Eastern Cape’s abundant agricultural land has seen China survey the province for farming business opportunities to supplement its food needs in the face of its scarce land resources.

The imminent opening of the Shanghai Yebo Africa Trading Hall (ATH) which is intended to facilitate trade between Africa and China is set to expand opportunities for Eastern Cape business to trade with China, says Eastern Cape Development Corporation (ECDC).

ATH is an entity formed by Chinese business in conjunction with that country’s government, with the aim of facilitating trade between Africa and China.

An ECDC-led trip to Shanghai business expo, the biggest exhibition of its kind for marketers, buyers and business stakeholders from all over the world, has laid the ground work for future Chinese investment in the Eastern Cape.

A number of leads have been identified and mooted, says ECDC agriculture sector manager Mlamli Nodada, but a project on the table that can be run immediately is pomelo production in the Eastern Cape.  

China’s ATH is in talks with Alfred Nzo Development Agency (ANDA) to supply land for cultivation. Pomelo is a type of the citrus variety, popular in the United States and Asia for nutritional properties.

ATH formed to facilitate trade with China

ATH is a new entity formed Chinese business in connection with that country’s government, with the aim of facilitation trade between Africa and China.

Nodada says the Chinese have developed a unique variety of pomelo. Africa Trading Hall has forged a partnership with the Eastern Cape Alfred Nzo Development Agency (ANDA) to grow the cultivar in the Eastern Cape for export to the United States market.

“ANDA has signed an agreement for pomelo reproduction and as ECDC we are working with ANDA,”Nodada says.

“Once the new pomelo cultivar passes all the scientific control checks which are done in a laboratory in Uitenhage, work can start on a minimum of 500 hectares of land within the municipality.”

Nodada says a number of opportunities had surfaced with the Chinese counterparts showing interest in other Eastern Cape products such as mohair, ostrich leather, seafood and crafts among others.

EC could capitalize on its competitive advantage

ECDC development services executive manager, Noludwe Ncokazi says EC business could benefit from trade with China, if it capitalised on its own competitive advantage.

China is setting the pace for manufacturing of clothing and electronic goods. Its cheap labour and high productivity enable it to achieve almost unrivalled efficiency and undercut prices because costs are kept to a minimum.

That efficiency has catapulted the government controlled economy into the enviable position of the fastest growing economy over the past few years. And the demands of a growing economy with increasing wealth have enjoyed a corresponding organic growth, says Ncokazi.

“While China clothes us, we could feed China. We have vast areas of arable agricultural land and can produce food to feed its growing market. China has a population of over 1, 2 billion and the business community should take advantage of business opportunities that the Chinese market present,” she says.

This comes at a time when the provincial government promotes the development of the Eastern Cape economy through agricultural and agro-processing investments.

ATH president Celina Zheng says that the ATH would open its doors for trade in March 2011. Zheng adds that she sees the Eastern Cape as the province that offers the most investment opportunities for China, especially in agriculture.

Construction of the 30 000 square metre facility in Shanghai was completed in a space of 14 months in September 2010.

African traders could use ATH to market to the world

Zheng says the ATH presents a window of opportunity for business in the Eastern Cape and in South Africa to trade with China. African traders can also market their products to the rest of the world through the ATH, says Zheng.

The opportunity is likely to bring in millions in investment and job creation opportunities.

Nodada says the aquaculture sector also stands to benefit more from trade with China in the near future as there is high demand for seafood in that country.

Private sector needs to coordinate trading with China

Government entities and the private sector need a coordinated approach in trading with China, Nodada adds.

“The Chinese are coordinated in the way they deal with international trade because they are a state run economy. So we need a coordinated approach in trading with them. We have set up a forum which includes East London IDZ, AsgiSA Eastern Cape (EC), Eastern Cape Socio Economic Consultative Council (ECSECC) and ECDC and we would like the private sector to come on board,” says Nodada.

“If our business community comes across as fragmented, it will be an easy target for bargaining.”