Pretoria - issued by Department of Foreign Affairs

South African President Thabo Mbeki will host Chinese Premier Wen Jiabao on a two-day official visit scheduled from Wednesday - Thursday, 21-22 June 2006 at Tuynhuys in Cape Town.

The visit to South Africa by Premier Wen Jiabao is part of his seven nation African visit, the first by a Chinese Premier in fifty years aimed at the strengthening and consolidating political and economic relations between South Africa and China in particular and Africa in general.

China considers South Africa a strategic partner in its endeavours to strengthen and consolidate its historical relations with Africa. In addition, 2008 will see a decade since the establishment of bilateral diplomatic relations between both countries.

In this regard, South Africa and China are signatories to the New Africa Asia Strategic Partnership (NAASP) whose thrust is the strengthening of economic relations between the continents of Africa and Asia to reflect the strong political, cultural and people-to-people relations that have existed for many decades. Stronger economic relations through increased foreign direct investment (FDI), market access and trade relations are intended to contribute to the alleviation of poverty and underdevelopment that is experienced by the peoples of Africa and Asia.

Accordingly, discussions between President Thabo Mbeki and Premier Wen Jiabao on Wednesday, 21 June 2006 are expected to include:

• A review of bilateral political and economic relations between China and South Africa, including the promotion of trade and investment between both countries and the One-China policy. In this regard, China is now the world's seventh-largest economy and among the fastest growing. GDP officially grew by 9.5% in 2004, the fastest for eight years, and has averaged above 8% growth over the last decade. This rapid increase is partly a function of China growing from a low base, but also derives from China's considerable and ongoing economic reforms, including it's 2001 WTO accession.
  
  
• The Forum on China-Africa Co-operation (FOCAC) preparations ahead of the Summit scheduled for later this year. Within this context, President Mbeki and Premier Jiabao are expected to assess the implementation of the New Africa-Asia Strategic Partnership a year after its adoption by African and Asian Heads of State and Government at the Summit in Indonesia and the synergies of this Partnership with NEPAD as Africa's socio-economic development plan;
  
  
• Co-operation between South Africa and China under the auspices of South Africa's Accelerated and Shared Growth Initiative (AsgiSA) and Joint Initiative for Priority Skills Acquisition (JIPSA);
  
  
• Security issues including non-proliferation and the use of nuclear technology for peaceful purposes;
  
  
• Co-operation in multilateral fora including the:
  
  
• G-77 + China that focuses primarily on strengthening South-South co-operation in the interests of achieving the developmental agenda of the South;
• The newly established Human Rights Council of which both South Africa and China are members;
• The forthcoming Group of 8 (G-8) Summit to be hosted in Russia 17-19 July 2006. Both South Africa and China, in addition to Mexico and Brazil, will be participating in the Summit as "Strategic Outreach Partners" of the G-8. In this regard, the 2006 G-8 meeting will discuss:
• International Energy Security (including climate change)
• Health Care: Prevention of Communicable Diseases
• Education Development; and
• The G-20 that focuses largely on the successful conclusion of the Doha Development Round and the World Trade Organisation negotiations. China chaired this forum in 2005 and South Africa is the current chair. In this regard, both South Africa and China have synergistic views on the reform and strengthening of the international trading and financial system;
  
  
• Other issues of multilateral interest inter alia, the comprehensive reform of the United Nations.

President Thabo Mbeki and Premier Wen Jiaboa will, on conclusion of discussions co-sign the Programme of Co-operation on Deepening the Strategic Partnership between the Peoples Republic of China and South Africa.

While in South Africa, Premier Wen Jiabao is also expected to meet with Deputy President Phumzile Mlambo-Ngcuka, co-host the China-South Africa Business Co-operation Forum together with Deputy President Mlambo-Ngcuka, hold discussions with the Speaker of Parliament Baleka Mbete and the Chairperson of the National Council of Provinces Mninwe Johannes Mahlangu and meet with representatives of the Chinese enterprises and the Overseas Chinese Community in South Africa.

Economic Bilateral Relations

Trade and Investment Links with South Africa

Since the establishment of diplomatic relations in 1998, trade between China and South Africa has grown significantly, with China becoming South Africa's 2nd largest import trading partner in 2005, comprising 9% of total imports and 8th largest export partner, comprising 3% of total exports from South Africa.

In fact both imports and exports grew 30% in 2005 compared to 2004. China still enjoys a massive trade surplus with SA - in 2005 imports from China totaled R31, 476 million, while exports came to R8, 763 million. There is a sizeable trade imbalance in favour of China in our bilateral trade.

Figures in R 000

Foreign Direct Investment

Chinese investments into South Africa currently amounts to US$ 130 million, mostly in a Chromium mine.

South African investments in China amount to US$ 400 million including investments by Anglo American (funds from the UK though), SAB Miller, MIH, a US$ 120 million investment by property group LRPS.

Issued by Ronnie Mamoepa on 082 990 4853