China South Africa Trade, China South Africa Trade Relations

China's investments in South Africa have seen a drastic improvement in the past years. What is the future of this trade relation?

China is South Africa's biggest trade partner. Trade relations between the two countries flourished by more than USD 13.6 billion since the time when diplomatic relations were established during the 90s. The burgeoning relation took off in the late 2000s, and much of the credit for this relation goes to President Jacob Zuma. The trade policy was formulated with the hope to warm political relations and address some socio-economic challenges in both countries. China's status as a developing nation and its recognition as a member of the Global South have a significant influence in South Africa.

It is a timely move for China to involve South Africa in the list of BRIC countries. During 2011, China's foreign trade with South Africa was around USD 45 billion, a whopping 77% increase. China's exports are more than its imports. China's exports increased by 30% in 2010 and 20% in 2011. China is an important partner to South Africa both at the political and economic level, but this move has also been criticized for job losses in certain manufacturing sectors. As far as China is concerned, South Africa is a major player in the African continent, thus an important partner.

The African Prospects:

South Africa will enjoy the cheap exports from China. During 2009, China was the largest exporter to South Africa, surpassing the US and other traditional European partners. Trade statistics of China's exports were proof of the expanding commercial relation between the two countries. African countries which are not very particular regarding quality and manufacturing standards may enjoy trade with China. But at the same time, South Africa would also have to compete with Chinese imports.

South Africa's accession with China will strengthen the former's trade relations with the BRIC countries. The increasing influence of the BRIC countries in the African continent will fuel economic improvement and poverty alleviation in South Africa. South Africa would position itself as a gateway and would also gain access to BRIC markets and their investments.

China - Long-term association with Africa:

China is an economic powerhouse and has long-term ambitions about its trade relations with South Africa. China's investments, dynamism, and confidence in the South African local markets will result in creating gains for local economies in South Africa. China is being described by some industry analysts as a 21st-century partner for economic development and a good catalyst for growth, and has been proved with its trade agreement with Africa.

China's top five trading partners in Africa (2010)

Country	Trade Value (values in billion USD)
Angola	24.8
South Africa	22.2
Sudan	8.6
Nigeria	7.8
Egypt	7.0

China's imports and exports from and to Africa

Textiles	2010 (values in billion USD)
Imports	0.7
Exports	10.7

At the same time, it is also attracting criticisms stating that China is violating local laws depleting the resources of Africa, and taking undue advantage of the country's corrupt leaders. Despite all condemnations, Africa welcomes Chinese investments and new joint ventures with the dragon nation. China has opened new economic, social and political avenues for South Africa, and other African states, but it is entirely up to the people to identify their opportunities, and leverage them to their advantage.

Issues in the Chinese Market:

However, this partnership is not safe from issues. Chinese manufacturers are currently plagued with several issues such as economic crisis in their major markets of EU, and US. Stronger RMB value further makes Chinese made items appear expensive in the global market. Though China is making efforts to move up the value chain, there is still vast population that is unskilled. Environmental pollution is also becoming a big issue among China's manufacturers.

South Africa is at a cross roads with regards to its domestic and socio-economic development. The potential of emerging countries facilitate higher growth opportunities to the country, and pave way for generating more employment opportunities.

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