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On October 9, Top South African and Chinese labour officials met in Cape Town to sign an extension to the 2002 memorandum of understanding (MoU) regarding labour.

The 2002 memorandum entails, among other things, the exchange of visits at the ministerial and senior official level for material on human resource development and employment creation strategies, as well as study tour groups in specialised fields.

The discussions between the two ministers focused on human resources development, job creation strategies, trade, skills empowerment and cooperation in the International Labour Organisation.

Membathisi Mdladlana, the minister of labour, indicated that he was impressed by China's economic progress and that South Africa "must use the experiences of China."

Mdladlana recently visited China and stated that he had seen the enormous progress the country had made in building its economy, as witnessed by the rapid increase in commercial and residential developments that have sprung up after China began its integration into the global economy.

South Africa is creating an impressive 500,000 jobs a year. However, the country can improve further and this is where China's experience can be useful.

Chinese Labour and Social Security Vice-Minister Zhang Xiajian focused on the fact that South Africa's textile industry had been "bleeding", and indicated that China could provide the skills conducive to employment creation in that sector. Part of the agreement with China was to co-operate on the matter of skills, he noted.

A March 2006 census conducted by the South African government has announced that unemployment in the country now stands at 25.6%, which is a slight decrease from last year's figures.

President Thabo Mbeki has established a bold initiative to cut unemployment and poverty in half by 2014. The government has put aside an estimated R370bn ($48bn) for infrastructure development as part of the Accelerated and Shared Growth Initiative (ASGISA). A large portion of this money has gone towards Mbeki's goal.

The signing of the labour MoU follows on the footsteps of a heated debate between Congress of South African Trade Unions (Cosatu) leader Zwelinzima Vavi and Reserve Bank Governor Tito Mboweni over the effect of quotas on Chinese imports.

Vavi has expressed concern that the influx of cheap Chinese products will negatively affect some of South Africa's struggling industries. Mboweni rebutted in a presentation to a parliament subcommittee by saying that proposed quotas on Chinese imports did not make economic sense and would not save an uncompetitive industry.

In order to assist ailing industries, the ministry of trade and industry has proposed the establishment of quotas over a three-year period on certain Chinese imports, including 31 categories of Chinese clothing. The ministry has, however, placed a brief moratorium on the implementation of the quotas until both sides come to some form of agreement.

Last month, Mboweni took an even bolder stance by saying that "If you [uncompetitive industries] have not become competitive, you have no chance in hell of becoming competitive in the three years or so that the quotas will be imposed."

Vavi and Mboweni subsequently met in Pretoria on October 9 and have moved "much closer" to agreement on the issue of clothing and textile quotas.

Mdladlana believes, however, that "just as toys and cars were produced by China and sold all over the world, South Africa needed to eventually learn how to export its toys and cars to the rest of Africa..." He has indicated on several occasions that in the long run the challenges facing the country cannot be solved with quotas.

The two labour ministers will continue to hold discussions throughout this week as the Chinese vice-minister tours South Africa to meet with government and corporate officials.

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