JOHANNESBURG—China’s President Xi Jinping and South African President Jacob Zuma agreed to $ 6.5 billion in new investments in between their two nations as the world’s second-most significant economic system seeks to persuade Africa that slowing expansion won’t limit its engagement on the continent.
“We agreed that much more can and should be carried out to improve our trade and expense figures,” Mr. Zuma stated right after assembly with Mr. Xi and ministers from equally countries at his offices in Pretoria. “Relations among China and South Africa are presently at their ideal levels at any time,” he said.
Mr. Xi’s remarks to the modest group of reporters gathered in Pretoria weren’t translated for reporters.
A gunfire salute and brass band greeted Mr. Xi on Wednesday as he arrived in South Africa for 4 days of meetings with Mr. Zuma and other leaders that could yield billions of dollars in new funding for the continent.
China is anticipated to use the go to to reassure South Africa that its motivation to the world’s poorest continent is sturdy even with a international commodity slump emanating from China’s own slowing progress.
Certainly, China’s slackening demand for Africa’s oil, copper and iron ore is weighing heavily on the continent’s prime economies. Commodity powerhouses Nigeria, Angola, South Africa and Zambia have viewed progress and currencies plummet this calendar year as product sales to China, Africa’s leading trading associate, cooled. China’s Ministry of Commerce mentioned in November that Chinese investment in Africa dropped forty% in the initial 6 months of this yr.
Mr. Xi and the army of bureaucrats accompanying him are making an attempt to paint a rosier photograph of China’s engagement in Africa. In advance of the journey, Chinese and South African firms introduced $ 930 million in investments in steel, power, pharmaceutical and other sectors.
For the duration of his 1st stop—in Zimbabwe Monday and Tuesday—Mr. Xi and Zimbabwe’s President Robert Mugabe signed a dozen bargains like $ 1 billion to grow a thermal energy station currently being developed by China’s Sinohydro Corp.
At Mr. Zuma’s workplaces in Pretoria on Wednesday, South Africa’s state-owned rail operator acknowledged $ 2.5 billion in financing to purchase locomotives and other equipment from Chinese companies.
These kinds of agreements present how China hopes to turn from purchasing Africa’s minerals to financing infrastructure initiatives that will produce profits and employment back again in China, said Kai Gue, a Beijing-based mostly law firm who advises Chinese companies functioning in Africa.
He uncertainties the method can work.
“There’s so a lot saturation presently,” Mr. Gue explained, noting that 50 % of the engineering operate in Africa final yr was accomplished by Chinese firms: “What much more can be received?”
For Mr. Zuma, Mr. Xi’s check out is an possibility to tout South Africa’s pre-eminence as a gateway to undertaking company on the continent. South Africa’s membership since 2010 in the Brics club of rising economies—which also involves Brazil, Russia and India—has also assisted placement Mr. Zuma as an ambassador for investment in Africa.
But tighter ties to the world’s most significant creating markets also pose dangers to South Africa’s small and fairly moribund financial system. South Africa trades far more with China than any other region, which includes a record $ 60 billion in 2014. But South Africa also operates a more substantial trade deficit with China than any other region, exhibiting how a beleaguered manufacturing sector here has not been capable to outdo China’s low cost machinery and items.
Mr. Zuma mentioned agreements attained on Wednesday would assist handle that deficit, which includes special financial zones he mentioned China would aid develop in South Africa.
“I think this will contribute to addressing the composition of our bilateral trade as nicely as the industrialization of our economic climate,” Mr. Zuma explained.
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