Paul Mashatile salutes Chinese enterprises for contribution to South Africa’s economy and job creation

Deputy President Paul Mashatile on Wednesday addressed the launch ceremony of the Corporate Social Responsibilities Report of the South Africa-China Economic and Trade Association (SACETA) in Johannesburg.

Founded in 2011, SACETA, a non-profit entity voluntarily established by Chinese-funded enterprises in South Africa, was entrusted with the compilation of this report.

Mashatile told delegates including Ambassador of China to South Africa Wu Peng, chairman of SACETA Zhang Chaoyang, and CEO of Samancor Desmond McManus, that the gathering also attended by senior South African government officials, embodies the strong and enduring partnership between the two nations.

“We acknowledge SACETA members' substantial contributions to South Africa's economic and social development. Your participation and investment in our country are critical for creating jobs and promoting economic growth and development,” said Mashatile.

“The report launching today highlights the contributions of Chinese-funded enterprises in South Africa to environmental conservation, community development, education, and healthcare. It acknowledges the importance of responsible business practices and their positive impact on society, highlighting their dedication to social responsibility and efforts toward a more inclusive and sustainable future.”

He said the 200 Chinese-funded enterprises operating in South Africa serve as role models for businesses, demonstrating that profitability should be balanced with social good.

“As the global economy faces challenges like climate change and social inequality, businesses must embrace their role as agents of positive change. The Corporate Social Responsibilities Report exemplifies this ethos, inspiring a prosperous, equitable, and sustainable future,” said Mashatile.

He said China, as one of the world's greatest economies, provides an enormous market for South African goods and services. In return, South Africa provides rich resources, such as minerals, agricultural products, and skilled labour, to support China's rising economy.

“Improving trade connections between South Africa and China benefits both countries directly and has a positive ripple effect throughout the region. Increased trade creates jobs, stimulates economic growth, and improves living standards for the people of both countries,” he said.

South Africa mostly exports minerals and agricultural products to China while importing mostly manufactured goods from China.

“At a time when African economies are becoming more integrated, China's technological prowess may help Africa industrialise and export more than just raw materials. Instead of exporting raw agricultural items, South Africa may export processed foods that are more valuable,” he said.

“We further agreed that we must meet China's specific market access requirements, such as full compliance with the General Administration of China's (GACC) regulations and standards.”

He urged the Chinese-funded enterprises operating in South Africa to seize opportunities in emerging fields such as artificial intelligence, the digital economy, and green energy.

Similarly, Mashatile said South African companies can leverage Chinese capital and expertise to expand their operations globally and tap into new markets.

“In 2023, Chinese businesses revealed plans to invest up to R15 billion at South Africa's fifth Investment Conference. In that same year, we witnessed the signing of significant purchase agreements totalling 2.2 billion US dollars with companies in both nations. Therefore, our positive trade relations continue to be crucial in combating unemployment, inequality, and poverty,” he said.

The deputy president also called on China to increase sustained and new foreign direct investment (FDI) to support assembly, manufacturing, infrastructure development, and beneficiation at the raw material source.

“Considering that South Africa is grappling with significant skills shortages across several crucial sectors, particularly in IT, engineering, healthcare, and finance. I would like to encourage SACETA to also focus on this area,” he said.

“As a country, we have implemented measures to make it easier for foreigners to apply for and acquire work permits. According to Reserve Bank data, each vital talent brought into the country has the potential to indirectly create seven more jobs.

As a country, we wish to collaborate with you to address these important skill shortages through attracting foreign talent,” said Mashatile.

The deputy president said moving forward, he reaffirms commitment to expanding South African-Chinese trade and investment cooperation.

Chinese Ambassador Wu Peng said the Corporate Social Responsibility Report of Chinese-Funded Enterprises in South Africa officially launched on Wednesday marks the second edition following its first release in 2018.

“This report highlights the substantial contributions made by Chinese-funded enterprises in recent years towards the local development of South Africa, including efforts to improve the livelihoods of local communities, protect the environment, and support various sectors. It serves as a vivid demonstration of how Chinese-funded enterprises faithfully implement the principle of sincerity, real results, amity, and good faith, and take the right approach to friendship and interests, as proposed by President Xi Jinping,” said Wu.

He said SACETA plays a pivotal role in advancing mutually beneficial economic and trade cooperation, enhancing communication with government departments in South Africa, and promoting the compliance and development of Chinese-funded enterprises.

“If we compare the practice of Chinese enterprises fulfilling their social responsibilities to the flowers of Namaqualand - the most famous flower ocean in South Africa - the close economic and trade ties between China and South Africa would be the fertile soil that nurtures the beautiful flowers. Our bilateral economic and trade cooperation has composed a wonderful chapter in China-South Africa relations,” he said.

South Africa, as the first African country to sign the Belt and Road cooperation document with China, stands as one of China’s most important investment destinations on the African continent.

Wu said the economic and trade structures of the two countries are highly complementary, making the enhancement of trade and investment cooperation a matter of mutual benefit. Recent years have witnessed an increasing number of Chinese enterprises to invest and operate in South Africa.

“To date, more than 200 Chinese enterprises are operating in South Africa, with total investments surpassing US$10 billion, covering various sectors such as mining, energy, manufacturing, infrastructure, finance, and communications. They have generated significant employment opportunities and tax revenues for the local economy while simultaneously providing Chinese enterprises themselves with valuable development prospects and growth opportunities,” he said.

Wu singled out the Samancor Chrome Project, invested and constructed by China Steel Corporation, which encompasses the entire industrial chain, from mining and mineral processing to smelting, with an annual output of 2.4 million tonnes of ferrochrome.

“This project has created 12,000 jobs, with an impressive employee localization rate of 99.5%,” said the veteran diplomat.

He said the FAW South Africa factory, located in the Coega Industrial Park, has produced over 15,000 Jiefang trucks.

“As the largest and most advanced truck production facility in Southern Africa, it adheres to the highest standards of management, contributing an average of R500 million to local taxes each year,” said Wu.

“The Longyuan De Aar Wind Power Project, invested by the China Energy Investment Group, is South Africa’s largest operational wind power project, with a total installed capacity of 244,500 kilowatts. This facility supplies approximately 760 million kilowatt-hours of stable and clean electricity annually, equivalent to saving 215,800 tonness of standard coal and reducing carbon dioxide emissions by 619,900 tonnes,” he said.

“These examples are just a few among many, showcasing not only the successful outcomes of pragmatic cooperation between China and South Africa but also the vivid epitomes of Chinese enterprises’ sincere support for South Africa’s economic and social development.”

He said together, China and South Africa will continue to make a bigger market “cake” and ensure that the practical collaboration between the two nations yields more “golden fruits”.

“Finally, I would like to express my sincere gratitude to the Chinese-funded enterprises in South Africa for their positive contributions to promoting mutually beneficial and friendly cooperation between China and South Africa, and to the South African government and all sectors of society for their concern and support for China-South Africa economic and trade cooperation and the development of bilateral relations,” he said.

“I believe that in the future, more and more Chinese enterprises will come to South Africa, invest in South Africa, and build for South Africa, bringing more benefits to the two countries and two peoples.

“The Chinese Embassy in South Africa will continue to serve, build and maintain the development of bilateral relations, and work with the Chinese-funded enterprises in South Africa to write a new chapter of a better future for our two countries and two peoples,” he said.

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