Dragon firms its foothold

2011-09-24 14:19

The Chinese are coming and bringing their billions with them.

Early next month a high-powered 20-member business delegation, led by Hong Kong Stock Exchange chief executive Ronald Aculli, will visit Johannesburg and Durban for talks with local business bodies aimed at promoting increased Chinese investment in South Africa.

Aculli’s team – whose visit is a spin-off from the recent visit to China by President Jacob Zuma and a 100-member business delegation – is also laying the groundwork for a working visit to South Africa in December by China’s Finance Minister Xie Xuren and 120 leaders of the country’s wealthiest and most influential businesses.

South African businessman Elias Khumalo, who is in partnership with the influential SSC Mandarin Group and one of the facilitators of the investment initiative, said the visit which starts on October 6 would see Aculli’s team meeting with organised business in Johannesburg for two days.

Members of the Chinese delegation will hold private talks with local companies they are interested in working with.

They will also spend a day holding exploratory talks with a delegation from the Durban Chamber of Business as a means of beefing up Chinese investment in KwaZulu-Natal, rather than in Gauteng alone.

At present resource-hungry Chinese companies and investment houses are gearing up for a big push into South Africa.
Already two investment houses, the China Africa Development Fund and the Chinese Construction Bank, have set up shop in Johannesburg and have begun funding joint partnerships with local companies and Chinese investors in the minerals, construction and other sectors.

The two bodies provide cash at a rate far lower than local banks, but insist on local companies partnering with Chinese counterparts as a proviso for funding being approved.

Khumalo believes the two visits will start “putting meat on the bones” of South Africa’s bilateral relations with China; and also translate the country’s joining of BRICS into tangible economic benefits for the local business community.

“What we are hoping to do is to begin making sure that the bilateral and multilateral agreements go beyond government-to-government treaties by starting to build up the business-to-business relations.

“This is about the practical implementation of these agreements and about letting South African companies know what is available in terms of investment and support from China.

“There are significant numbers of companies here that need funding, while their Chinese counterparts are hugely interested in investing here across sectors, but with a great interest in resources,” he said.

Khumalo said the December visit would hopefully solidify whatever progress is made next month by pairing up the companies who accompanied Zuma to China and other interested groups with the cream of China’s business leaders.

“The guys who will be coming in December are really very, very serious people; the companies which dominate most sectors of China’s economy.

“There is already significant investment by several of them here, particularly in mineral resources and we envisage that the two visits will really add great value to the existing relationships,” Khumalo said.

The minerals and energy, trade and industry, economic development and finance departments are all expected to get involved in the second visit, which will again see the main delegation meeting with potential partners beyond Gauteng.

“We believe it is crucial that investors like the Chinese become aware that there is much more to South Africa in terms of opportunities than simply Johannesburg and Gauteng.

“We have to ensure a more even spread of investment to assist economic development in the provinces,” Khumalo said.

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