China signs deals worth HK$50 billion with South Africa

Ties with continent’s most industrialised nation are a signal of Beijing’s ambitions

PUBLISHED : Thursday, 03 December, 2015, 11:55pm
UPDATED : Friday, 04 December, 2015, 11:36am

President Xi Jinping presided yesterday over the signing of agreements and loan deals with South Africa worth 94 billion rand (HK$50 billion), mainly for infrastructure in the continent’s most industrialised nation.

South African President Jacob Zuma hailed relations between the two nations as at their “best ever”, while Xi described the relationship between the two nations as “comrades and brothers” – a term usually used for ties between communist countries, suggesting the growing importance of South Africa to Beijing’s reach to the continent.

READ MORE: Chinese President Xi Jinping finds new ‘comrade’, gives word new meaning

Xi and Zuma witnessed the signing of 26 deals, including a US$500 million loan to South Africa’s cash-strapped power utility. Other deals include building new nuclear power plants that experts say may cost as much as US$100 billion, and a car plant that could export vehicles to the rest of Africa by 2017.

China’s Credit Insurance Corporation signed a deal to provide state-owned logistics firm Transnet with US$2.5 billion in loans to pay for contracts and equipment with Chinese companies.

China’s ambitions to expand its presence in Africa will be evident at today’s Forum on China-Africa Cooperation in Johannesburg, where it is likely to announce more aid and investment.

READ MORE: Elephant ivory forgotten at China-Africa summit

Nigerian President Muhammadu Buhari will ask Xi to fund rail and power projects urgently needed to diversify an economy hit hard by a plunge in oil prices, a presidential spokesman said.

He Wenping, an African studies expert at the Chinese Academy of Social Sciences, said Xi’s remarks indicated that South Africa would become a key player in China’s drive in Africa.

China has made a string of cheap loans to nations in Africa, a continent that supplies it with vital commodities, prompting criticism that the relationship is based on exploiting resources.