Strengthening Bonds: South Africa and China’s United Pursuit of Trade and Investment

South Africa and China have a long-standing history of trade. Recently, they held a critical discussion in Pretoria, with the aim of enhancing their economic relationship. The Joint Economic and Trade Committee (JETC) meeting served as a precursor to the upcoming state visit of President Xi Jinping of China to South Africa on August 22, 2023. The session centered on increasing trade and altering its composition, enabling South Africa to export more manufactured goods and value-added products to China.

Optimism in Potential Benefits

The South African Minister of Trade, Industry, and Competition, Ebrahim Patel, expressed his optimism for the potential benefits of the talks. He cited significant outcomes in trade, investment, and job creation. Two-way trade between the two countries exceeded R900 billion in 2022, while Chinese investment in South Africa approached R200 billion.

Green Technologies and Strides Made

The ministers acknowledged China’s remarkable progress in green technologies, particularly electric vehicles, and reviewed the strides made in drafting Memoranda of Understanding on the green economy, blue (oceans) economy, digital trade, investment, and special economic zones.

The Phases of Partnership

Trade between South Africa and China began flourishing after 1994, with China now being South Africa’s largest trading partner. The second phase of their partnership saw an increase in Chinese investment, particularly in sectors such as mining, telecommunications, and manufacturing. The third phase, on which the JETC focused, is intended to promote deeper industrialization and green industries in South Africa.

Shifting the Composition of Trade

The composition of trade between the two countries must change, shifting from raw materials to greater levels of industrial exports and manufactured goods. To achieve this, the ministers agreed on a combination of efforts, including heightened promotion of South African goods, inward Chinese buying missions, and increased investment in South Africa’s manufacturing industry.

Addressing Global Growth and Trade Developments

The two countries also discussed global growth and trade developments, addressing the challenges posed by a more polarized world. Minister Patel emphasized the importance of maintaining open global trade and investment systems, as well as the benefits of peaceful interactions between nations.

Historical Ties

The ancient kingdom of Mapungubwe in South Africa serves as a powerful reminder of the historical ties between these two countries. Minister Patel recounted the kingdom’s trade with China, India, and Arabia over a thousand years ago, illustrating the importance of Africa’s own trade networks and the potential for peaceful trade relations to enhance human welfare and understanding.

Intensifying Activities

The JETC talks concluded with an agreement to intensify activities in the coming six months to boost economic relations and finalize and implement agreed measures. As the world watches, South Africa and China’s collaborative efforts have the potential to leave an indelible mark on global trade, investment, and sustainable development.