beyondbrics

Sealed with a handshake: Jacob Zuma, South Africa’s president, met his Chinese counterpart Hu Jintao in Beijing on Tuesday as the two sides announced a raft of commercial deals that will strengthen ties between the countries.

As is usual on these occasions, there were plenty of warm words about a “strategic partnership” and enhancing “mutual understanding”. But South Africa also revealed some frustration by saying it wanted China to do more than just import its raw materials.

In an interview with the FT, Rob Davies, South Africa’s trade minister, rejected criticism of China’s Africa policy, saying Beijing was not pursuing a neo-colonial policy and that Africa would benefit from its growing interest in the continent.

But Mr Davies also suggested that he wants China to help South Africa to do some more sophisticated (and profitable) minerals processing and manufacturing itself. He said:

We’re trying to encourage much more value-added trade and investment with China but right now there is a preponderance of raw materials exports to China and a preponderance of value-added goods coming from China to South Africa.

China is South Africa’s largest trading partner, but the trade is not balanced: South Africa mostly ships out minerals and ships in Chinese manufactured goods. Last year South Africa had a $2.7bn trade deficit with the Asian powerhouse.

Zuma himself told a forum of business executives from China and South Africa:

We envisage meaningful future cooperation in infrastructure, the benefaction of minerals, engineering, energy, information and communications technology and electronics. There are also opportunities to be explored in manufacturing.

If South Africa, the continent’s most advanced and easy-to-navigate economy, is struggling to secure Chinese manufacturing investment, it tells you how far its neighbours must be from getting any.

The commercial deals announced on Tuesday included a plan by China Metallurgical Group to build an iron-titanium mine in South Africa, Dow Jones reported. China National Nuclear Corporation also said it was in talks to build a nuclear power plant in the African country.

Meanwhile South Africa’s Standard Bank has signed a memorandum of understanding with China Railway Group to cooperate on funding for rail and infrastructure projects in Africa, according to Reuters.

Standard Bank was the target of China’s biggest single African investment in 2007 when Industrial and Commercial Bank of China bought a 20 per cent stake in it for $5.6bn.

Related reading:
Brics in Africa: adding it up, beyondbrics
Africa as a Bric, Africa can … end world poverty, World Bank blog