by Jaya Josie
The 6th China International Import Expo (CIIE) held from November 5 –10 in Shanghai was a great opportunity for promoting South Africa’s export potential and products. The country was one of the five chosen countries invited to showcase its goods and services.
It seems that many South African delegates representing different companies went to the CIIE. The year has been a busy one for the bilateral relationship between China and South Africa. It started off in January 2023 with the commemoration of 25 years of official diplomatic relations between the two countries and culminated with the state visit of President Xi Jinping on the eve of the 15th BRICS Heads of State Summit in August. In between there were a flurry of bilateral meetings on trade, Africa and other issues related to the strategic partnership that bond the two countries.
The 6th CIIE was an important event that connected South African exporters to China. Both South Africa and China place high value on the bilateral trade relationships between the two countries. Early in November the Deputy President of South Africa, Paul Mashatile, attended the 8th South Africa-China Bi-National Commission, held from November 3–6. The deputy president was hosted by Han Zheng, the Vice-President of China. Mashatile was given the honour of opening the 6th CIIE in Shanghai. He communicated the message that South Africa is open for business and is currently a very attractive destination for investment in Africa. He affirmed views on taking forward the earlier decisions in June and August on expanding trade and economic relations between the two countries. He also engaged with representatives of the Communist Party of China and the mayors of Shanghai and Shenzhen Provinces.
The SA-China Bi-National Commission (BNC) took place during the 25th anniversary celebration of the formal diplomatic relations between the two countries in a post-apartheid South Africa. However, it is important to note that the formal ties between the two countries were preceded by a long-standing relationship between the Communist Party of China (CPC) and the anti-colonial and anti-apartheid liberation movements in South Africa.
Historical ties between the CPC and the African National Congress (ANC) date back to the Bangdung Conference in Indonesia in 1955. These ties were further consolidated when leading members of the armed wing of the ANC went to China in 1961 for military training when the ANC launched its armed struggle. Subsequently, the first combatants members were part of the group that were tried and sentenced to life imprisonment with Nelson Mandela on Robben Island.
The bonds between the South African liberation movements and the CCP were built up over many decades and culminated in the establishment of official diplomatic ties between post-apartheid South Africa and China in 1998. This bond is reflected in the strong economic ties between the two countries. Today China is South Africa’s most important global trading partner and South Africa is China’s largest trading partner in Africa. China has become an important investor in South Africa’s emerging local infrastructure and development projects and, South African firms invest in China’s expanding market. China is a significant investor in South Africa and supports the country’s proposed local infrastructure development projects and many South African firms are invested in China.
The CIIE provides an opportunity for China and South Africa to strengthen their trade and economic co-operation. This year saw a significant increase in two-way trade between the two countries exceeding R900 billion with South Africa’s exports passing R500bn. In August importing companies from China signed contracts for renewable energy products, precious metals and agricultural products.
China also committed to support South Africa’s energy and electricity infrastructure programmes to address challenges in this sector. The South African Minister of Trade, Industry and Competition estimated that during the Joint Economic and Trade Committee (JETC) engagement, in August, deals worth about $2bn were signed.
The South African Revenue Services trade statistics published in September 2023 reveals that South Africa recorded a trade balance surplus in August 2023 where the country’s exports exceeded imports. For the September 2023 overview, South African exports and imports to the top five countries were China 11.3%; US 8.1%; Germany 6.7%; Mozambique 5.8%; the UK 5.5%. For imports to South Africa the top five were China 19.4%; US 8.8%; Germany 8.5%; United Arab Emirates 6.7% and India 5.9%. The main products exported to China were gold, diamonds and iron ore.
The report indicated that over the last 26 years exports from South Africa to China increased at an annual rate of 16.3% from $407 million in 1995 to $20.6bn in 2021. This is indeed a significant level of trade between the two countries.
The visit of the South African deputy president and his delegations was an important follow-up on previous high-level engagements in 2023 to consolidate the bond between the two countries and commemorate the 25 years of official diplomatic relations. Other engagements in 2023 included meetings on People-to-People Exchange Mechanisms (PPEM); Strategic Dialogue and, the Joint Economic and Trade Committee (JETC). While these engagements are significant, however, it is important to note that there is growing concern by both sides that South Africa must move away from being an exporter only of primary products and move towards exporting more agricultural and manufactured goods. South Africa’s exports of motor vehicles to China from the Eastern Cape and KwaZulu-Natal is increasing slowly.
The CIIE offers an opportunity for small businesses and small farmers from South Africa to explore markets in China. There is a growing and emerging group of young entrepreneurs and innovators in South Africa looking for partners and investors from China for opportunities for collaboration. Provinces such as the Western Cape, Limpopo, KwaZulu-Natal and, Mpumalanga are major agricultural provinces in South Africa. However, their focus seems to be the European and American markets. Perhaps it is time for the South African government and the provincial economic agencies to refocus towards the huge markets in China as well.
The Western Cape was well represented at the CIIE by a senior trade manager for Middle East and Asia of the Western Cape Tourism, Trade, and Investment Promotion Agency (Wesgro). Wesgro is one of South Africa’s most proactive provincial economic agencies in the country. The agency exhibited the Western Cape’s wide variety of agricultural, fishery and viticulture products.
Consumers in China are constantly looking for a consistent and constant supply of essential products that may not become the target of geopolitical tensions. The CIIE offers South African and Western Cape producers the opportunity to showcase their products. Despite the enthusiasm for expanding trade with China, many small businesses face serious challenges of electricity and transport infrastructure challenges.
The Western Cape also has some unique products and an environment that is not found anywhere in the world. At the CIIE products such as wine, fruit, rooibos tea, fynbos flowers and olive products from the Cape Winelands and the Western Cape in general were exhibited. The province is also home to some of Africa’s best tourist destinations. It’s coastline stretches from the Atlantic ocean in the west to the Indian ocean in the east. About 10 Wesgro exporters attended the CIIE with wine, tea and seafood products. China is the province’s 6th largest export market.
Expo’s such as the CIIE offer opportunities for South Africa farmers and manufacturers to showcase their products in one of the world’s largest and most stable markets and growing economies. The South African government should make a concerted effort to promote the diverse products from the nine provinces into China’s markets. Of course the enormous challenges of transport and electricity infrastructure presents a serious handicap for the export of fruit, agricultural, raw materials and manufactured goods from the provinces of Limpopo, the North West, KwaZulu-Natal, the Free State, the Northern Cape and the Eastern Cape and should also be a focus in the economic collaboration between the two countries. With China’s possible support and investment in the energy, electricity and transport sector perhaps the next 25 years of diplomatic relations will introduce a greater balance in economic co-operation.
Josie is an advisor at the China Africa Centre, Zhejiang University International Business School (ZIBS), and Professor Adjunct at the University of Venda.