, SA had 6M internet users.  Africa is changing:  of it’s 54 countries, 35 are now democracies.  There were only 8 democracies on the continent in 1991.  These countries are becoming more attractive according to an Ernst & Young 2011 survey.  SA is Africa’s only UN Security Council member.  SA is in the top 5 countries for cell phone coverage.  In emerging markets, SA has the #2 financial sector, & the $2 business tax rate.  SA is ranked #35 of 183 countries in ease of doing business & #1 in ease of getting credit.  It’s #10 in terms of protecting investors.  The government’s goal is to create 5M jobs to get the unemployment rate down to 15%.  China is SA’s #1 export & import destination.  Opportunities lie in the green economy & renewable energies, which are projected to reach 40% by 2020.  R350B is being invested in upgrading infrastructure.  Automotive is SA’s flagship industry while film & media offer strong incentives.  SA is becoming a business process outsourcing destination.

Liu Dianxun, of China’s investment promotion agency, said many famous state-owned enterprises & private companies are included in the visiting delegation.  China is constructing a 4G mobile network.  China offers 31 economic development zones & has signed 88 memorada of understanding, including a declaration of intent with SA

Zamo Gwala of TIKZN told us more about KZN, which has a population of 10M, 1/3 of which is in Durban.  KZN is 20% of the population & accounts for 17% of the GDP of SA.  Manufacturing leads @ 20%, followed by financial services @ 18%.  Their growth strategy is to create industrial economic hubs with a focus on maritime & tourism.  The plan is to dig out Durban’s port so that it can handle 20M TEU’s (T equivalent units) & make Richards Bay a deep sea port.  It’s also in the plans to build a new city to surround the new  international airport, which will be connected to the existing city & Pietermaritzburg with a monorail.  Other opportunities exist in R&D, renewable energies, & agricultural processing.  Their hope is to also add value to the minerals that are extracted & exported.  The old airport is being turned into an automobile supply park.  600km of coastline are waiting to be developed into entertainment venues & resorts.

An integrated logistics firm with operations in Durban, Transnet Ports SA, made a presentation/commercial, on their take on SA’s role in the future of Africa.  A Chinese health care firm Time Medical Systems, made a presentation on their medical imaging solutions for the developing world.

Here are the participating Chinese companies which have website URL’s:

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