South Africa Pushes for Balanced Trade with China Ahead of Key Summit
South African President Cyril Ramaphosa has called on China to address the trade imbalance between the two nations, just days before the 2024 Forum on China-Africa Cooperation (FOCAC) Summit is set to begin in Beijing.
The request underscores the challenges facing Chinese President Xi Jinping as he prepares to encourage African leaders to increase their imports of Chinese goods.
During his arrival in Beijing on Monday, President Ramaphosa emphasized the need to narrow South Africa’s trade deficit with China, which has grown as South African imports from China continue to outpace exports.
“As South Africa, we would like to narrow the trade deficit and address the structure of our trade,” Ramaphosa stated during talks with President Xi at Beijing’s Great Hall of the People.
He also urged for “more sustainable manufacturing and job-creating investments” in South Africa.
China, the world’s second-largest economy, is South Africa’s largest trading partner. However, the imbalance in trade has raised concerns in Pretoria, especially after China fell short of fulfilling a pledge made at the previous FOCAC Summit in 2021 to purchase $300 billion worth of African goods.
With Western restrictions on Chinese exports such as solar panels and electric vehicles looming, Xi faces a daunting task at this year’s summit, which opens on Wednesday. Convincing African nations to increase their imports from China is a priority for Beijing, especially as the country looks to find new markets for its excess production capacity.
The summit is also expected to address China’s role as a major lender to Africa, where many nations are grappling with mounting debt. Notably, China’s lending to Africa rose for the first time in seven years in 2023, signaling a potential shift in Beijing’s approach to the continent.
China has already begun to recalibrate its lending practices, focusing more on sustainable projects such as solar farms and hydroelectric dams, while scaling back on large-scale infrastructure investments. This aligns with Xi’s broader vision of realigning China’s relationships with the Global South around “small but beautiful projects.”
During their meeting, President Xi proposed elevating China-South Africa relations to a “new era of all-round strategic partnership.” The two leaders also agreed to deepen cooperation in key areas, including agriculture, health, medical sciences, and infrastructure development. They also identified new opportunities for collaboration in artificial intelligence, the digital economy, and renewable energy.
As South Africa looks to move beyond over a decade of economic stagnation, President Ramaphosa is seeking China’s support to revitalize the country’s infrastructure, which has been plagued by persistent power cuts, inefficient ports, and inadequate rail systems.
China’s willingness to assist in these areas could prove crucial in helping South Africa overcome its economic challenges.
Source: CNBC AFRICA
