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Business Week Interviews Ambassador Liu Guijin(excerpts)

On July 12, 2006, His Excellency Liu Guijin, China's Ambassador to South Africa, received an exclusive interview with Frederic Schmilive and Grisel Rovira from Business Week, the US-based worldwide financial magazine. Excerpts are as follows.

Business Week: Thank you very much for the exclusive interview, Ambassador. First question, what is your evaluation of Premier Wen's visit to South Africa last month?

Ambassador Liu: Premier Wen's visit to South Africa, the first ever official visit to this country by a Chinese premier, was highly significant, successful, and fruitful.

During his visit, Premier Wen met with President Mbeki, Vice President Ngcuka and Chairman of National Council of Provinces. The Premier and the President co-signed the important document entitled Program of Cooperation on Deepening Strategic Partnership between the Government of the People's Republic of China and the Government of the Republic of South Africa, which outlines a blueprint for cooperation between the two governments in the coming years. Priority areas set in the Program of Cooperation include the exchange of high level visits, further cooperation on international issues, and China's commitment to supporting South Africa in its ASGISA program particularly JIPSA. Our government committed a RMB20 million (US$2.5 million) donation to be used on human resources development in South Africa such as training engineers and artisans in construction sector so as to create more jobs.

After their official talks, the Premier and the President witnessed the signing of 13 agreements and MOUs between the two governments covering a wide range of areas such as investment, textiles, forestry, health, science and technology and trade of certain commodities. On the occasion of Premier Wen's historical visit, China's Shenhua Group and SASOL Group signed an agreement on starting the second phase of feasibility studies for the joint venture in China using Coal-to-Liquid technology.

Premier Wen attended China-South Africa Business Forum together with Vice President Ngcuka and each made a keynote speech. The Premier also met the CEO of the Secretariat of the New Partnership for Africa's Development (NEPAD) to show China's willingness to help African countries implement NEPAD projects. The Chinese side announced a donation of half a million US dollars to NEPAD secretariat to be used to launch two pilot projects in Kenya and Tanzania to train nurses and midwives.

Business Week: Chinese investment in South Africa is amount to US$250 million. What's the prospect in the coming years?

Ambassador Liu: It is true that we have invested US$250 million here in South Africa, but that's only investment from the parastatals. The figure of the Chinese private sector's investment here is not included. There is a Chinese community of about 100,000 strong in South Africa. Many of them are operating small businesses. If we include their investment, the figure might be doubled. We don't have the exact figures about that yet. Our government sincerely encourages Chinese entrepreneurs to come here to run joint ventures or to invest in certain sectors. Investment from China mainly focused on mineral sector and electronic appliance like TV, refrigerator, and washing machine.

Personally I believe that Chinese investment in South Africa will definitely increase in the coming years, concentrating with mineral and IT as principal recipient sectors. Currently China's IT giants Huawei Technology and ZTE Technology have already made a presence here. Commercial sectors and services will also be major areas attracting Chinese investment.

Business Week: What is the knowledge China and South African can share concerning the preparation of Olympics 2008 and World Cup 2010?

Ambassador Liu: The Chinese side is willing to share our experiences in preparing 2008 Olympics and our experience in building infrastructures. Actually we have invited the Minister of Sports and Recreation to visit China. And the Deputy Minister of Public Works of South Africa visited China a few weeks ago. We have already started that kind of interaction to share our experiences with South Africa. We are also exploring the possibility that we could contribute to certain extent to the infrastructure construction here with regard to the 2010 World Cup. A Deputy Minister of Construction of China led a business delegation to visit South Africa just last week. They met with South African business people and were exploring that possibility of getting involved. We are willing to hear suggestions from South African side too. On the whole, it's only in a very initial stage. Nothing concrete has come out yet. But the political will is there. And I hope there might be some tangible cooperation on this field. As you know, China is well ahead of timetable in having the infrastructure ready for the 2008 Olympic Games.

Business Week: What is the image of South Africa in China?

Ambassador Liu: Well, that is a good question. You know that China and South Africa established diplomatic relations only roughly 8 years ago. Before that during the apartheid era the Chinese government and people were firm in supporting South African people against the apartheid rule. We had neither official contacts nor trade relations with that country during its apartheid era. Though we have achieved a lot in the past 8 years, generally speaking there is still a lack of deep mutual understanding of each other. One of the priorities for the two governments is to enhance mutual understanding. President Mbeki personally acknowledged this when he and Premier Wen jointly met the press during the Premier's visit.

What the general public in China know about South Africa may be: a new democracy, beautiful landscape, the Table Mountain, Cape of Good Hope, and the biggest economy in Africa.

But to be frank, the security concern has become more or less a sensitive issue for the resident Chinese here and the Chinese investors. Because whenever someone lost his or her life there will be reports in Chinese local media.

Our government officials are trying hard to give a comprehensive picture of South Africa to Chinese people. Whenever I am interviewed, I would say there's still room for improvement in safety and security situation in South Africa, and the government is doing a lot to combat crime to address the issue. At the same time, I also would say, although a few Chinese citizen lost their lives here, but these belong to normal criminal cases. The Chinese communities are not specifically targeted at. This country is not the main target of international terrorists. The political situation is stable. This is a mature democracy, a country ruled by law. The government is visionary. And the country has got good infrastructure. I think all these are strong points of South Africa when we talk about the general situation of investment environment here.

Business Week: We believe the November Beijing Summit will better China-Africa relations. What do you think is the outcome of the Summit?

Ambassador Liu: The Summit has received a very warm welcome from African countries. We expect that there will be a great number of heads of state, heads of government from Africa to attend. President Mbeki has written formally to our President Hu jintao confirming that he will personally lead a delegation to attend the November Summit.

At the moment, the Chinese side and African countries are discussing the documents to be released on the occasion of the November Beijing Summit. The documents will cover a wide range of fields. So far as I know, one priority might be that the Chinese government is going to take concrete measures to encourage Chinese companies to invest more in Africa. Secondly, we are going to spend more on human resource development in Africa, which means that we are going to train more people to get skills in African countries, even to train the trainers. And also we expect more cooperation in agriculture, infrastructure, education, health, and human resources development. I think these might be major areas that produce tangible results.

Business Week: Regarding the investment environment about South Africa, if you had a message that you would like to give to our more than half a million readers, which one would it be?

Ambassador Liu: As China's ambassador to South Africa who has spent more than five years here, I would like to say that South Africa is a good place to invest. I have some reasons. One is that it's the biggest economy in Africa. Its GDP last year reached US$240 billion, which is more than a quarter of Africa's total GDP. The market is big. Secondly, this country has got good infrastructure, in African terms at least. It has good airports, good seaports, good highways, and convenient transportation, communication. Thirdly, this country is ruled by law. It has quite well developed legal system to protect business interests. Fourthly, this country is politically stable. It's a democratic society. Fifthly, although this country needs to improve its security situation, it's not a target of international terrorism, it's not a spot of armed bloody conflicts, and doesn't have big religious problems like in some other countries. So generally speaking this is a peaceful, tranquil, politically stable society. Another reason is that this country is rich in mineral resources and also human resources. In a word, South Africa is a good place to invest.

Thank you.

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