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South Africa - China

President Zuma in China for trade talks


South African President Jacob Zuma has arrived in Beijing for talks with his Chinese counterpart, Hu Jintao, aimed at broadening ties between the two countries. The two men are expected to discuss ways of expanding their already sizeable trade ties. 


Zuma was welcomed by Hu at Bejing's Great Hall of the People before the two leaders went into talks described as "crucial" by the South African president.

China National Nuclear Corporation is reported to be in talks to build a nuclear power plant in South Africa, and Vice Commerce Minister Gao Hucheng said the goverment would encourage domestic companies to invest in South Africa's mining and resources sector.

The state-run China Railway Group is also to sign a memorandum of cooperation with South Africa's Standard Bank Group Ltd, on investments in African rail projects.

Bilateral trade between the two countries, which has been expanding since the establishment of full diplomatic relations in 1998, last year reached around 16 billion dollars.

China, which last year overtook the United States to become South Africa's largest export destination, mainly imports raw materials such as iron ore, as well as iron and steel to fuel its growing economy.

Unlike some other African countries, South Africa has previously had a "less than easy" relationship with China, says Razia Khan, an economist with Standard Chartered Bank.

South Africa's traditional manufacturing base has been overtaken by Chinese competitors, who are able to mass produce goods at much lower prices, Khan explains.

"Notwithstanding that, China has still risen to become South Africa's key trading partner, displacing even Europe, and the hope for South Africa is that, given the value of their value-added manufacturing, they will still be able to find an export market in China."

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