Dr Martyn Davies, the CEO of Frontier Advisory, believes that the negative perception of invading Chinese colonialists is being done away with and the trade numbers support his view.

Speaking at the merger announcement between local Promet Engineers Africa and Chinese Dadi Engineering Development Group, Davies said China was the single largest trading partner and financier of infrastructure into the African continent with trade levels showing compound annual growth of 35%. Total trade of R9,34bn in 2000 has grown to R111bn in 2011. The relationship is not all one way, Davies pointed out, with dependence on exports to China rising across the continent.

Davies said the strong, pervasive and undeniable force of China has seen it record growth levels of 9,1% during a Western economic crisis with 8,5% forecast for next year. Davies scorned the prophecies of hard or soft landings for the Chinese economy, saying: �??you ain�??t seen nothing yet�?�.

Davies predicts that by 2020 China will overtake the US to take number one spot in terms of GDP numbers.

Davies said that the Chinese economy was overheating at growth rates of 13% and that the lower growth rates of 8% to 9%, reported since quarter three of 2010, are an indication of a steadying growth trend.

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In the 1980s, China jumped on every possible and available M&A when it opened its markets to foreign companies in exchange for technological know-how, Chunlin Zhang, specialist at the World Bank, said in The Globe and Mail. The rest is history.

Africa is now on the same path.

Recently, South Africa's ProMet Engineers Africa and China's Dadi Engineering Development Group entered into an M&A to create ProMet Dadi Africa, a firm focused on mining and mineral process projects in Africa and Asia.

Simply out, the M&A reflects very obvious strategic benefits - access to Chinese technologies and capability for Africa, and access to resources for China. The proponents said they wanted the Chinese expertise brought in because of a lack of top-level, experienced management in South Africa as numerous executives have left for projects in Australia.

"We hope and we are confident this new company will give us a new, good opportunity to do business in the Africa market," Wang Dongping, a general manager of Dadi, said.

The M&A has already undertaken a $25 million gold project in Kyrgyzstan from South Africa.

China has invested $7 billion in South Africa by the end of 2010 alone. Chinese companies are to expand from mining, financial and manufacturing sectors, and towards telecom, transportation and renewable energy.

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The merged entity, Promet Dadi Africa, now has lump-sum turnkey project capabilities of up to $300m in respect of engineering, procurement and construction. This includes mine development, and port, process, plant and materials handling.

But more than that, it reflects the blossoming relationship between China and SA.

"Now we have merged with Promet we will do business in the African market," Dadi chairman Dongpin Wang said yesterday.

"The (merger) is a symbol of our successful business co-operation," Jiang Wei, economic and commercial counsellor of the Chinese e mbassy in SA, said yesterday.

He said SA and China's "strong political ties" had laid the foundation for the deal.

China is now SA's biggest trading partner at more than R100bn a year, with increasing emphasis on hi-tech imports from China and agricultural exports from SA.

"Now both nations are members of Brics (Brazil, Russia, India, China, SA) we should firmly promote our bilateral trade," Mr Wei said.

He said China wanted to make the most of SA's financial markets and commodities base for its growth, and that the rapidly developing relationship would serve as a paradigm for China's relations with other African states.

"Interestingly, our first project (after) the merger was a study for an American coal company looking to invest in China," Rob Bennett, MD of the new company, said yesterday.

"We are also pleased that this transaction provides a portal for South African capabilities into markets historically closed to us."

The Chinese have the world's largest foreign exchange reserves, valued at more than $3-trillion, or about equal to the gross domestic product of some of the world's most developed economies.

China's investments in SA exceeded $7bn, mostly in mining, manufacturing and the financial sector, Mr Wei said.

"We need to get used to this new force," Martyn Davies, CEO of emerging markets consultancy Frontier Advisory, said yesterday.

He said Africa's general economic growth trend had mirrored China's growth path since 1999, when China promulgated its broad Africa policy. But he said perceptions of Chinese investments were often negative, despite it being Africa's largest trading partner, investor and financier of infrastructure.

Promet Engineers Africa had completed about 40 projects in Africa in the past 10 years, including many for global mining companies.

The merged entities now had offices in SA, China and Australia, along with representatives in Botswana, Nigeria and Sudan.

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Dadi is a major player in the Chinese coal sector, and since it was established in late 2008 it has designed and supplied more than 70 coal processing plants, of which 30 were turnkey projects, as well as three water slurry treatment plants. Of the 30 turnkey processing plants, Dadi operates and maintains ten, under contract from the clients.

The company has also completed more than 30 openpit and underground mining projects. It is ISO 9001 certified.

�??We hope and we are confident that this [merger] gives Dadi a good opportunity to do good business in Africa,�?� said company GM Wang Dongping. �??Our two parts, joined together, can do a good job, with any size of project.�?�

ProMet Africa has been active in South Africa, Botswana and West Africa. One of its shareholders is ProMet Engineers of Australia.

�??We were quite a successful company in our own right,�?� stated company MD Rob Bennett. �??We got a good reputation and a bankable name.�?� But the global economic crisis caused the local company to consider its position in the market. �??We recognised our market was becoming exceptionally competitive,�?� both with regard to winning business and concerning the rising cost of inputs, including skilled staff.

�??We decided we needed to find a partner, with a balance sheet that would allow us to undertake large [scale] work,�?� he explained. That partner proved to be Dadi, and Bennett is now MD of ProMet Dadi Africa. Whereas ProMet Africa and ProMet Engineers could call on some 80 employees, Dadi has more than 2 000 engineers and project managers, and ProMet Dadi Africa can also call upon their services.

�??We�??re focused on all commodities,�?� highlighted Bennett. �??We do have a good pedigree in iron-ore, coal and precious metals.�?�

Read the original article in mining weekly here.