South Africa Eyes Stronger Economic Ties with China｜SFC Markets and Finance
09:16
SFCCorrespondentZhengQingting,InternFanShuqinginBeijing
AsChinaremainsSouthAfrica’slargesttradingpartner,andSouthAfricaholdsitspositionasChina’sbiggestpartnerinAfrica,thetwocountriesaredeepeningeconomiccooperationacrosstrade,investment,andindustrialdevelopment,accordingtoMr.M.M.Basadien,Chargéd’Affairesa.i.oftheSouthAfricanEmbassyinBeijing.
InanexclusiveinterviewwithSFC,Basadiencreditedthe“All-RoundStrategicCooperativePartnershipintheNewEra”betweenChinaandSouthAfricaasastrongpoliticalfoundationunderpinningbilateraleconomicgrowth.“Therearecloseparty-to-partytiesandrobustdiplomaticengagementthathavecreatedfavorableconditionsforoureconomicrelationship,whichisnowgainingstrongmomentum,”hesaid.
WhileSouthAfrica’sexportstoChinaremaindominatedbyminerals,metals,andagriculture,BasadiensaideffortsareunderwaytopushmoremanufacturedgoodsintotheChinesemarket.“Initiativeslikeinwardbuyingmissionsarenotjustaboutrawmaterials,butalsoaboutshowcasingSouthAfricanindustrialcapabilities,”headded.
Ontheinvestmentfront,BasadienhighlightedthegrowingpresenceofChinesecompaniesinSouthAfrica,especiallyinmanufacturingandautomotivesectors.“ChinesecarbrandsareincreasinglyvisibleonSouthAfricanroads,”henoted,attributingtheirpopularitytoaffordabilityandquality.Lookingahead,heexpressedhopethatfull-scalevehiclemanufacturingfacilitieswillbecomeakeyfocusofChineseinvestment.
SFCMarketsandFinance:ChinaisSouthAfrica’slargesttradingpartnerandSouthAfricaisChina’slargestinAfrica.Howwouldyouassesstherobustgrowthinbilateraltradeinrecentyears,andwhatisyouroutlookforitscontinuedexpansion?
Basadien:Firstandforemost,oneneedstorecognizethatSouthAfricahasanAll-RoundStrategicCooperativePartnershipinaNewErawithChina.Becauseoftheverystrongpoliticalrelationshipbetweenthetwocountries,asolidfoundationhasbeenestablished—includingcloseparty-to-partyties—whichhascreatedfavorableconditionsforthegrowthofeconomiccooperation.Thisrelationshipiscurrentlyatahealthylevelofdevelopmentandcontinuestogainmomentum.
Fromabilateralperspective,keypriorityareasincludeexportdiversificationandcriticalsectorssuchasinfrastructureandenergycooperation,advancedthroughmechanismslikeFOCAC,BRICS,andothermultilateralplatforms.Ourbilateraleconomictieshaveshownconsiderablediversity.ChinahasbeenSouthAfrica’slargesttradingpartnersince2009,andSouthAfricahasbeenChina’slargesttradingpartnerinAfricasince2010.
TherearestrongsynergiesinhowwecollaboratewithChina,especiallyintrade.Wehavepromotedinitiativessuchasinwardbuyingmissions—notonlyfocusingonexportingrawmaterials,butalsoonpromotingSouthAfricanmanufacturedgoodsintheChinesemarket.SouthAfrica’smainexportstoChinaremainminerals,metals,andagriculturalproducts,whileimportsincludeelectronics,textiles,equipment,automotiveproducts,clothing,andothermanufacturedgoods.
Lookingahead,Iforeseecontinuedexpansioninbilateraltrade,withsignificantroomforgrowth,particularlyifSouthAfricasucceedsindiversifyingitsexportbasket.Economicgrowth,ofcourse,alsodependsheavilyoninvestment.Wearenowexploringnewareassuchaselectricvehicles.AlltheseinitiativesaresupportedbytheBi-NationalCommission,strategicdialogue,andpeople-to-peopleexchangemechanisms,whichtogetherserveaskeyplatformsforadvancingSouthAfrica’seconomicdevelopmentincooperationwithChina.
SFCMarketsandFinance:SouthAfricahaslongbeenamajordestinationforChineseinvestmentinAfrica.Whatemergingtrendshaveyouobservedinthisinvestment,particularlyinthemanufacturingsector?
