China trade to 'soften blow of US tariffs'

China's ambassador said South Africa's call to narrow its trade deficit and diversify exports required building local beneficiation capacity

- Nkateko Joseph Mabasa

China's trade with South Africa is shifting from a traditional exchange to industrialisation, and it 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 at an SAIIA seminar this week 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 a reform of trade relationships. This would see a transition period from resource-based trade to industrialisation, he said, noting that mining can also create jobs and enhance GDP growth in South Africa.

"China-Africa economic and trade cooperation is thus evolving from traditional trade to deeper industrial collaboration, entering a new stage of jointly creating added value. This is a phenomenon, I believe, everyone should pay attention to," said Wu.

Although China mainly imports mining products, Wu argued that there is a need for a transition period. "We need not hate the trade of mining because mining can also create jobs for South Africans."

He said China has been steadily increasing its investment in Africa, giving strong impetus to the continent's modernisation process and industrialisation, while noting a significant trade deficit.