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BAIC boss confident tariff war won't deter SA-China deal

Jul 24 2018 21:03
Carin Smith and Khulekani Magubane

Port Elizabeth – Trade tensions between the United States and China are unlikely to deter beneficial deals such as the BAIC auto plant launched in Coega, outside Port Elizabeth, on Tuesday, South African and Chinese industrial leaders have said.

Fin24 asked BAIC International chair Xu Heyi for his view of the potential impact of the developing trade war between the US and China on joint ventures like the one BAIC has launched in SA.

Xu said: "The so-called trade war between China and the US actually does not impact BAIC. We do not have [many] dealings with US enterprises. We have a rich tradition of working with South Korean and European companies.

"We don’t really see the US as our export market. There need be no worry about the trade war impacting our collaboration with the IDC (Industrial Development Corporation) in SA."

The new BAIC auto manufacturing plant in Coega can be seen as a poster child for President Cyril Ramaphosa's 'new dawn' for South Africa, added Busi Mabuza, chair of the IDC.

Mabuza was speaking at the official launch on Tuesday.

The plant, based in Coega Industrial Development Zone, is creating jobs through manufacturing – about 1 500 jobs in the first phase, with the aim of an additional 2 500 by completion of the construction phase.

Mabuza said Ramaphosa had identified the need to attract investment to spur economic growth.

"This joint venture shows what can be achieved by working hand-in-hand with partners like BAIC.

"We expect a positive spin-off, also for local and foreign suppliers, to feed and promote meaningful economic participation through small enterprises, to promote the transfer of ownership and revitalise the manufacturing industry.

"When [the plant] is fully operational it will have 65% local content," said Mabuza.

"It shows how industrial policy and incentives are interlinked in a puzzle for each piece to work in unison to complete a picture."

Xu said the joint venture's progress showed the pragmatic advantage of the Brics movement.

"South Africa is a shining pole in the southern most part of Africa – a fertile land of hope and dreams," he said.

He praised the high degree of support for the project from the Coega IDZ and the IDC. "We fought side by side to conquer challenges," he said.

He sees the project as part of the next phase of industrialisation in SA.

"The next phase of Brics has a golden future. The joint venture deepens the solidarity and trust between SA and China. This year marks the 20th anniversary of diplomatic relations between SA and China."

He said that it would deliver benefits for both countries by making use of market opportunities through research and innovation.

"As long as there remains this strategic mutual trust between South Africa and China, this BAIC project can be like a golden business card for cooperation between the two countries in a new era."

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