Deputy President Jacob Zuma to Co-Chair Second South Africa - People's Republic of China (PRC) Binational Commission (BNC) Pretoria, South Africa Tuesday, 29 June 2004

Deputy President Jacob Zuma will together with his Chinese counterpart, Vice President Zeng Qinghong co-chair the Second South Africa - People's Republic of China (PRC) Bi-national Commission in Pretoria on Tuesday, 29 June 2004.

Vice President Zeng Qinghong will be accompanied by Ministers of Education, Zhou Ji; Commerce, Bo Xilai; State General for Quality Supervision, Inspection and Quarantine, Li Changjiang; Vice Minister of Foreign Affairs, Dai Bingguo; and the Assistant Minister of Foreign Affairs, Lu Guozeng.
During the visit, the following bilateral agreements will be signed:

· Agreement on Education;
· Exchange of Letters in regard to Grant Aid to South Africa on Human Resources Projects;
· MOU between the General Administration of Quality Supervision, Inspection and Quarantine of the PRC and the Department of Agriculture of the RSA on Sanitary and Phytosanitary Consultation Mechanism;
· Protocol of Phytosanitary Requirements for the Citrus Export from South Africa to the People's Republic of China;
· Cooperation Agreement between the Chamber of Commerce and Industry South Africa (CHAMSA) and The China Council for Promotion of International Trade (CCPIT); and
· Letter of Intent between Sasol and Consortium of Chinese Companies.

The Importance of China
China is an economic giant. Its 1997 GDP was nearly $900 billion, the seventh largest in the world. With $158 billion in goods exports in 1996, China was the world's -ninth largest merchandise exporter.
Since the initiation of economic reforms, beginning in 1978, China has become one of the world's fastest growing economies. Over the past 10 years, China's GDP has grown at an average annual rate of nearly 10%.

FDI in China has doubled over the past decade, now totalling more than US$500 billion on a cumulative basis. The annual figure was over US$53 billion on an annual basis.

It has the world's fastest growing car market - its auto market grew by 35% in 2003. It is now the world's twelfth largest producer of vehicles and the world's third greatest steel manufacturer. China also is the world's leading producer of coal, cement, iron ore, and tin; it ranks second for manganese ore; third for lead and zinc; and fourth in petroleum production, pumping 126 million barrels a day from its wells.
With a population of more than one billion citizens, China is vast consumer market.

Relations with South Africa

Since diplomatic relations were established with China in 1998, bilateral relations have expanded rapidly in the political, economic, technological, cultural, educational and scientific fields. In this regard, the BNC is an appropriate vehicle to add additional value to the existing bilateral relations between both countries.
In addition, as a rapidly rising economic giant, a Permanent Member of the United Nations Security Council, and the largest developing country in the world, China is seen as a strategic partner of South Africa.

South Africa and China share a common perspective on various global issues, viz:
· Restructuring of the UN
· Reform of the Global trading System
· Enhanced South-South Cooperation

In this regard, several high-level visits from China to South Africa have taken place during the last five years:
· Vice President Hu Jintao visited South Africa in February 1999;
· Vice Premier Qian Qichen was invited to South Africa to attend the inaugural ceremony of President Thabo Mbeki as the Special Envoy of President Jiang Zemin in June 1999;
· Mr. Li Peng, Chairman of the National People's Congress Standing Committee paid an official visit to South Africa in November 1999;
· President Jiang Zemin paid a State Visit to South Africa in April 2000 during which the Pretoria Declaration was signed which provides a political framework for the development of relations and also serves as an instrument to strengthen relations in an integrated manner. During this visit, both Heads of State also decided to set up a Binational Commission between both countries;
· Mr Li Ruihuan, Chairperson of the Chinese People's Political Consultative Conference visited South Africa in April 2001; and
· Premier Zhu Rongji visited South Africa in September 2002.

President Thabo Mbeki, accompanied by eight Cabinet Ministers, paid a very successful State Visit to China in December 2001 during which the framework for the BNC was formalised. The inaugural meeting of the BNC was also held during this visit at which time the first round of the South Africa - China Joint Economic Commission took place.

Economic Relations with South Africa
South Africa is the largest trading partner of China in Africa. The trade volume between China and South Africa accounted for 20% of the total trade volume between China and Africa. The direct bilateral trade between the two countries started in the early 1990s. The trade volume between China and South Africa has increased from R 9.3 billion in 1990 to R 23,3 billion in 2003.

Beijing is particularly interested in specific South African technologies, such as mining, electricity supply and power stations, water management, solar energy, pollution control, military technologies and nuclear research.

