Chinese ambassador Wu Peng. (X)
China’s trade with South Africa is shifting from a traditional exchange to industrialisation, which will take time to enhance South Africa’s production capacity, Chinese ambassador Wu Peng has said.
Bilateral trade between the two countries reached $34.18 billion in 2024, with South Africa importing $21.9 billion of goods from China and exporting $12.2 billion, resulting in a trade deficit of $19.71 billion, the South African Institute of International Affairs (SAIIA) said. Since 2000, trade deficits have contributed to a net cash outflow of $114.83 billion from South Africa to China. It said China’s relations with Africa more broadly is driven by its demand for raw materials and access to markets for its manufactured goods.
Speaking during an SAIIA seminar on Monday titled: “Enhancing Global Trade Cooperation Amid Rising Protectionism. Can South-South Cooperation Be the Answer?” Wu said the Chinese government has noticed a need for reform of trade relationships.g
He said this would see a transition period from resource-based trade to industrialisation, noting that mining can also create jobs and enhance GDP growth in South Africa.
“We understand there is a need for value addition in South Africa but Rome was not built in one day,” said Wu.
South Africa earlier raised concerns about the trade imbalance with the Asian economic giant at the 9th Forum on China-Africa Cooperation in September 2024, with President Cyril Ramaphosa noting: “We have witnessed an increase in our bilateral trade. However, as South Africa, we would like to narrow the trade deficit and address the structure of our trade.”
Ramaphosa acknowledged an increase of “inward procurement” by Chinese companies in 2023 and urged for “more sustainable manufacturing and job-creating investments”.
On Monday Wu highlighted China’s role in lessening the effects of the United States’ 30% reciprocal tariffs on South Africa, and called for increased multilateralism to combat “unilateralism, protectionism and economic bullying [which are] are on the rise. These tariffs are nothing formidable; they will pass, and time will go on.”
He said China has been South Africa’s largest trading partner for 15 years, contributing more than 20% to trade, while South Africa is Beijing’s biggest partner in Africa.
Pretoria says it will not retaliate against Washington and has instead offered the Trump administration a revised and undisclosed trade deal. The country is also looking to diversify its export markets and has set up a support desk at the department of trade and industry.
China has also not been spared from the punitive US tariffs. Wu said the question now is where the economic direction for the Global South lies in relation to what he called the US’s abuse of tariffs.
He argued that trade with China has not been the major cause of South Africa’s export decline, stating that most refining of metals used to be done locally, but producers faced a price hike because of the country’s electricity crisis. This had led to the closure of several refineries.
He said the 2024 Forum on China-Africa Cooperation had sent a “strong message of unity of the Global South to safeguard justice and development”.
Wu noted that 53 African countries have signed memorandums of understanding with China to work towards 0% tariffs as part of a “charter of win-win cooperation”. More than 30 have already signed economic partnership agreements, which he described as the “first step” to achieving duty-free access.
He stressed that this was in line with World Trade Organisation rules and China’s commitment to multilateralism.
South African agricultural exports already enjoy 0% tariffs in China, an arrangement that began 10 years ago.
Wu said Pretoria had submitted a list of 100 products — including vehicle parts, organic chemicals and plastic-related goods, many of which were previously exported to the US — that it hopes to expand into the Chinese market.
“The Chinese market will provide relief from tariff pressure and enhance diversification,” Wu said.
China buys 80% of South Africa’s macadamia nuts, making it the biggest consumer of the product. He echoed Agriculture Minister John Steinhausen’s remarks that China was negotiating the import of five types of stone fruit and would begin talks on peaches, plums and apricots, which “will find their ways in steady streams to the consumers in China”.
Chinese enterprise investment was also on the rise, Wu added, with companies maintaining more than $3 billion in Africa. Since last year’s Forum on China-Africa Cooperation, there has been $1.6 billion in new investment, alongside 18 business networking events linking Chinese and African small and medium enterprises.
South Africa’s deputy director general for trade in the department of trade, industry and competition, Xolelwa Mlumbi-Peter, said China’s 0% tariff on Africa “is a good agreement that South Africa welcomes” and negotiations should include local value addition and beneficiation.
She said China’s technological advancement was “moving it up the value chain” and leaving space at the lower end for other Global South countries.
“So it’s going to be important as we engage in South-South partnership to identify the scope of where, for example, as South Africa in the global value chain we can play so that, as China moves up, we occupy the space not just as a supplier of primary products, but we can have some processing that takes place in South Africa before products are exported to China for China to do more sophisticated processing,” she said.
The Covid-19 pandemic had highlighted how countries with technology hoarded it, Mlumbi-Peter said. “But I think as countries of the South, having had that experience, it will be important to look at how do we partner in terms of technology transfer and technology cooperation to ensure that we are able to diversify the manufacturing base among ourselves.”
She argued that building alternative development models would be critical for Africa’s industrialisation, with regional blocs and new institutions forming the basis of collaboration.
Mlumbi-Peter said the Brics grouping remained an important platform “in the current context of seismic shifts in global trade” to foster cooperation in agriculture, industry, innovation and new energy.
The secretary general of the African Continental Free Trade Agreement, Wamkele Nene, called China’s role “transformative” and encouraged the need for similar “intensive investments”, especially that which supports Africa’s development.