The recent visit by the Chinese leadership has once again highlighted the economic interest that China has in Africa. How these economic ties will benefit the local economy remains to be seen. The best way to get a sense of the future is to look at what has been achieved so far.
Enter Hisense, and you get a sense of the future economic benefits from the China-South Africa economic relations.
Chinese consumer electronics company Hisense officially opened a R350-million electronics factory in South Africa in 2013.
Hisense started in Atlantis, (Western Cape) by manufacturing flat-screen televisions and refrigerators at the plant, recruiting and training 300 previously unemployed citizens. At the time the company planned to double the size of the factory over the next few years, and increase its staff complement to 1 000 people, with a view to extending production to washing machines, air conditioning units and, possibly, wine coolers and coffee machines.
During this period the factory was one of only five established by the company outside of China – to produce its goods for local consumption to begin with, but ultimately export into other parts of Africa.
Speaking at the opening of the factory in 2013 Minister of Economic Development Ebrahim Patel had this to say – “this factory brings hope that the burden of poverty and unemployment that ravaged the people of this area for years can be reversed”.
The establishment of this factory was also in line with national economic objectives as highlighted by the Minister at the time – “Nationally, it helps us to realise our vision of re-industrialising the South African economy and strengthening the manufacturing sector”.
This investment has yielded positive returns for Hisense based on recent disclosure of figures to Premier Helen Zille and Minister of Economic Opportunities Alan Winde during the Western Cape Government’s trade mission to China last month.
Alan Winde, Minister of Economic Opportunities, said new figures from Hisense showed that productivity at its Western Cape plant was sky-rocketing.
“Hisense built their initial investment on the daily production of 350 refrigerators and 750 fridges. The daily output of Hisense in the province now stands at 1 700 televisions and 1200 refrigerators. Through innovation and continued training, they have been able to drive this phenomenal growth.
“Hisense has production facilities across the world and the Western Cape is on par with the best of these. In terms of market share, Hisense is now ranked second in South Africa on sales of televisions and refrigerators. Last year, the value of their exports to our neighbouring countries was worth over US $ 10 million. The message to Chinese companies is clear: invest in the Western Cape and your productivity and revenue will increase.”
Minister Winde said Chinese businesses have also identified the Western Cape’s renewable energy sector as a key investment opportunity.
Hisense is a good example of the positive impact the China-South Africa Economic relationship will have in the African continent. Similar type investments will only add value to the African economic landscape.
What remains to be seen is whether African companies will also have an opportunity to setup their entities in China….