Beijing Review: Would you please comment on the 10-year development of the bilateral relations between China and South Africa?

Dave Malcomson: I think it's wonderful that at the end of September we held the third meeting of the Bi-National Commission between South Africa and China since we established diplomatic relations.

Our delegation was led by our deputy president and was met by your vice president. We had about 150 people who came with the deputy president.

During the discussions in the Bi-National Commission, it was agreed by both sides that our bilateral relationship has been developing very well. Both sides expressed satisfaction with the bilateral relationship, which covers all sectors. So we have a sound political and economic relationship, as well as in other sectors-culture, sport affairs, forestry, science, technology, etc-covering the full spectrum of activities between our countries.

Obviously, there are some pragmatic ways that we can deepen our bilateral relationship. In 2004, we identified each other as strategic partners, and we are looking at how to go forward in the next 10 years and see how to deepen our strategic relationship.

There are three things that the South African cabinet has taken a decision on, in terms of marketing South Africa in China for the next three years. The first is to have a comprehensive program in China from the beginning to the end of next year to celebrate the 10th anniversary of our diplomatic relations. Secondly, we've announced that we will participate in the Shanghai 2010 World Expo, making sure we will represent South Africa perfectly as a business partner to the Chinese people and showing that South Africa has a modern and vibrant economy that China can do business with. In terms of the third area, we agreed we will establish something called the Partnership for Growth and Development, which will take our economic relationship to a much higher level. At the moment, the trade balance between our two countries is in favor of China. The investment was in favor of South Africa's investment into China. That investment pattern changed recently when the Industrial and Commercial Bank of China (ICBC) invested in [South African] Standard Bank-the 20 percent stock they bought for $5.5 billion.

Now, obviously China is the greater investor. But actually, what the partnership should do is to look into the Chinese economy: what needs of the Chinese economy can the South African economy fulfill, and what can South Africa supply to the Chinese economy? At the moment we may be exporting raw materials and commodities to China, so we would look to higher value-added commodities, and to work with China, both in manufacturing and beneficiation. So it's quite an extensive program that we are looking at-matching the needs of the Chinese economy with what the South African economy can currently supply, and working together to ensure that South Africa can also add value to the products coming to China and put them at the higher end.

So we are happy with our relationship with China. We are happy that China has paid a number of high-level visits to South Africa. The Chinese president, premier, a number of ministers and delegations have been to South Africa. Similarly, the South African President [Thabo] Mbeki, deputy presidents and other ministers have also been to China. At the political level, we are doing very well. Moreover, the party-to-party level exchanges are satisfying. Politically and in any other way, I think the relationship can be seen as a strategic partnership and is mutually beneficial to both sides.

What are your expectations for the future cooperation between the two countries in the economic and trade sectors?

Clearly, the trade relationship is healthy, and has grown from almost a zero base 10 years ago to over 60 billion rand (about $8.55 billion) in 2006. But as I've said, that has been from quite a narrow base of what South Africa exports to China, mainly in the areas of minerals and commodities. So what we are trying to do is to broaden that base to make it also include high value-added products, and for China to assist us in beneficiating products in South Africa, so that they can be sold on to China.

Equally I think that it is in accordance with the thrust of China to look at your overall trade imbalances and try to make sure that you import more from your partners like South Africa. Certainly, the key factors there will be the Partnership for Growth and Development.

What sectors do you think need improving?

In the Bi-National Commission, they specifically identified energy, infrastructure, machinery, home appliances, agro-processing, tourism and finance. The South African cabinet also listed the following priority sectors for investment, such as chemicals, mineral beneficiation, agro-processing, business process outsourcing, tourism, arts and crafts, automotives, aerospace, marine and rail transport. So there are a number of sectors that we are exploring.

Your Ministry of Commerce and our Department of Trade and Industry are working hard together to make sure that we have some growth in those sectors, both in terms of Chinese investment in these sectors of South Africa, as well as Chinese procurement of those types of high-end products from South Africa.

How does South Africa's role in the continent impact Sino-African relations?

What we see is that we are a part of various continental arrangements, where we all interact with each other as equals. In that context, we are obviously a member of the African Union; we participate in the regional arrangement of the Southern African Development Community; we are also committed to the implementation of the continental development program, the New Partnership for Africa's Development (NEPAD).

Whenever we interact with China bilaterally, we always have on the agenda, the issues of continental cooperation where China can assist in helping regional integration and in implementing NEPAD. The discussion has also been taken to other arenas. For example, at the moment we serve with China in the United Nations Security Council, and we are also lucky enough to be invited to the G8 Summit, along with China, Brazil, Mexico and India as the "plus five" partners. In those forums, G8+5 and UN Security Council, we also have ongoing discussions with China on how to implement the NEPAD program and how China can assist in implementing Africa's agenda, which also covers Africa's security, resolutions of conflicts, governance issues and so on.

Certainly, with the steps China has taken of appointing a special envoy to Africa, sending peacekeepers to Africa, working with us in the Security Council on African issues, we value these things very much in terms of supporting the development of Africa. As I said, we used all these opportunities, bilateral and multilateral, to talk to our Chinese partners on how they can assist the overall development of the continent.

What is the present scenario for Chinese language learning in your country?

I think it is getting healthier. At the moment, we have one functioning Confucius Institute at the University of Stellenbosch, and that has been running for a couple of years now. There are three teachers from China. There was an announcement that the second Confucius Institute is being established in Pretoria. I know the Chinese Embassy in Pretoria is working hard with all our universities to see where and how other Confucius Institutes may be planned.

There was also an agreement during the Bi-National Commission, between our two ministers of education, that we will be running a pilot project in South Africa of 50 schools offering mandarin as the language of instruction. So I think that is a positive development.

In recent years, we have seen an increasing number of South African enterprises invest in China. How do you view China's investment environment?

Obviously, the Chinese investment environment must be attractive because you are the largest recipient of direct foreign investment in the world. There are a number of South African enterprises that have invested in China. On the whole, they are satisfied with their investment. Many of them are making good returns from their investments. Having said that, there are some that still need some work; and there are one or two that still have problems in their investment.

In general, I think China does provide a favorable investment environment, and it certainly provides opportunities for South African investors. I think the encouraging fact is that, from China's side, South Africa provides an equally sound investment environment. There is recognition that we also have a good environment in place for Chinese investors.

ICBC's investment in Standard Bank of South Africa that I mentioned earlier, China's biggest investment abroad to date, shows the faith and confidence China has in the South African economy. That means our environment for investment, as well as our economic fundamentals, are sound. That is an encouraging development, as South Africans have come to invest in China and now Chinese investors are putting a sizable amount of money into the South African economy.