BAIC’s assembly project boosts China’s investment footprint in SA
Chinese vehicle manufacturer Beijing Automotive Group’s (BAIC’s) decision to invest in a vehicle assembly plant in the Coega Industrial Development Zone (IDZ), near Port Elizabeth, could help drive further investment by Chinese firms in South Africa.
This is according to Thandukwazi Nyawose, economic counsellor at the South African embassy in Beijing, who pointed out last month that the BAIC project was the biggest Chinese investment in South Africa to date.
“China has more than $300-trillion dollars of foreign currency reserves and, therefore, has sufficient funds to invest even more into South Africa. South Africa is a new market for Chinese investments and we hope the BAIC project will kick-start a deluge of further megaproject investments,” he told Engineering News during a tour of BAIC’s head office in Beijing.
Nyawose further noted that the country’s recent credit rating downgrade by S&P Global Ratings would negatively affect foreign direct investment (FDI) from countries wanting to invest into South Africa; however, this would most likely not deter FDI from China.
He pointed out that China was setting up its own ratings agency which would complement S&P’s, Moody’s and Fitch Ratings.
“We want to reassure Chinese investors that South Africa is an attractive destination for investors.”
South African embassy economic first secretary Seth Mompei, meanwhile, said both countries’ membership of the Brazil, Russia, India, China and South Africa grouping, or Brics, could play a role in growing bilateral investment.
He added that South Africa had a mature automotive market that would benefit from investment by Chinese firms.
Further, BAIC’s investment would bring stability to the automotive sector, which recently saw a big automotive company, General Motors, exit the country.
Mompei noted that Chinese manufacturers’ investment in the South African automotive industry could help offset potential job losses as a result of other manufacturers pulling out of the country.
He added that it would also have a trickle-down effect into other areas of the manufacturing sector.
Nyawose stated that many South African small, medium-sized and microenterprises, especially those owned by people from previously disadvantaged backgrounds, would benefit from the BAIC investment.
“It will also serve to increase the level of skills in the country among our emerging industrialists,” he noted.
The R11-billion automotive assembly plant being established at the Coega IDZ is a joint venture between BAIC and South Africa’s Industrial Development Corporation.
At full capacity, the plant will have the capacity to produce 100 000 vehicles a year.
The first phase will have the installed capacity to assemble 50 000 units a year.
About two-thirds of production will be exported.
BAIC will assemble the D20 hatchback and sedan range, as well as the X25 sports utility vehicle, in South Africa.
Comments
Press Office
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation