Pretoria — South Africa and China have entered into an agreement set to tackle the smuggling and distribution of counterfeit goods in both countries.

On Friday, SA Revenue Services' (SARS) Commissioner Pravin Gordhan and the Chinese Minister General for the Administration of Customs (GACC) Xinsheng Mu, signed an agreement to strengthen bilateral cooperation between the two countries' customs administrations.

"Both administrations [SARS and GACC] are strongly committed to combat smuggling and other issues like counterfeit goods that get into both our countries," Mr Gordhan said, adding that the agreement would help combat such practices in a significant way.

Mr Gordhan said the agreement, which has been endorsed by South African Deputy Finance Minister Jabu Moleketi and China's Ambassador to South Africa Guijin Liu, was a legal basis for the two administrations to combat smuggling.

"Smuggling is a problem in every country because there are highly organised syndicates that are operating everywhere, depending on what kind of economic advantage they get to obtain. We all have a share of the problem," he said.

Mr Mu indicated that South Africa was his country's largest trading partner in Africa, adding that the Chinese government would continue to strengthen relations with African countries and South Africa in particular.

According to SARS, China is one of the biggest trading partners for South Africa, currently being the 8th largest destination for South Africa's export market, which amounts to about R6.85 billion.

The Asian country is also the second largest source imports, which amounted to R23.02 billion in 2005, SARS said.

"South Africa exports mostly raw material such as aluminium, platinum and chrome to China and it imports processed goods such as electronics, machinery, clothing, textiles and footwear from the country," SARS spokesperson Adrian Lackay said.

The two countries have also agreed to a pilot project to manage the trade between them.

This will entail the advanced electronic submission of customs data and will allow for the joint detection of high risk.

The agreement is also to support the Memorandum of Understanding signed by Chinese Premier Wen Jiabao and President Thabo Mbeki in June to restrict clothing and textile imports from China into SA, in a bid to remedy the trade imbalance between the two countries.

The South African government has since announced that the quota system to cut down on the amount of imported clothing and textile from China would be implemented at the beginning of next year.

The move will affect about 31 product categories in the clothing and textile industry.