Bua Briefs - 15 of 2010

11 November 2010

Fourth session of the South Africa-China Binational Commission (BNC), 16 November 2010

Deputy President Kgalema Motlanthe will host his Chinese counterpart, Vice President Xi Jinxing, for  a BNC in Cape Town on 16 November 2010. The BNC follows closely on the state visit to China by President Jacob Zuma in August this year, when South Africa became the first African country to sign a Comprehensive Strategy Partnership Agreement (CSPA) with China.

South Africa and China have expressed the desire to further strengthen and deepen co-operation in both political and regional affairs by establishing a comprehensive strategic partnership based on equality, mutual benefit and common development.
 

  • As a key strategic partner for South Africa, the bilateral relationship with China is at its strongest since formal diplomatic relations were established in 1998. President Jacob Zuma and Chinese President Hu Jintao signed the CSPA during President Zuma’s state visit to the country in August 2010, outlining 38 cooperation agreements.
  • The agreements set out in the CSPA range from political dialogue, trade, investment, mineral exploration and agriculture to joint efforts in the global arena, such as with the United Nations and the Forum on China-Africa Cooperation (FOCAC). China enjoys trade surpluses with a number of African countries. As a result, FOCAC provides a platform to address this as well as for China to further open its market access to African products.
  • The BNC is the ideal platform to intensify the implementation of bilateral agreements, as one of the key vehicles for facilitating cooperation between South Africa and China.

The CSPA forms part of efforts to foster mutually supportive positions for South Africa and China.
 

  • South Africa, together with India, Brazil and China (BASIC), will consolidate the work from the Copenhagen Summit (December 2009) towards advancing a legally binding climate-change agreement that supports the developmental imperatives of the South. Further, these countries will work towards using their significant natural resources to develop their renewable energy capacity.
  • South Africa and China have agreed to provide mutual technical support in the areas of the “green” economy, skills development and industrial financing by encouraging companies to explore cooperative opportunities in infrastructure projects, such as roads, railways, ports, power generation, airports and housing.
  • The two governments also committed to ensuring enabling conditions to foster cooperation between Chinese and South African energy companies while also considering third-party involvement in energy, electricity, nuclear energy, energy efficiency and energy infrastructure projects.
  • During the recent state visit by President Zuma, both countries agreed to increase trade and investment missions and set up a joint working group to study bilateral trade discrepancies.

South Africa and China are committed to improving the trade balance and encouraging trade in manufactured value-added products.
 

  • South Africa and China cooperate extensively and regularly on trade and investment issues through the Joint Economic and Trade Committee, which is a sectoral committee of the BNC. South Africa and China concluded the Memorandum of Understanding on Promoting Bilateral Trade and Economic Cooperation in 2006.
  • The South Africa-China Partnership for Growth and Development process began in 2007 to balance trade and investment in a sustainable manner.
  • China has become South Africa's largest export destination, with exports to China growing even in the midst of a global recession. In 2009, total trade between China and Africa amounted to over US$ 106 billion, an increase of 45% over the previous year, of which South Africa accounted for 20%. China's imports from Africa amounted to US$ 56 billion, an increase of 54% over the previous year.
  • The trade surplus between the two countries is still in favour of China, although the amount has decreased significantly since 2003. South Africa currently exports raw material to China but imports finished products.
  • China has indicated that it would encourage its enterprises to increase investment in South Africa’s manufacturing industry and promote the creation of value-adding activities in close proximity to the source of raw material.

Firth Group of Twenty (G20) Summit, Seoul, Republic of Korea, 11 to 12 November 2010

The G20 Summit will be hosted by the Republic of Korea in Seoul from 11 to 12 November 2010. The G20 is a coalition of the world’s foremost developed and developing nations. The summit was preceded by a meeting of finance ministers and central bank governors in Gyeongju, Korea, at the end of October.

The G20 Summit is the premier consultative body for international economic cooperation and must become more reflective of and responsive to the needs of the developing regions, which are already mobilising themselves based on similar agendas.
 

