China and South Africa Sign Business Deals
South African President Jacob Zuma just completed a three-day visit to China, accompanied by 17 Cabinet Members and 300 businessmen. The Wall Street Journal reports on the business deals forged during the visit:
China and South Africa 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 in 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 boosting 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.
The Christian Science Monitor looks at the scope of South African trade with China, after Zuma announced that the relationship, “should soon help South Africa’s economy generate 7 percent annual growth for years”:
The numbers are breathtaking. The China-Africa trade curve topped a $100 billion from a standing start in just 10 years.
China has overtaken the United States as South Africa’s biggest trade partner. The fingerprint trail of the recent engagement is to be found in the trade data. Another example is iron ore and iron ore concentrates; China was importing $297 million a month a year earlier and it reached $549 million last month. This is as hyper a growth curve as curves get.
Chinese Vice Commerce Minister Gao Hucheng has said, “The African continent’s biggest economy is China’s No. 1 source of African iron, copper, manganese, chrome, and diamonds.”
During a speech at Renmin University in Beijing, Zuma lavished praise on his hosts and implied that his administration had a lot to learn from China’ governing style. From an editorial in the Globe and Mail:
During a three-day trip to China, Mr. Zuma gave a lecture at Renmin University in Beijing, in which he also said, “It is an irrefutable fact that economic power is in a process of shifting from North to South, and West to East. China, for example, is once again assuming its historic position as a major power in the world.”
As if to suggest that the whole world order was reversing itself, with the greater vulnerability of the old-money, established economies in the 2008-2009 recession, Mr. Zuma went on to say that economists from the developed countries used to tell developing ones to behave like the former, and that they would not grow without changing “its political systems to mirror those of the West.”
“Now we are asking what we could learn from other political systems and cultures,” he continued. “Is the political discipline in China a recipe for economic success for example?”
The full text of Zuma;s address is here.