China Seeks Improved Investment With South Africa

China Seeks Improved Investment With South Africa

Chinese Vice President, Xi Jinping is on a three-day official visit to mineral-rich South Africa aimed at securing resources for the Asian economic power.

Beijing sees global mining power and regional financial services leader South Africa as a vital source of commodities to fuel its rapidly expanding economy and industries and as a stepping stone to access other African states.

Co-operation deal

The Chinese delegation and South Africa are expected to sign a bilateral memorandum of understanding for co-operation in geology and mining, and a letter of intent related to South Africa's energy sector, among others.

An economist at Standard Bank, Jeremy Stevens, expressed satisfaction that China's political diplomacy desired to reshape the world with Africa's participation.

Analysts have said that the arrangement would foster increased Chinese investment in the continent but has yet to yield major dividends.

Standard Bank, the largest on the continent is 20 percent owned by the Industrial and Commercial Bank of China, in an arrangement analysts felt could

Leverage on investment

The bureaucracy experienced by Chinese investors, which frustrates investments with South Africa, could also be part of the issues to be discussed.

China is South Africa's biggest bilateral trading partner and the focal point of its plan to divert more trade and investment from traditional markets in Europe and North America to the world's fastest growing economies.

South Africa exports about $ 5.5 billion a year in minerals to China state and has been increasingly a destination of Chinese foreign direct investment.

REUTERS/Williams/Austin