IDC, China Construction Bank sign R10bn strategic cooperation deal

IDC, China Construction Bank sign R10bn strategic cooperation deal

The IDC and China Construction Bank have signed a strategic cooperation agreement to promote infrastructure and industrial development in South Africa and the rest of Africa.

The Industrial Development Corporation (IDC) and China Construction Bank (CCB) have signed a strategic cooperation agreement to promote infrastructure and industrial development in South Africa and the rest of Africa.

The deal was signed at the Union Buildings in Pretoria on Wednesday, 2 December in the presence of South African President Jacob Zuma and Chinese President Xi Jinping, who is making his second state visit to the country since taking office in March 2013.

In terms of the agreement, CCB has committed to investing R10-billion in South Africa and the rest of Africa in cooperation with the IDC. The two institutions will also partner in creating a US$2-billion (approximately R28.7-billion) fund to finance industrial development and infrastructure projects in the country and on the continent.

The deal was struck on the back of the IDC’s commitment to invest R100-billion in the local and regional economy over the next five years. A self-financing national development finance institution, the IDC is at the forefront of industrial development, job creation and the establishment of innovative enterprises in South Africa. In October 2015, the Corporation celebrated its 75th anniversary.

CCB is China’s second-largest bank and, according to the Forbes Global 2000 list of the world’s biggest, most powerful public companies, the second-largest in the world after the Industrial and Commercial Bank of China – with China’s other two “big four” banks occupying third and fourth place.

CCB’s Johannesburg branch, which opened its doors in October 2000, is now ranked the fourth-largest foreign bank in South Africa by assets.

IDC, Beijing Auto Group to build car manufacturing plant

The cooperation deal between the IDC and CCB was one of 26 agreements, together worth about R94-billion, signed by China and South Africa in Pretoria on Wednesday, giving a huge boost to bilateral cooperation between the two BRICS partners.

The IDC was partner to another – and potentially the biggest – of these agreements when it signed a memorandum of understanding with Beijing Automotive Group to cooperate in building a new car manufacturing plant in South Africa, either in Durban or East London.

IDC Chief Executive Officer Geoffrey Qhena told Business Day that the plant would manufacture vehicles for local sale and for export to other African countries, some of whom currently import cars from China. The investment in the plant could be as much as R12-billion, and is expected to create thousands of direct and indirect jobs.

Other agreements signed on Wednesday include an action plan on strengthening the joint working group between South Africa and China. The action plan seeks to accelerate bilateral cooperation on joint projects in a number of areas, including investment in renewable energy, investment cooperation in industrial parks, promotion of South African exports to China, and cooperation in South Africa’s black industrialists programme.

An agreement was also signed on strengthening cooperation in developing South Africa’s oceans economy. This will see the two countries collaborating in areas such as maritime transport, offshore oil and gas exploration and production, aquaculture and fish product processing, and the development of ports and port industrial parks.

China, SA relations ‘at new historical high’

“China and South Africa relations are at a new historical level,” President Xi told a media conference following the signing of the agreements. “We want to build it into a model for relationships between China and other emerging economies.”

During their meeting, President Xi and President Zuma also assessed the progress two countries had made since adopting the five- to 10-year Framework on Cooperation during Zuma’s state visit to China in December 2014.

The Framework identifies six key priority areas for cooperation, namely: alignment of industries to accelerate South Africa’s industrialisation process; enhancement of cooperation in Special Economic Zones (SEZs); enhancement of marine co-operation; infrastructure development; human resources cooperation; and financial cooperation.

President Zuma told the media that the volume of agreements the two countries had signed indicated the amount of work that had been done over the past few months. However, more could and should still be done to improve bilateral trade and investment figures.

He called for more inward buying missions to South Africa, saying these would help improve the balance of trade between the two countries, as well as contribute to the industrialisation of South Africa’s economy.

 

 



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