Most of the African infrastructures are constructed courtesy of the Chinese government. The Chinese government is trying as much as they can to make good use of the vast African markets.
Chinese vehicle manufacturer Beijing Automotive Group’s (BAIC’s) has decided to invest in vehicle assembly plant in Coega Industrial Development Zone (IDZ), near Port Elizabeth. This could be a big help in enhancing investment by the Chinese firms in South Africa. Thandukwazi Nyawose, an economic counselor who is in the South African Embassy in Beijing China, said that BAIC project was the largest Chinese investments in South Africa.
Nyawose said that China has more than $300 trillion dollars reserved for foreign countries’ investments and China hopes that the BAIC will kick-start mega projects investments in Africa. The current credit downgrade by Standard & Poor’s (S&P’s) would negatively affect Foreign Direct Investments (FDI) from countries that want to invest there though that won't affects FDI from China. China was planning to set up their rating agency which will compliment S&P’s, Moody’s and Fitch.
Seth Mompei, the first secretary of South African Embassy economic lauded the move and said that the grouping of the countries could improve the growth of bilateral investments. Seth, later on, added that South Africa had a mature automotive market that would benefit from investment by the Chinese firm. The investment will create more employment opportunities given the fact that most people have been losing jobs due to the withdrawal of some companies from the country.
The initiative is a joint venture between BAIC and South African’s Industrial Development Corporation. At full capacity the plant will be able to produce 100,000 vehicles annually. The first phase will have the capacity to assemble 50,000 vehicles per year. About two-thirds of the units will be exported.