Business
China-South Africa Economic Ties: Trade, Investment, and Growth Opportunities
China and South Africa continue to deepen their economic relationship, creating new opportunities in trade, investment, and industrial collaboration. With bilateral trade reaching $34.18 billion in 2023, both nations are working toward a more balanced and sustainable partnership.
On February 20, 2025, South African President Cyril Ramaphosa met with Chinese Foreign Minister Wang Yi in Pretoria to reaffirm their commitment to economic cooperation. Their discussions focused on infrastructure development, trade facilitation, and technology transfer, highlighting a shared vision for growth.
This follows Chinese President Xi Jinping’s 2023 visit to South Africa, which reinforced partnerships under the Belt and Road Initiative (BRI) and other strategic frameworks.
The Evolution of China-South Africa Trade Relations
Since formalizing diplomatic ties in 1998, China and South Africa have transformed their economic relationship:
- 2000: Bilateral trade stood at just $1.34 billion.
- 2010: The two nations upgraded their relationship to a Comprehensive Strategic Partnership.
- 2023: Trade grew to $34.18 billion, with China becoming South Africa’s largest trading partner.
Despite this growth, South Africa faces a trade deficit of $9.71 billion with China. The imbalance stems from South Africa’s exports of raw materials while importing manufactured goods from China.
Top South African Exports to China (2024)
- Precious metals & stones: $13.45 billion
- Ores, slag & ash: $12.35 billion
- Iron & steel: $1.91 billion
- Copper products: $1.04 billion
- Edible fruit & nuts: $0.49 billion
Top South African Imports from China (2024)
- Electrical machinery & equipment: $5.70 billion
- Machinery & mechanical appliances: $4.23 billion
- Vehicles & auto parts: $1.36 billion
- Iron & steel: $0.84 billion
- Plastics & related products: $0.71 billion
To address this imbalance, South Africa aims to increase agricultural exports and develop local manufacturing industries.
Chinese Investment in South Africa: Key Sectors
China’s investment in South Africa exceeds $10 billion, with 170+ Chinese companies operating across multiple industries.
1. Mining and Resources
- Zijin Mining and China National Gold Group are investing in South Africa’s platinum and rare earth minerals sector, vital for renewable energy.
2. Infrastructure and Transport
- China-backed projects are modernizing railways, ports, and highways, enhancing trade logistics under the Belt and Road Initiative (BRI).
3. Renewable Energy
- Power China is developing a 123MW photovoltaic plant, generating 300 million kWh of clean energy annually for South Africa’s power grid.
- Companies like State Grid Corporation and Longi Solar are investing in solar, wind, and battery storage projects.
4. Manufacturing and Technology
- The Hisense South African Industrial Park, launched in 2013, produces 1 million TVs and 500,000 refrigerators annually, creating 1,000+ local jobs.
5. Financial Services
- Standard Bank and Naspers are strengthening financial ties with China through fintech, digital banking, and investment initiatives.
Opportunities for South African Businesses in China
Despite the trade imbalance, South African businesses can tap into China’s expanding market in key sectors:
1. Mining and Raw Materials
- Platinum, iron ore, and rare earth elements are in high demand as China scales up industrial production.
2. Agriculture and Food Exports
- South Africa can expand exports of citrus, beef, wine, and nuts, catering to China’s growing middle-class consumer market.
3. Renewable Energy and Infrastructure
- Collaborations in solar, wind, and battery storage technology are growing as South Africa transitions to green energy.
4. Technology and Telecommunications
- Opportunities exist in AI, fintech, software development, and cloud computing, leveraging China’s expertise in digital innovation.
5. Financial Services and Banking
- Cross-border banking and fintech solutions offer new avenues for South African firms in China’s financial sector.
South Africa-China Double Taxation Agreement (DTA)
To support economic cooperation, China and South Africa signed a Double Taxation Avoidance Agreement (DTA) in 2000, ensuring businesses are not taxed twice on income earned in both countries.
Key tax benefits include:
- Lower withholding tax on dividends
- Clear corporate income tax rules
- Preventing tax evasion and financial burdens
The agreement strengthens cross-border investment, benefiting South African companies expanding into China.
The Future of China-South Africa Economic Relations
As China and South Africa deepen economic cooperation, opportunities for trade and investment continue to grow. However, balancing trade, increasing local beneficiation, and protecting South African industries will be crucial for long-term sustainability.
With China’s continued investment in infrastructure, energy, and technology, South Africa remains a key partner in shaping a more equitable and mutually beneficial economic relationship.
The evolving China-South Africa economic partnership presents both opportunities and challenges. By leveraging strategic investments, diversifying exports, and enhancing industrial cooperation, South Africa can strengthen its economic position while ensuring sustainable growth in the years ahead.
Follow Joburg ETC on Facebook, Twitter , TikTok and Instagram
For more News in Johannesburg, visit joburgetc.com
