At a time when global trade is fragmenting and traditional partnerships are under strain, China’s newly-proposed free trade deal with Africa offers something that is increasingly rare - certainty, scale, and long-term intent.

For South Africa, the question is : how do we respond to the proposed trade deal? In February this year, South African Trade and Industry Minister Parks Tau and his counterpart from the People’s Republic of China, Minister Wang Wentao, signed a Framework Agreement on Economic Partnership for Shared Prosperity in Beijing.

The agreement covers cooperation in trade, investment, new energy and multi-lateral relations. The deal also laid the groundwork for giving 100% duty-free access to SA exports into China and will boost Chinese investment into SA. This creates significant market opportunities for SA exporters.

As Minister Tau commented on the occasion of the signing of the deal, “China-South Africa relations continue to deepen, new opportunities emerge for South African businesses seeking to enter the Chinese market, particularly in sectors such as mining, agriculture, renewable energy, and technology.”

In the view of the SA’s chapter of the BRICS Business Council, this agreement provides preferential market access for a broader range of African goods into China and opens the door for South African manufacturers, agro-processors, and technology firms to scale exports into one of the world’s largest consumer markets.

This trade agreement does not automatically translate into benefits for SA. Our country’s trade balance with China has historically been skewed towards SA exporting raw material to China and SA importing high-value finished goods from China. Without deliberate intervention, this trade imbalance risks deepening.

SA exported about $13.5 billion worth of goods to China in 2025, making China its largest single export destination. More than two-thirds of those goods are concentrated in ores, metals, and other resource-based products, with iron ore alone accounting for the overwhelming share.

Meanwhile, SA imported about $25 billion in Chinese goods, primarily machinery, electronics, vehicles, and manufactured products. The asymmetry is clear, SA supplies inputs; China supplies finished goods.

The real prize for SA lies in changing this trajectory, moving up the value chain, expanding beneficiation, and positioning SA as a hub for regional manufacturing linked into Chinese and broader BRICS supply chains.

What is required from Government and Private Sector

To change SA’s trajectory, we need a coordinated national effort. The government must move decisively to align our country’s industrial policy with the sectors most likely to benefit from the trade deal with China, while accelerating economic reforms that improve the ease and cost of doing business in SA.

This means ensuring reliable energy supply, improvement of ports and rail efficiency, and regulatory certainty must be prioritised to ensure that SA takes full advantage of this trade agreement.

Equally, the private sector must come to the party. SA firms need to actively pursue partnerships with Chinese counterparts, not only as exporters, but as co-investors and collaborators in technology transfer, skills development, and market expansion.

The framework also has broader continental implications. As the African Continental Free Trade Area (AfCFTA) gains traction, SA sits at a strategic intersection.

It is not only one of China’s largest trading partners in Africa, it is also one of the continent’s most industrialised economies, with established capabilities in automotive manufacturing, pharmaceuticals, agro-processing, and increasingly, green mineral beneficiation.

These are not hypothetical sectors. They are existing platforms that can be scaled with the right conditions in place.

And China, for its part, is no longer simply the factory of the world. It is a leader in renewable energy, digital infrastructure, and advanced manufacturing. These are industries that SA urgently needs to grow its economy.

Increasingly, Chinese firms are not just exporting to Africa; they are investing, localising production, and seeking partnerships that extend beyond trade into production ecosystems.

The trade agreement promises market access; institutions facilitate dialogue. What is needed is execution, bankable projects, faster regulatory approvals, harmonised standards, and targeted support for SMMEs trying to enter Chinese value chains.

Local businesses also need to be assisted to access blended finance that can de-risk investments and accelerate project delivery.

These are important interventions, which are the mechanics of shifting from extraction to production. SA must use the framework with China to practically build its domestic industrial capacity at scale.

This requires a shift in mindset as much as shift in policy. Improving current trade volumes patterns, however impressive, are no longer the measure of success if they are not beneficiation-driven.

The next phase of SA–China relations will not be defined by how much the two countries trade, but by what we can build together.

Dr Nicolaou is a member of the SA Chapter of the BRICS Business Council

Caption:

Dr Stavros Nicolaou, member of the SA Chapter of the BRICS Business Council
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