  • The G20 is a coalition of the world’s foremost developed and developing nations. It is made up of seven advanced economies, 12 emerging economies and the European Union. Member nations of this body account for over 85% of the world’s gross domestic product and are home to two-thirds of the global population.
  • The G20 was established in 1999 as a forum of finance ministers and central bank governors, to bring together important industrialised and developing economies to discuss key issues in the global economy. The core of the founding mandate was the group’s role to “prevent another regional and global financial crisis”.
  • In 2008/09, the G20 played a key role in responding to the global economic crisis. The decisive and coordinated actions of G20 members helped to boost consumer and business confidence and supported the first signs of economic recovery.
  • South Africa is committed to active participation and policy leadership within the G20. Membership of the G20 gives South Africa the capacity to influence key policies relating to the global economy and to advance African concerns in this key global forum.

South Africa urges G20 members to put the interest of the global economy ahead of narrow short-term national interests.
 

  • Global tensions are rising over currency rates as emerging markets try to fend off a flood of investment funds seeking higher returns and countries scramble to keep the prices of their exports competitive.
  • A collective and coordinated effort is needed globally to ensure sustainable and balanced growth of the world economy. Leaders around the world must act to prevent the recent round of currency devaluations turning into a global currency war.

South Africa’s priority areas within the G20 are shaped by its domestic agenda and development priorities.
 

  • South Africa will promote the need to maintain the momentum in the recovery of the world growth and reduce downside risks to ensure strong, sustainable and balanced growth.
  • The G20 should play an active role in addressing critical development issues, particularly in low-income countries and Sub Saharan Africa, by narrowing the development gap and reducing poverty to achieve strong, sustainable and balanced growth and ensure a more robust and resilient global economy for all.
  • South Africa needs to continue putting pressure on developed countries to mobilise resources to support growth and development. Developing countries should be recognised as equal partners in the development of their economies.
  • The stability of the financial system is a necessity to achieve growth and development. South Africa should utilise its experience in the area of financial regulation and supervision in influencing the outcomes of financial reform in world markets.
  • South Africa continues to focus on the reform of the international financial institutions to ensure that emerging markets and developing countries have greater voice and representation.
  • At their October meeting, the G20 finance ministers agreed to reform the International Monetary Fund (IMF) to increase its role in fostering global monetary cooperation, secure financial stability, facilitate international trade and give emerging nations more say in the governance of the organisation – the biggest reform of IMF governance since the institution was created in 1945.

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Highlights

Trade and industry

The Department of Trade and Industry has launched a new tax incentive, which could see manufacturing businesses reducing their taxable income by as much as R900 million. The incentive, known as the 12i Tax incentive, is "part of an effort to place the economy on a more labour-absorbing path". The incentive also aims to encourage businesses to be more environmentally friendly as well as boost skills development in the country.

Transport
South Africa to commercialise electric car

Initiatives are underway to commercialise a domestically developed electric car. The announcement was made at the G8 Ministerial Conference on Global Environment and Energy in Transport. This is part of South Africa's plan to move towards a low-carbon economy across all modes of transport.

Technology
United States (US) government contract for South African medical isotopes

The South African Nuclear Energy Corporation (Necsa) and its subsidiary, NTP Radioisotopes, have won a R169,4-million US government contract to develop technology for commercial production of the medical isotope molybdenum-99 using "proliferation-resistant" low-enriched uranium. Necsa said the awarding of the contract recognised the fact that South Africa had successfully implemented the world's first large-scale, all low-enriched uranium production of this critical medical isotope.

Crime fighting
Big business supports festive season crime strategy

The Minister of Police, Nathi Mthethwa, National Commissioner General, Bheki Cele, and Gauteng Provincial Commissioner, Mzwandile Petros, have launched the South African Police Service’s Festive Season Operation, dubbed Operation Duty Calls. Business Against Crime South Africa CEO, Dr Graham Wright, conveyed a strong message of support and endorsement for the plan.

Sport
Banyana make South Africa proud

Banyana Banyana’s outstanding performance in the African Women’s Championship so far has boosted the confidence of the South African national women’s soccer team and made South Africans proud. This may not only give the team a passage to the finals but also book them a place in the 2011 FIFA Women’s World Cup in Germany.

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