China and South Africa will launch Free Trade Agreement (FTA) negotiations since South Africa has recognized China as a market economy, according to a joint communiqué of the two countries issued in Pretoria Tuesday.

The communiqué, issued following the visit of Chinese Vice President Zeng Qinghong, said China welcomed the Southern African Customs Union (SACU) decision to commence FTA negotiations with China.

"In affirmation of the positive changes in the Chinese economy and China opening up greater links with the world, South Africa was pleased to announce its recognition of China's market economy status," said the communiqué.

Market economy status will facilitate the process of linking the two economies, as it will establish common principles and standards in the negotiation of the rules that will govern trade, it said.

"The two countries agreed to encourage and support mutual trade and investment and to expand cooperation in areas of mutual economic interest," it said.

As the strongest economy of Africa, South Africa now has become China's largest trading partner in Africa and bilateral trade has increased from US$1.47 billion in 1990 to over US$3.7 billion last year.

Two-way trade in the first quarter of this year amounted to US$1.67 billion, an increase of 66.6 percent from the same period in 2003.

During a meeting with South African President Thabo Mbeki on Monday, Zeng said South Africa was "a key African partner of China" and China is willing to forge a strategic partnership with South Africa to seek equal and mutual benefit and common development.

"The two leaders agreed to work together to elevate the strategic partnership between the two countries to a new high," said the communiqué.

The two countries' leaders have also expressed their determination to strengthen the cooperative South-South relationship and agreed to cooperate on issues pertaining to the World Trade Organization to safeguard the legitimate rights and interests of the developing world, it said.

During the meeting with Mbeki, Zeng reaffirmed China's policy statement on Africa and emphasized China commitment to building a new type of partnership with Africa based on long-term stability, equality, mutual benefit and all-round cooperation.

He reiterated Chinese support for the New Partnership for Africa's Development, which was proposed by Mbeki and some other African leaders for revitalization of the continent, African peace initiatives and the promotion of regional integration.

The communiqué also said South Africa reiterated its commitment to the one-China principle in terms of which the Government of the People's Republic of China is the sole legitimate government representing the whole of China.

"South Africa recognizes China's position that Taiwan is an inalienable part of China," it said.

(Xinhua News Agency June 30, 2004)