Basadien:TheSouthAfricanGovernmentacknowledgestheimportanceofChina’stradeandinvestmentwithSouthAfrica.Chinahasprovidedsignificantimpetustooureconomicgrowththroughvariousinvestmentsandeffortstoaddresstheexistingtradeimbalance.Indeed,wehavewelcomedheightenedChineseinvestmentinstrategicareassuchasmining,energyinfrastructure,logisticsinfrastructure,agriculture,health,finance,communications,andmanufacturing.
We’realsogratefulforthegrowingmutualtrustbetweenourcountries,bestillustratedbythelargeChinesecommunityresidinginSouthAfricaandthepresenceofover180prominentChinesebusinessesoperatinglocally,suchastheBeijingAutomotiveInternationalCorporation:SouthAfrica(BAIC:SA)thatarealreadyinvestedandsuccessfullyoperatingwithinoureconomy.
BAICwhichinvestedinGqeberha,haslaunchedanewtruckassembly.Toalignwithgreenfieldprojectprovisions,BAIChasrequestedathree-yearexemptionfromBBBEE-levelrequirementstoaccesstheAutomotiveProductionandDevelopmentProgramme(APDP)onceitsSouthAfricanCKDproductionbegins.
Fromamanufacturingperspective—especiallyintheautomotiveindustry—we’veseenexceptionalprogress.SouthAfricahostsnumerousassemblyplants,butwearenowalsolookingtoattractfull-scalemanufacturingfacilities.AsonerepresentativefromourDepartmentofTradeandIndustrypointedout—andI’veseenitfirsthand—Chinesecarsdominateourroads.SouthAfricansarechoosingthemnotonlyfortheirqualitybutalsofortheiraffordabilityandcompetitivepricingcomparedtotraditionallong-establishedbrands.Thismakestheautomotivesectorakeyareaforfurtherdevelopment.
Inthetextileindustry,however,thereisstillroomforimprovement.Notably,long-termChineseinvestorsinSouthAfrica—manyofwhomhavebeenverysuccessful—arenowlookingtogivebackbyencouragingnewinvestmentinmanufacturing,particularlytextilesandrelatedindustries.
SFCMarketsandFinance:TheU.S.PresidentTrump’sreciprocaltariffshaveraisedglobalconcern.WhateffectsmightthesemeasureshaveonSouthAfrica’sexportsandoveralleconomy,andhowcouldSouthAfricatrytomitigatethisnegativeimpact?
Basadien:ThetariffssituationisstillunderassessmentbytheSouthAfricanGovernment,anddesiretoengagetheU.S.administration.
SFCMarketsandFinance:TheIMF’slatestforecastwarnsofpotentialheadwindsforSouthAfrica’seconomy.Howwouldyouevaluateitsgrowthprospectsoverthecomingyears?
Basadien:OneveryimportantpointtonoteisthatthecurrentchallengesarenotaffectingSouthAfricaalone—theyarehavingaglobalimpact.AccordingtotheSouthAfricanReserveBank,theworldeconomyiscurrentlyexperiencingextremelyhighlevelsofuncertainty.Tradetensionshaveescalated,andlong-standinggeopoliticalrelationshipsareshiftingabruptly.Undertheseconditions,theglobaleconomicoutlookishighlyunpredictable.
TheeconomicoutlookforSouthAfricain2025includesthefollowingkeypoints:Initially,theSouthAfricanReserveBankforecastedeconomicgrowthofnearly2%in2025,however,thisprojectionwasdownscaledto1.7%duetounpredictabletradedisruptions.ThisadjustmentisslightlyconsistentwiththeprojectionbytheAfricanDevelopmentBankwhichpredictedannualGDPgrowthat1.6%in2025.TheInternationalMonetaryFundestimatesGDPgrowthat1.5%,reflectingcautiousoptimismamidglobalchallenges.
YoumayrecallthatinSeptember2024,PresidentCyrilRamaphosapaida2ndStateVisittoChina.Duringthevisit,hecalledconsistentlyforincreasedforeigndirectinvestmentfromChinaintoSouthAfrica’seconomy.WeacknowledgetheimportanceofChina’stradeandinvestmentwithSouthAfricaandAfrica,andwesincerelyappreciatetheChinesecompaniesthathavealreadyinvested,aswellasthoseexpressinginterestindoingso.
WhatIwouldliketoemphasizeisthatSouthAfricaisahighlyresilientcountry,witharichhistoricallegacy.Ithasfacedmanychallengesovertime,yetithasconsistentlyemergedstronger.Weareconfidentthat,throughnegotiationanddiplomaticengagementwithkeyglobalstakeholders,wecanfindconstructiveandamicablesolutionstothecurrentcircumstances.
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