China, S. Africa ink $2.5 billion in deals in Dalai Lama's shadow

BEIJING Thu Sep 29, 2011 10:52am EDT

Chinese Vice President Xi Jinping (R) and South Africa's Vice President Kgalema Motlanthe listen to the national anthems during a welcoming ceremony inside the Great Hall of the People in Beijing, China September 28, 2011. REUTERS/ Feng Li/Pool

Chinese Vice President Xi Jinping (R) and South Africa's Vice President Kgalema Motlanthe listen to the national anthems during a welcoming ceremony inside the Great Hall of the People in Beijing, China September 28, 2011.

Credit: Reuters/ Feng Li/Pool

BEIJING (Reuters) - China has agreed to $2.5 billion in investment projects with South Africa, the African nation's deputy president said on Thursday, on a three-day trip to China during which he brushed off controversy over a potential visit by the Dalai Lama.

Deputy President Kgalema Motlanthe said the agreement was made between the Development Bank of South Africa and China Development Bank, and that the two countries had also signed a memorandum of understanding on "geology and mineral resources".

South Africa exports about $5.5 billion a year in minerals to China, and Africa's largest economy has increasingly been a destination for Chinese foreign direct investment. Motlanthe provided few details on the investment plans.

"This financial cooperation agreement is between development banks and the specific projects in which they are going to invest, they still have to identify these projects," Motlanthe told a small news conference.

Motlanthe said the deals were intended to "strike a healthy balance" in trade volume between the two countries.

"To that end, the difference is, instead of just exporting these minerals as raw materials, there will be ... value add to create jobs on both sides," he said. He is due to meet with China's President Hu Jintao on Friday.

China last year invited South Africa to join the BRIC grouping, a diplomatic coup for President Jacob Zuma. It was seen by analysts as a Chinese stamp of approval for the country's role as a stepping stone to the African continent.

TRADE, NOT TIBET

Motlanthe's trip has been slightly overshadowed by a potential visit to South Africa by exiled Tibetan spiritual leader the Dalai Lama, a man China reviles as a separatist and whom it repeatedly warns other countries not to receive.

South Africa has not yet decided whether to allow a visit by the Nobel Peace Laureate, who was invited by Archbishop Desmond Tutu to attend his 80th birthday celebration in early October.

The Dalai Lama, once embraced as a beacon of peace in South Africa when apartheid ended, has become a diplomatic headache for the country as its economic fortunes are increasingly linked to China.

Tutu said in a statement the manner in which the visa application was dealt with was reminiscent of the way authorities dealt with applications by black South Africans for travel under apartheid.

"It would have been much more respectful to have received a negative answer, than no answer at all," said Nomfudo Walaza, chief executive officer of the Desmond Tutu Foundation.

Motlanthe made clear that his visit to China, which included a meeting with China's Vice President Xi Jinping, was aimed at bolstering economic ties, deflecting questions about the exiled Tibetan monk. He did not say whether the issue had been raised in meetings with Chinese officials.

The Dalai Lama rejects China's charges that he espouses violence and denies seeking independence for Tibet, saying he wants a peaceful transition to autonomy for his remote homeland which China has ruled since 1950 with an iron fist.

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