Deputy Minister Aziz Pahad to Undertake Three Nation Visit to Central and East Asia, 19-28 September 2005

Tshwane - South African Deputy Foreign Minister Aziz Pahad will undertake a three-nation visit to central and east Asia during which he will pay official visits to South Korea, China and North Korea from Monday - Wednesday, 19-28 September 2005.

The visit comes within the context of South Africa's commitment to consolidate bilateral relations with all countries of the South in an attempt to create the conditions for the development agenda of the South to be achieved. In this regard, Deputy Minister Pahad will hold bilateral political and economic discussions with his South Korean, Chinese and North Korean counterparts, Vice Minister Lee Tae-sik, Vice-Minister of Foreign Affairs Dai Bingguo and Vice-Minister CHOE Su Hon respectively.

In China, Deputy Minister Pahad will also hold discussions with Assistant Foreign Minister LU Guozen while he is also scheduled to pay a courtesy call on the President of the Presidium, Kim Yong Nam in North Korea.

Issues on the agenda of discussions are expected to include:

• The status of bilateral political and economic relations between South Africa and each of the countries;
• Developments within the south-east Asia region;
• A briefing by Deputy Minister Pahad on developments in Africa and the SADC region; and
• Other issues of mutual interest.

Economic Bilateral Relations

Republic of Korea (South Korea)

Bilateral economic trade relations between South Africa and South Korea have been increasing yearly with Seoul presently being South Africa's fourth largest trading partner in Asia. South Africa is Korea's largest trading partner in Africa. In this regard, total trade amounted to US$ 1,1 billion US dollars in 2003.

Trade between South Africa and Korea is of a complementary nature and encompasses a broad range of products, minerals and semi-finished products to sophisticated high-technology electric and electronic products. South Africa is a large supplier of bulk raw materials and semi-processed minerals and metals essential for numerous production processes in Korea such as gold, coal, ferro-chromium, ferro-manganese, iron ore, stainless steel, lead, copper, nickel and zinc.

South Korean exports to South Africa are predominantly made up of value-added or manufactured products. Products such as automobiles, auto tires, woven fabrics, apparel as well as industrial electronic and consumer electronic goods are increasingly making inroads into the South African market.

Nine Koran conglomerates have established branch offices in South Africa, including Samsung, Hyundai, Daewoo and LG International. The Korea Trade Promotion Corporation (KOTRA) established an office in Johannesburg during June 1992.

Deputy Minister Pahad will depart from Seoul for Beijing, China on Thursday, 22 September 2005.

China

South Africa is China's key trade partner in Africa accounting for 20,8% of the total volume of China-Africa trade. China has set up more than 80 companies in South Africa since 1998 while Chinese FDI to South Africa amounted (cumulatively) to about US$ 199.3 million, while South African FDI into China amounted to about US$ 700 million (excluding offshore investments from South African corporates such as SAB Miller and Anglo American. South Africa's exports to China consist mainly of raw materials such as aluminium, nickel, manganese, zirconium, vanadium oxides, chromium ores, granite, platinum and gold. China's exports to South Africa have included mainly manufactured products, such as footwear, textiles, plastic products, electrical appliances, tableware and kitchenware. The complementary nature of the two economies provided the impetus for the growth of trade. At the same time, bilateral trade amounts to only a very small percentage of both China and South Africa's international trade profile, suggesting that there is still enormous potential for an increased exchange of goods and services.

According to 2004 statistics South Africa exports reached nearly R5.5 billion with China and imported more than R18 billion of manufactured goods from China.

In addition, China's economic system is the third largest in the world. In 2004 China had the world's seventh largest gross domestic product (GDP). The Chinese economy continued to grow robustly at 9.8% and 9.6% in the first and second quarter of 2004. Latest figures of the first two months of 2005 are showing that China's exports swelled to $95 billion an increase of 36% from a year earlier while imports to china grew by 8% to $84 billion, leaving a surplus of $11 billion. The Chinese Ministry of Commerce forecasting that 2005 surplus will be a lot bigger. China had a surplus of $32 billion in 2004. Much of the export growth has been in textiles and garments, shoes, electronic goods, computers and cellphones. In January 2005 China exported garments to the value of $9.5 billion.

Total China-Africa trade reached about $29.5 billion in 2004, an increase of 59% over 2003. Growth since 2001 has increased at an average of 31.2 percent a year.

Democratic People's Republic of Korea (North Korea)

Exports to North Korea consists mainly of mineral and chemical products as well as prepared foodstuffs, whilst imports consisted mainly of textiles and base metals.

The bilateral trade between South Africa and North Korea is as follows:

Issued by Ronnie Mamoepa on 082 990 4853

Department of Foreign Affairs
Private Bag X152
Tshwane
0001

18 September 2005