Is Chinese Investment In South Africa Shifting From Mining To Property?
16 May 2014
by Dana Sanchez
CAPE TOWN, South Africa—Each sparkly green television motherboard that rolls off the Hisense Co. factory line here moves China a tiny step toward a new global manufacturing base.
In the past year there’s been a big shift in Chinese investment in South Africa from mining to property, SouthChinaMorningPost reports.
Raw materials have been the vast majority of South African exports to China, said Rob Davies, South African Trade and Industry Minister. And the vast majority of imports from China to South Africa have been manufactured goods.
China has been South Africa’s largest trading partner since 2009. Bilateral trade in 2013 was to the tune of 270 billion rand, according to the report.
“We have seen a new trend of Chinese firms investing in manufacturing facilities in South Africa with a view to supplying the local market,” said Martyn Davies, CEO of Frontier Advisory, a South African business consultancy.
China’s Zendai bought 1,600 hectares of land Nov. 4 from AECI, a Johannesburg-listed company, for 1.06 billion rand in the Modderfontein area.
Zendai said it plans to develop a mixed-use project including residential, commercial, light industrial and retail.
Modderfontein New City will have 84 billion rand of investment, including 3 billion rand of infrastructure spending in the next three years, Zendai chairman Dai Zhikang said at a news news conference.
Construction is expected to begin in 2015 and take at least 15 years to complete, South African media reported.
“Zendai’s project is the biggest ever mixed-use property investment in South Africa,” said Tebogo Lefifi, China country manager of Brand South Africa, the official branding agency. “We have never had anything on that scale. It’s going to be a mini city. You’re looking at more than 100,000 residents and over 10,000 jobs.”
In 2013, Perfect (China), a maker of health foods and personal care products, made the first Chinese investment in South Africa’s wine industry, buying the Val de Vie estate in a deal expected to boost exports of South African wine to East Asia, according to Brand South Africa’s information portal, SouthAfrica.info.
Perfect (China) bought the 25-hectare wine estate including 21 hectares of vineyards, a house and wine cellar – through its 51-percent share in Perfect Wines of South Africa, a joint venture with South African winemaker Hein Koegelenberg.
“The wine market is growing in China. China is getting more aware of South African wine brands,” Lefifi said.
“The movement of Chinese manufacturers into South Africa is an important emerging trend in Sino-South Africa ties,” Davies said. “The nature of the new wave of investment into manufacturing is creating (jobs) and adding (value) to the economy.”
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