China's R94bn SA stake

03 December 2015 - 02:20 By Bloomberg

China signed 26 agreements pledging to invest R94-billion in South Africa to support its flagging economy and boost its own exports as President Xi Jinping met President Jacob Zuma ahead of a summit this week with African leaders. The deals include a $2.5-billion credit line provided by China Export & Credit Insurance to Transnet for electrical and mechanical equipment, and a $500-million China Development Bank loan-finance accord to help Eskom complete its power plant construction plan.The agreements were signed yesterday in Pretoria.Xi arrived earlier in the day from Zimbabwe, where he had held talks with President Robert Mugabe, and signed aid deals for projects ranging from power to infrastructure."Our two countries complement each other strongly economically," Xi told reporters after the signing ceremony. "Our cooperation on international affairs is becoming ever closer. "Xi is on a five-day African visit that includes the Forum on China-Africa Co-operation with leaders from across the continent inJohannesburg tomorrow and Saturday. Chinese commerce with Africa reached $220-billion last year, making it the continent's biggest trade partner.One of the agreements is aimed at synchronising discrepancies in trade statistics.The Chinese Ministry of Commerce said last month the country's investment in Africa fell by more than 40% in the first half of this year.Beijing Automotive Group will invest as much as R11-billion in what could become the biggest car plant in South Africa,Geoffrey Qhena, chief executive officer of the Industrial Development Corporation, said in an interview. Production may start at the end of 2017, with some of the cars probably being exported to other parts of Africa, he said.Standard Bank agreed with the Industrial & Commercial Bank of China to raise R10-billion in funding for investment in South Africa's power and infrastructure projects over the next five years, according to a statement.ICBC owns 20% of Standard Bank.Zuma said there was room for China to invest in South Africa's energy sector, particularly in renewable energy like wind, solar and hydropower. He didn't mention plans to build new nuclear power plants, for which Chinese companies may be competing.Investec and the Export-Import Bank of China agreed to develop a "long-term" business relationship, focusing on export finance and project finance, as well as the "internationalisation" of the Chinese yuan and "its use as a settlement currency in trade", according to the statement...

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