Chinese Foreign Direct Investment (FDI) to South Africa amounted (cumulatively) to about R 500 million, while South African FDI into China amounted to about R 4 billion.
South Africa is the first country of destination in sub-Sahara Africa for self-financed Chinese tourists

Economic Relations with Africa
Many unexplored opportunities exist for mutual economic benefit between the African Continent and China:
· Investment opportunities such as, mineral extraction, telecommunications and construction, exist in African economies.
· China has prioritised investment in Africa and is actively encouraging and supporting Chinese companies that are interested in expanding their operations in Africa. There are now 577 Chinese companies operating in 49 African countries. The majority of these companies are trading firms, industrial manufacturers, transport or agricultural companies, and companies dealing in mineral extraction. China is also actively negotiating and signing agreements on the encouragement and protection of investment as well as agreements on the avoidance of double taxation. Over the period 2000 - 2002, almost 100 new Chinese companies were set up in Africa with a total inward investment of approximately US $150 million.
· China is expected to import almost 50 per cent of its oil requirements by 2005 since China's annual domestic consumption of oil is expected to reach 300 million tons by 2010, of which more than half will have to be imported.
· Other important raw material requirements include timber, copper, non-ferrous metals and iron ore.
· China is constantly seeking new opportunities to export to Africa and Chinese manufactured products are considered ideal for African consumers.
· There are also indications that China is seeking to sell more of its traditional medicines to Africa.

The China-Africa Co-operation Forum
Former President Jiang's new commercial emphasis led to the Beijing Declaration and the Programme for China-Africa Co-operation in Economic and Social Development adopted in October 2000 at the Sino-African ministerial-level conference in Beijing. The central purpose of the China-Africa Co-operation Forum was to strengthen economic co-operation and to consolidate areas of common interest. Jiang also set the tone for future Sino - African relations by committing China to closer South-South co-operation and the creation of "an equitable and just new international political and economic order." Furthermore, the Beijing programme called on Sino-African business leaders to "vigorously explore" all the "opportunities offered" by their respective markets.

Foreign and trade ministers from 44 African countries met Chinese diplomats in Addis Ababa from 15 - 16 December 2003, for the Second Ministerial Conference of the China - Africa Co-operation Forum which reviewed progress on the implementation of the agreements reached at the October 2000 Beijing meeting, along with outlining a new and more focused action plan.

The political framework of the Addis Ababa Action Plan provides for continued high-level exchanges and enhanced political dialogue along with a renewed promise from Beijing to participate actively in African peacekeeping operations, and to co-operate on a range of security related issues. Co-operation in the field of social development includes China's promise to expand its African Human Resources Development Fund to train up to 10, 000 African technicians over the next three years. This will be complemented by China's agreement to assist in the following areas: medical care and public health, cultural exchanges and people-to-people exchanges.

Bilateral Agreements

A broad range of agreements have been concluded between South Africa and China to formalise relations. Of specific importance inter alia are those in the fields of Police Cooperation, Arts and Culture, Trade, Economic and Technical Cooperation and Science and Technology Cooperation.

Bilateral Agreements include:
· Exchange of Notes on the Establishment of Informal Offices in Pretoria and Beijing
· Joint Communiqué on the Establishment of Consular Relations
· Memorandum of Understanding on the Establishment of Diplomatic Relations
· Agreement concerning the Maintenance of the Consulate-General of the Republic of South Africa in the Hong Kong Special Administrative Region of the PRC
· Agreement concerning the Reciprocal Encouragement of and Protection of Investments
· Exchange of Notes Exchange of Notes regarding Funding of Edenvale / Modderfontein Low-cost Housing Project
· Agreement relating to Civil Air Transport
· Agreement on the Establishment of a Joint Economic and Trade Commission
· Letter of Intent on Foreign Ministry Consultations
· Agreement on Trade, Economic and Technical Cooperation
· Agreement on Scientific and Technological Cooperation
· Exchange of Notes regarding the Participation in the Integrated Fish Farming Technology Training Course
· Exchange of Notes on the Provision of Water Supply Materials
· Notes on State to State Assurances for the Supply of Fissionable Equipment and Material from the RSA to the PRC
· Agreement on Phytosanitary Cooperation
· Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income
· Agreement in respect of Police Cooperation
· Pretoria Declaration on the Partnership between the RSA and the PRC
· Agreement on Cooperation in the Fields of Arts and Culture
· Agreement on Maritime Transport
· Agreement on Cooperation in Animal Health and Quarantine
· Memorandum of Exchange of Diplomatic Notes on South Africa's Representation in the Macau SAR of the PRC
· Understanding on Cooperation between the National Prosecuting Authority of the RSA and the Supreme People's Procuratorate of the PRC
· Memorandum of Understanding on Public Health and Medical Sciences
· Agreement on Mutual Legal Assistance in Criminal Matters
· Extradition Treaty.

Issued by Ronnie Mamoepa on 082 990 4853.
? Department of Foreign Affairs
Private Bag X152
Pretoria
0001
21 June 2004