Working with China could transform the Eastern Cape from being one of the poorest provinces in the country into a diverse economy with improved employment levels and prospects.

This is the view of economists and politicians in reaction to an increased Chinese business presence in the province recently.

In July this year, a Chinese company opened a diamond polishing plant in the East London Industrial Development Zone (Elidz);

This month, an agreement was signed with a leading Chinese solar energy company to build a 100MW photovoltaic facility within the boundaries of Buffalo City Municipality; and

Last week, a Chinese delegation came to the Elidz to present their idea of establishing a sweater factory in partnership with local entrepreneurs.

"The Eastern Cape is the hidden opportunity at the moment," economist Mike Schussler said.

"We've got two cities here, two airports, three harbours, a great climate, good infrastructure and the province is between the three economic hubs - Durban, Cape Town and Gauteng. (The Chinese) might see the Eastern Cape as a springboard to the rest of South Africa where there is not too much competition and where they can be close to the coast."

As South Africa's largest trade partner, the Chinese have been increasingly visible and on the radar - especially since President Jacob Zuma's visit to China in August this year.

Eastern Cape Socio Economic Consultative Council director Andrew Murray explained that the relationship South Africa has with China is critical to the growth of this country.

And as long as Chinese investors work within South African labour and environmental laws, South Africa will benefit from a partnership with them.

At the moment, China exports finished products to South Africa while importing raw materials.

Trade agreements between the two countries are moving the model closer to bringing Chinese factories and expertise onto South African soil - closer to the resources.

"It's not a negative that China is coming here," Murray said.

"They bring with them technology, expertise and investment. Their companies will create jobs. From a balance of trade perspective, we need this. Also, if China wasn't growing we would be in big trouble because it is their demand for commodities that has helped us recover post-recession."

Last week, a Chinese delegation presented a plan to replicate a sweater model in the Elidz.

The idea is for Chinese company Jiaxing Zhiyuan Import and Export Co Ltd, led by company president Xu Wei, to build a pilot project where half-finished textile products are imported, to be finished by local entrepreneurs who would set up their own factories close by.

Wei told the Dispatch this concept was a "win-win" for the Eastern Cape and for investors.

"It is definitely beneficial for both because when Chinese companies come here we have the opportunity to grow together, not to grow separately," he said.

"We can work together to export to Africa and to the rest of the world. We want the Chinese textile industry to work with South Africa to make them both competitive."

This is in contrast to previous Chinese actions, where cheap Chinese imports literally decimated the local textile industry.

In the Eastern Cape, Da Gama and Castellano-Beltrame are just two examples where cheap Chinese imports have either severely knocked business, or caused the company to fold altogether, unable to compete price-wise.

The major reason for this is the cheap labour in China.

"The damage they inflicted on our textile industry was devastating," Schussler said.

"But in China, now labour is becoming more expensive due to a clampdown on human rights abuses. (They) will lose their advantage over time."

Provincial Economic Development MEC Mcebisi Jonas said last week at the IDZ that while models as presented by Wei were welcomed and would be given serious thought, there were challenges that must be overcome first.

"China is the biggest player in terms of trade. Everyone recognises this ... and it offers us the potential to grow our own industry. The danger is that in strengthening trade we don't want to undermine local production."

Department of Trade and Industry gender and empowerment chief executive Bongi Ludidi said: "The relationship between the two countries should be mutually beneficial. At the moment, the trade balance favours China. Let's get the system working so it's beneficial to both."