By Helmo Preuss: Economist at Forecaster Ecosa
Although financial group Absa’s Beijing office will only be opened on 8 May 2024, Chinese Ambassador to South Africa Chen Xiaodong and South African Minister of Finance Enoch Godongwana jointly attended the launch event on 31 January at which both congratulated Absa on being able to help Chinese companies invest in South Africa.
Ambassador Chen said this venture demonstrated the importance Absa attaches to the Chinese market. It spoke volumes about the sustained rapid development of China-South Africa relations and the deepening of the bilateral financial cooperation in recent years.
“China greatly values financial cooperation with South Africa. During President Xi Jinping’s visit to South Africa in August last year, the two Presidents reached important consensus on issues like strengthening bilateral financial cooperation,” he said.
In December 2023, China celebrated 25 years of the establishment of diplomatic relations with South Africa. At the time Chen noted that although China and South Africa are geographically far apart, our two countries enjoy a long history of friendly exchanges which provide a fine example for China-Africa cooperation and South-South cooperation.
This is evidenced by the frequent state visits, as well as the numerous bilateral mechanisms, such as the Bi-National Commission, the Joint Economic and Trade Commission and the Strategic Dialogue.
This year, a new Forum on China-Africa Cooperation (FOCAC) meeting will be held in Beijing. South African companies were therefore urged to use the opportunity to go to China, to become dedicated participants in China's big market, facilitators of China's business environment, contributors to China-South Africa economic and trade cooperation, and communicators to the world about China's opening-up policy, thus contributing more Golden Fruits to the Golden Era.
In his speech, Minister Godongwana expressed his warm congratulations on the establishment of the Absa office in Beijing. He said this is an important step for Absa to go global, and points to the future strategic direction for Africa’s development.
“It is a concrete example of the fruitful achievements made over the past 25 years since South Africa and China established diplomatic relations, and it implements the important consensus of the two Presidents on advancing bilateral economic and trade cooperation,” he said.
There has been tremendous growth in trading relations over the past 25 years with bilateral trade in 1998 amounting to only 1.6 billion US dollars which has now expanded almost 35 times in 2022 to some 57 billion US dollars, which is equivalent to one quarter of China-Africa trade.
China has been South Africa’s largest trading partner for several years and in 2022, China accounted for 9.4% of South Africa’s exports and 20.2% of South Africa’s imports, according to the South African Revenue Service (SARS). In rand terms, exports to China totalled R188.4 billion, while South Africa imported R367.4 billion, resulting in a trade surplus in favour of China worth R179 billion.
Minister Godongwana said China’s role as the world's second largest economy was vital to the global economy and South Africa will continue to strengthen exchanges and cooperation with China, encourage capable South African enterprises to explore the Chinese market, and welcome Chinese companies to invest in South Africa. He believed the bilateral cooperation will bring more mutual benefits for the two countries, and inject new vitality into the development of Africa and China.
Absa CEO Mr Arrie Rautenbach expressed his deep thanks to the regulatory authorities in China for the support in setting up the group's office in Beijing, which he believed will drive more Chinese trade and investment into Africa.
“China is recognised as a leading player in the global economy, and Africa is poised to play an increasingly influential role in global trade. There is enormous potential for further collaboration and mutual benefit between the two regions. Absa will use its expertise to foster stronger economic and social ties between Africa and China,” he said.
China looks forward to working with South Africa for stronger high-quality Belt and Road cooperation, and China is committed to realizing the goal of importing 100 billion US dollars’ worth of goods from South Africa within three years.