IN a powerful address at the South Africa-China Business Forum on the sidelines of the 2024 Forum on China-Africa Cooperation (FOCAC), South African President Cyril Ramaphosa underscored the need for a deepening of the trade and investment relationship between South Africa and China.
The Forum, taking place during Ramaphosa’s state visit to China, served as a platform for strengthening economic ties between the two nations, with a particular focus on shifting the structure of their trade profile and enhancing collaborative efforts in key sectors.
“South Africa and China have vibrant, diverse, and growing economies, with a wealth of opportunities for businesses wishing to expand into new markets,” Ramaphosa remarked, highlighting the dynamic potential of both nations. He emphasised that China is currently South Africa’s largest trading partner, with bilateral trade having surged by a third since 2019. South Africa primarily exports minerals and agricultural products to China, while importing largely manufactured goods. However, Ramaphosa made it clear that South Africa is seeking to alter this trade dynamic by moving from being a large importer of manufactured products to becoming a significant exporter.
The President outlined the advanced and diversified nature of South Africa’s economy, noting its vibrant business environment, strong regulatory framework, and competitive financial sector. “We are a country with enormous potential for growth and development,” Ramaphosa said, positioning South Africa as a strategic gateway for companies looking to expand into the broader African continent.
Chinese investments in South Africa have been substantial, with notable ventures in manufacturing, banking, textiles, mining, and agriculture. Ramaphosa highlighted the significant investment by the Industrial and Commercial Bank of China, which acquired a 20% stake in Standard Bank, one of Africa’s largest financial institutions. He also noted the success of Chinese electronics giant Hisense, which entered the South African market in 1997 and now exports to other African countries and the United Kingdom from its South African plant.
Since the launch of South Africa’s investment drive in 2018, Chinese companies have pledged investments worth over R18 billion (approximately USD 1 billion) in various sectors, including manufacturing, resources, finance, and agro-processing. Recent weeks have seen further commitments from Chinese firms to expand their operations in South Africa, underscoring the resilience of the South African economy and the abundant opportunities it offers to both foreign and domestic investors.
President Ramaphosa identified several areas for strengthened collaboration between South Africa and China, including the electric vehicle sector, renewable energy, green hydrogen, energy storage, infrastructure, manufacturing, mining, and the beneficiation of critical minerals. He expressed admiration for China’s transformation into an economic powerhouse, particularly its success in developing innovative renewable energy solutions, and called for joint efforts to create sustainable and environmentally friendly energy solutions that would benefit both nations.
“We plan to move from being a large importer of manufactured products to being a major exporter,” Ramaphosa declared, citing the success of South Africa’s automotive industry as a model for other sectors. He emphasized the country’s ambitious plans to modernize infrastructure, revolutionize the energy sector, and promote low-carbon, climate-resilient development.
Ramaphosa also highlighted the vast untapped potential in technology, advocating for collaboration between South Africa and China to promote innovation, technology transfer, and skills development. He stressed that by leveraging their respective strengths and exploring new avenues of cooperation, the two nations could create mutually beneficial partnerships that would drive economic growth and job creation.
The President concluded by noting that the benefits of South Africa-China cooperation extend beyond their bilateral relationship, with the potential to support the success of the African Continental Free Trade Area (AfCFTA). The AfCFTA, which opens access to a market of over 1.3 billion people, offers enormous opportunities to expand production and stimulate economic activity across the continent.
“Let us work together to seize this opportunity and continue to build a more prosperous future for our respective countries,” Ramaphosa urged, calling for stronger business relationships, cultural exchanges, and a favourable business environment that would contribute to the shared prosperity of both nations.
