In February, SA’s trade, industry and competition minister, Parks Tau, and his Chinese counterpart, Wang Wentao, signed the China-South Africa Economic Partnership Agreement (EPA), intended to open new business opportunities in both countries. A week later, Beijing announced that a zero-tariff treatment would be applied to 53 African countries across 100% of tariff lines. The only African country excluded is eSwatini, which maintains diplomatic relations with Taiwan, an island China regards as a breakaway province.

China’s ambassador to SA, Wu Peng, believes the two countries are on the cusp of a new era of opportunity. In an article entitled ‘Let the ship of China-South Africa Friendship and co-operation set sail’, published across the various titles of the Independent Group, he argues that ‘the relationship has grown stronger with time’. The two countries opened diplomatic relations in 1998, and SA was among the first countries to grant China market economy status (in 2004), thus facilitating a flood of Chinese imports. But the next logical step, a full free trade agreement, was never negotiated.

SA’s admission to the Global South solidarity organisation BRICS (from the acronym for Brazil, Russia, India, China, South Africa) in 2010 also failed to advance trade between the two countries. Martyn Davies, a former member of the World Economic Forum Global Agenda Council on China, comments that ‘after 16 years of BRICS membership, South Africa did not even have a preferential trade deal with China’. Despite the political alignment, SA’s trade arrangements with China compare poorly with those of Australia, Chile, New Zealand and Peru, he says.

‘These countries have people based in Beijing, fighting full time for access. Their trade profiles are not markedly different from South Africa – minerals and agricultural products – yet they’re eating our lunch,’ says Davies. New Zealand, for instance, signed a free trade deal with China as long ago as 2008. In 2022, this was upgraded to cover aspects of trade-in-services, always a tricky area, as well as e-commerce. The last remaining (tariff and quota) restrictions on New Zealand dairy products were removed by China in 2024, the culmination of a tough 16-year process.

Wu points out that ‘China has remained South Africa’s largest trading partner for 17 consecutive years and that bilateral trade exceeds $53.5 billion’. The ambassador says that China’s middle-income population has surpassed 400 million and is expected to reach 800 million over the next decade. This statement pinpoints a prime reason for South Africans to be interested in China – its enormous domestic consumer market, including previously marginal secondary cities.

SA is China’s largest investment destination in Africa. But the total investment stock ($11.7 billion), while not insignificant in mining (Wesizwe Platinum, Shanduka Group), banking (20% of Standard Bank) and even manufacturing (the HiSense industrial park near Cape Town makes 1 million television sets a year), has been described as ‘modest’ when compared to other regions. And while there are reportedly 300 Chinese companies active in SA, only a handful of SA companies have made the return journey, most notably Naspers/Prosus, whose massive early-stage investment in Chinese giant Tencent was one of the most successful tech investments anywhere.

The official SA perspective is equally upbeat. After signing the EPA, minister Parks Tau asserted that ‘new opportunities [will] emerge for South African businesses seeking to enter the Chinese market, particularly in areas such as mining, agriculture, renewable energy and technology’. Late last year, his department submitted a list of ‘100 top value-added South African products’ to the Chinese authorities to ease trade entry. The list has not been made publicly available, but many of the expanded opportunities are expected to involve SA’s agricultural exports.

Wu points to rooibos tea and aloe gel, which he expects will ‘find even broader opportunities in China’s vast market’. Agbiz says that China already accounts for 70% of SA’s wool exports and that scope exists for broadening trade in citrus and deciduous fruit as well as wine, red meat and macadamia nuts. SA orange growers offer a counter-seasonal proposition to China, harvesting at a time when China’s domestic suppliers are busy growing.

SA agricultural products have faced Chinese import tariffs of between 12 and 20%. SA accounts for only about 0.4% of China’s US$218 billion annual agricultural imports, about one-tenth of the value of trade captured by both Australia and New Zealand. The zero rating of China’s foodstuff imports will render SA agriculture more competitive across the board, making it more affordable for Chinese consumers.

But Agbiz cautions that the announcements ‘are only the first step in what is likely to be a long journey. Trade matters take time’. There are particular concerns about the need to meet Chinese phytosanitary requirements, a key non-tariff barrier. Furthermore, SA does not have a preferential trade agreement in agricultural products with China, which has disadvantaged local farmers relative to those in more favoured countries.

Experts argue that work in this respect must be led by government, especially the departments of Agriculture and Trade, Industry and Competition. There is also a role for industry producer groups and a need to increase the presence of agricultural trade specialists at the Beijing embassy. In the citrus case, a protocol amendment was agreed earlier this year to offer additional pest risk mitigation options. This was a long process, based on scientific inputs from Citrus Research International. It is expected to expand SA’s citrus exports to China, currently 11.5 million cartons per year, 6% of total citrus exports.

However, despite the positive noises from both sides, there are some concerns in SA about the structure of trade between the two countries. The problem from an SA perspective – and it is one widely shared by economies around the world – is that almost no one can compete directly with China’s manufacturing sector.

SA exports mostly minerals and agricultural products while buying manufactured products from China. In March 2026, SA’s biggest exports were manganese ore, chrome ore and iron ore, while the country’s top imports were cell phones, computers and automobiles.

‘Once the Chinese authorities decide to develop a sector, they create conditions for ferocious Darwinian competition within the country,’ says Davies. ‘Of course, there are all sorts of subsidy mechanisms, but the firms that survive are world class. Just look at what they’ve done with electric vehicles over the last decade,’ he says.

A good example of this phenomenon is automobile manufacturing. The flood of foreign manufacturers into the local market after China’s accession to the World Trade Organisation in 2001 catalysed domestic growth. There are now more than 200 domestic auto manufacturers in China, which became the world’s largest car maker in 2009. Having saturated its huge local market, the country turned to exports and surpassed Japan as the biggest exporter of cars in 2023.

This has seen a flood of Chinese-made automobiles into the SA market. China accounted for 22% (50 000+ units) of light vehicles imported into SA in 2024, up nearly 400% in only four years. SA’s automotive manufacturing sector – which accounts for a quarter of the country’s total manufacturing output – is being squeezed by Asian-made vehicles from China as well as India. Peter van Binsbergen, the president of Naamsa (the industry body for auto manufacturers in SA), revealed in February that only one in three new vehicles sold in SA is locally manufactured. The ratio was one in two as recently as 2020.

While there is room to increase tariff protection for SA’s automotive industry under World Trade Organisation rules, such a step would raise prices for the country’s already hard-pressed public.

Viewed from Beijing’s perspective, the SA automotive market is small and there is no guarantee that the African Continental Free Trade Agreement will offer significant expansion, at least not in the near future. As a consequence, Chinese firms with local assembly operations, such as BAIC (Gqeberha) and BAW (a minibus maker based in Springs), have hesitated to upgrade to full local manufacturing despite making positive noises. In the immediate future, attention will be on the Rosslyn manufacturing plant near Pretoria, which Chery acquired from Nissan in January and where the conditions of purchase require local content.

By David Christianson
Image: iStock