BRICS: SA-China trade is nothing unfair, says SA Chamber of Commerce

Two women and two men with SA and China flags in the background

President Cyril Ramaphosa and South Africa’s First Lady, Dr Tshepo Motsepe with President Xi Jinping and China’s First Lady Peng Liyuan at a ceremony during a previous visit to the People’s Republic of China. File Picture

Published Aug 17, 2023


South Africa should improve its industrialisation and manufacturing capacity in a bid to balance the trade deficit in the massive trade relationship with China, the second biggest economy in the world.

Both countries are members of the trailblazing BRICS bloc of emerging economies, comprising of Brazil, Russia, India, China and South Africa.

The BRICS bloc is in the limelight ahead of the 15th summit to be hosted at Sandton Convention Centre, Johannesburg from Tuesday to Thursday next week, under the theme: “BRICS and Africa: Partnership for mutually accelerated growth, sustainable development, and inclusive multilateralism”.

On Tuesday, President Cyril Ramaphosa will host Chinese President Xi Jinping on a State Visit at the Union Buildings in Pretoria.

President Cyril Ramaphosa with President of China Xi Jinping at the Union Buildings during a previous State Visit. File Picture: Oupa Mokoena/African News Agency (ANA)

Despite the negativity channelled towards the two nations’ increasingly close ties, Mtho Xulu, president of the South African Chamber of Commerce and Industry said South Africa is scoring big from the mutually beneficial relationship with Beijing.

“Well, we are benefiting by the fact that we are selling (minerals to China). There is income that is coming from that country. What China has been able to do is to create an industry that converts raw materials into value-added goods. That is something we can learn from them,” Xulu said in an interview with broadcaster eNCA on Thursday morning.

“For as long as we are exporting, we need to establish how we can create an exploration fund to build more mines. So, if our competitive advantage is our (mineral) deposits, we need to invest in those deposits and make sure that we build industries around those deposits, if we cannot create value-added goods, let us rather create other industries that are linked to those minerals.

“So it is not unfair competition. Obviously they are doing what they can do with those minerals. We need to look at what is our specific benefit that we can derive from these minerals and I believe we need to create value-chains along the strategic minerals that we possess as South Africa,” he said.

Xulu said it is highly beneficial for South Africa to continue to elevate its trade ties and proximity to China, as the Asian giant grows in leaps and bounds.

“We cannot dispute it - China is the biggest member of the BRICS bloc and it is going to continue to become a very big economy globally. So what we need to do as industry, we are looking at the trade deficit, we import more than we export (to China) but our strength is around what we export to China, how we are able to leverage and export more and also start building industries in South Africa.

“Most of our exports to China are around minerals, but we have not seen growth in an exploration fund that seeks to build more mines (in South Africa) and create value chains and industries in South Africa. As China seeks to import more of our raw materials, we need to see how we are investing in South Africa to grow the opportunity,” he said.

He said as South Africa exports more and more minerals into China’s gigantic economy, a market of more than 1,4 billion people, Pretoria should focus on creating the value chains which boosts the local economy and creates much-needed jobs.

Last week, IOL reported that Trade, Industry and Competition Minister Ebrahim Patel concluded talks with the signing of several business deals with a Chinese delegation led to South Africa by Minister of Commerce Wang Wentao.

Trade, Industry and Commerce Minister Ebrahim Patel and Chinese Commerce Minister Wang Wentao presided at a trade deals signing ceremony, supported by Chinese Ambassador to SA, Chen Xiaodong and South Africa's Ambassador to China Siyabonga Cwele. File Picture: Supplied

Patel said the Chinese delegation’s visit led to significant outcomes to boost trade, investment and job creation between the two nations.

Patel, who was supported by South Africa’s Ambassador to China, Siyabonga Cwele, made the remarks at Sandton, Joburg, following engagements on Wednesday and Thursday with Wang, who was supported by Ambassador of China to South Africa, Chen Xiaodong.

About 20 Chinese enterprises, including China Poly Group, China Chengtong, China National Agricultural Development Group, BYD and CATL, participated in the event.

South African and Chinese entities signed trade deals last week at an event presided by Trade, Industry and Commerce Minister Ebrahim Patel and Chinese Commerce Minister Wang Wentao. File Picture: Supplied

The talks were held during an official session of the Joint Economic and Trade Committee (JETC) between the two friendly nations, and focused on increasing trade and changing the composition of the trade, in a bid to ensure that South Africa exports more manufactured and value-added products to China.