Pretoria leans harder onto China in wake of G20

By contrast, total goods and services trade with the United States amounted to only $26.2 billion in 2024, marginally down from the previous year, with South Africa enjoying a surplus driven by vehicles, citrus and ferro-alloys exported under the African Growth and Opportunity Act, which accounted for more than one-fifth of bilateral exports. American trade has remained essentially flat since 2022, constrained by the impending expiry of AGOA preferences which have been dangling over the country – aside from the tensions with the Trump administration, South Africa graduated out of the requirements of the programme in several respects some years ago, and our eventual exclusion was inevitable. in September 2025 and sporadic political frictions.

But we run a trade surplus with the West, and a trade deficit with China. not only that, but China tends to get a lot of strangely juicy deals here.

In several places around the country since 2013, SAPS has dedicated special police units trained in Mandarin to prioritise the security of Chinese citizens in their settlements and neighbourhoods. The Chinese government has also been inspecting our military installations every few years for decades. Plus there is that massive Special Economic Zone in Limpopo, with infrastructure and utilities paid for by the South African taxpayer.

Chinese businesses tend to be fraudulent and criminal on the whole. Earlier this year, Temu and Shein were found to have, at enormous cost and effort, rekitted their entire supply chain to circumvent customs laws by micropackaging all their shipments. Then there’s the overall trade misinvoicing problem. Chinese firms systematically under-invoice exports to South Africa by 30–60%, evading duties and VAT. This caused ~R80–120 billion in lost revenue in the past six fiscal years, flooded markets with cheap steel and textiles, and crippled local manufacturers while funding capital flight back to China.

But onto this weak foundation, the flood of cheap Chinese steel has been like a ton of bricks. And now enters Chinese capital. Between 2023 and 2025, Chinese-backed consortia announced or began building entirely new steel mills: a giant Tosyali plant in Richards Bay funded mostly from China, a planned 2–3 million-ton works tied to Seriti Resources and its Chinese shareholders, and a clutch of smaller stainless and special-steel mini-mills quietly registered across Gauteng and KwaZulu-Natal. Where South African furnaces went cold, Chinese ones are rising, often on the same industrial graveyards, turning the country from Africa’s steel champion into a net importer largely supplied, and increasingly owned, by China.

In the context of all this disingenuous, selfish and one-sided economic behaviour, China’s cumulative stock in South Africa seems a little more alarming. It reached $13.2 billion by the end of 2024, though greenfield commitments have fallen sharply to $650 million in the period 2020–July 2025 from $3 billion in the preceding five years. American flows turned negative continent-wide in 2024, reflecting repatriation and caution over regulatory uncertainty.

Beyond commerce, several large-scale frameworks underpin the relationship. The Forum on China-Africa Cooperation Beijing Action Plan for 2025–2027 commits China to ten partnership programmes spanning industrialisation, agricultural modernisation, health, security and people-to-people exchanges, with South Africa positioned as a primary beneficiary.

The Belt and Road Initiative continues to finance transport and energy projects, while the New Development Bank, headquartered in Shanghai but with South Africa as a founding member, has approved loans exceeding $5 billion for renewable and infrastructure schemes across the BRICS economies.

Financial integration has advanced through a renewed bilateral currency swap line of 30–60 billion yuan, the longstanding renminbi clearing centre in Johannesburg, and, since November 2025, Standard Bank’s direct participation in China’s Cross-Border Interbank Payment System (CIPS), the first such access granted to an African institution. BRICS discussions on alternative settlement mechanisms have accelerated, though they remain largely exploratory.

On 20 November 2025, Standard Bank, Africa’s largest lender by assets, became the first bank on the continent to activate direct access to CIPS. The service, licensed to Standard Bank in June, was formally inaugurated at the South African Reserve Bank in the presence of Lesetja Kganyago, governor of the SARB; Pan Gongsheng, governor of the People’s Bank of China; and Wang Hongbo, chairman of CIPS.

CIPS permits financial institutions to clear and settle renminbi-denominated payments directly with Chinese counterparties, bypassing the currency conversions and correspondent banking chains that have traditionally inflated costs and lengthened settlement times for Africa-China transactions. With China now accounting for a larger share of African imports than any other source (34 per cent of surveyed businesses in Standard Bank’s 2024 Trade Barometer, up from 23 per cent the previous year) the removal of these frictions carries material economic weight.

The two central-bank governors described the arrangement as a milestone for commercial payments between the continents. The practical consequence is that African importers and Chinese exporters can now transact in renminbi with the same speed and cost as domestic transfers. Pretty much all forms of business for Chinese and African operators are streamlined by this system.

And this comes at a time when Western-led payment systems face growing political constraints. The US has used dollar inflation as a means of taxing forex holders, a sort of imperial tribute system which ensures that they can implement monetary policies which would be suicidally reckless for any other financial power, but which comes at the cost of dollar holders. A lot of countries are starting to get a bit tired of this.

As a smaller but fairly important footnote to all of this, the Chinese-South African joint venture at Stellenbosch University established the world’s longest intercontinental quantum-secure communication link in March this year, spanning 12,900 kilometres via the Jinan-1 microsatellite, enabling unhackable key distribution between Beijing and a ground station near Durban. This is fairly essential to backdoor diplomacy and military cooperation, and military and security cooperation has indeed been expanding. Embedded in the FOCAC plan, it includes joint training, law-enforcement programmes and occasional trilateral naval exercises with Russia.

In all this context, the Initiative for Supporting Africa’s Modernisation launched at the G20 this past week, is more or less just adding wrapping paper to the Christmas present at this point.

Taken together, these arrangements represent a deliberate, multi-domain deepening of ties that has proceeded largely undisturbed by Western sanctions regimes or competing initiatives.

But at the same time, we are seeing the rapid entrance of American mega firms, most of which are known to operate on loss-leading strategies to dominate and monopolise markets, like Wallmart and Amazon. We are also seeing the return of an old style of cronyism centred around Rothschild Capital’s vehicle B4SA, which is handling the lions share of the national infrastructure investment schemes.

Europe has managed to choke off our energy supply by funding green activists, and gotten massive “green hydrogen” deals in exchange, as well as big and profitable “green” loans.

South Africa certainly seems to be open for business, but in a strangely one-sided way, where we are allowed some infrastructure, but no industry. We are allowed tourism revenue, construction, and finance, but nothing tangible, nothing domestic, and all the ingredients necessary for a functioning local economy are being replaced or bought out by foreign powers.

From backwoodsmen carrying water and hewing timber, we became an autarchic powerhouse. We became democratic, redistributed a little wealth, but in no lasting way, while letting the geese that laid the golden eggs be sold for pennies or chopped for Sunday roasts.

And so we return to hewing wood and carrying water, but for someone new whom we call friend.