How South Africa and China are transforming economic growth together

By Palesa Nangu

South Africa’s economic landscape is undergoing a notable transformation, largely propelled by the country’s deepening partnership with China. For 16 consecutive years, China has remained South Africa’s largest trading partner, illustrating the sustained vigor of the bilateral relationship. Meanwhile, South Africa has consistently held the title of China’s top trading partner in Africa for 15 years—a clear reflection of how vital these ties have become for both nations. As of 2024, the latest customs statistics from China indicate that bilateral trade volumes have reached new heights, totaling USD 52.46 billion. This figure alone underscores just how central China is to South Africa’s economic aspirations and how integral South Africa has become to China’s engagement on the African continent.

One of the most significant outcomes of this partnership is the noteworthy trade surplus South Africa enjoys in its dealings with China, currently valued at approximately USD 8.83 billion. This surplus not only points to strong export performance but also signals the growing competitiveness of South African goods on the global stage. Specifically, exports of raw materials and agricultural products to China have surged over the last few years. In fact, agricultural trade has been a focal point of cooperation, supported by China’s “green channel” initiative, which has facilitated South Africa’s export of 68 types of agricultural and food products. Among these, 13 categories—like citrus fruits, fresh pears, raw wool, and dairy items—carry special export protocols, thereby simplifying customs procedures and accelerating market entry.

This momentum has yielded reciprocal benefits. South African farmers gain access to a consumer market of over 1.4 billion people in China, while Chinese consumers receive a more diverse range of agricultural produce. According to local farming cooperatives in Limpopo and the Western Cape, the resulting surge in export demand has boosted incomes in rural areas, spurred job creation, and even incentivized farmers to invest in more efficient production methods. With negotiations underway for market access of stone fruits and other goods, the agricultural trade pipeline holds enormous promise for further economic returns.

While trade data paint a compelling picture, investments from Chinese enterprises into the South African economy have become an equally vital dimension of this partnership. Reports from China’s Ministry of Commerce (MOFCOM) reveal that China’s total investment stock in South Africa has surpassed USD 10 billion. In turn, over 200 Chinese companies now operate across a wide spectrum of local industries, including automobile manufacturing, mining, telecommunications, financial services, and real estate development.

Crucially, this investment spree has created more than 400,000 jobs for South Africans. In certain provinces, such as Gauteng, Chinese investments in high-tech manufacturing and assembly plants have led to skills transfer programs designed to upskill local workers. These programs introduce cutting-edge manufacturing techniques and technical proficiencies, thereby enhancing South Africa’s industrial capabilities. In return, Chinese firms benefit from a strategic position in Africa’s most advanced economy, leveraging it as a gateway to the broader continent.

3. Corporate Social Responsibility and Community Empowerment

However, the importance of Sino-South African cooperation extends well beyond the confines of boardrooms and trade negotiations. An often overlooked aspect of this partnership is the consistent emphasis on corporate social responsibility (CSR). Chinese companies have actively supported various community-centric initiatives. In April 2024, a large-scale job recruitment fair was organised with the backing of the Chinese Embassy. More than 70 Chinese companies offered in excess of 1,000 job positions, attracting over 2,000 local applicants, many of whom were recent graduates. The fair not only addressed unemployment but also helped match young talent to employers seeking fresh perspectives.

Additionally, Chinese enterprises are leaving a tangible footprint in community development. For instance, Sinosteel Samancor Chrome Company, operating in Limpopo, has invested nearly ZAR 80 million in infrastructure projects like electricity and water supply. These projects have substantially improved the daily lives of local residents, who previously faced critical shortages in basic services. Similarly, HBIS PMC has allocated ZAR 286 million towards projects under a “Local Economic Development Plan,” targeting youth empowerment, women’s entrepreneurship, and the inclusion of persons with disabilities in meaningful economic activities. The outcome of such CSR efforts is twofold: they bolster economic activity and reaffirm Chinese enterprises’ commitment to inclusive development.

Beyond private-sector initiatives, government-led assistance programs have also shaped South Africa’s developmental landscape. At the request of the South African government, China launched several aid projects, including a Poverty Alleviation Model Village and the establishment of a Vocational Training Center. These projects not only offer material support but also aim to enhance self-reliance by providing local communities with skills training and sustainable livelihood options.

When South Africa confronted a power crisis in 2023, China responded swiftly with immediate relief measures, including the provision of emergency power generation equipment for crucial public institutions like hospitals and schools. Concurrently, Chinese power experts worked closely with the South African Ministry of Electricity and Eskom to optimize infrastructure and improve power management. This holistic approach—combining both immediate relief and long-term capacity building—serves as a model of effective international cooperation.

As South Africa continues to grapple with the dual challenge of growing its economy while addressing socio-economic inequalities, cooperation with China offers a unique blend of market access, industrial investment, community upliftment, and technological advancement. This partnership effectively supports South Africa’s ongoing endeavors to diversify its economy, create jobs, and invest in human capital.

Looking ahead, sectors such as renewable energy, digital technology, and advanced manufacturing appear poised for even deeper collaboration. Given the evolving global economic landscape, diversifying trade and investment avenues is more important than ever for South Africa, and China’s support remains a lynchpin of that effort.

Ultimately, the relationship between China and South Africa goes far beyond the transactional. It is a partnership underpinned by shared opportunities, collaborative growth, and, increasingly, mutual commitments to societal well-being. As the two countries navigate a rapidly changing global environment, their willingness to engage in comprehensive cooperation bodes well for South Africa’s developmental ambitions and for China’s continued role as a critical economic stakeholder on the African continent.

*Palesa Nangu is the CEO of African Innovation Solutions

** The views expressed do not necessarily reflect the views of IOL or Independent Media.