18-07-2025
Mashatile calls for increased Chinese investment as trade deficit with China surges
Deputy President Shipokosa Paulus Mashatile delivers a keynote address at the South Africa-China Investment Forum, as part of his working visit to the People's Republic of China.
Banele Ginidza
Deputy President Paul Mashatile has issued a compelling invitation to Chinese corporations, advocating for increased investment in South Africa.
Speaking at the South Africa-China Investment Forum in Beijing on Thursday, Mashatile highlighted a significant shift in the trade dynamics between the two nations, revealing that the trade deficit with China has escalated dramatically from less than $1 billion in the period between 1988 and 2000 to an alarming $9.71bn by 2023.
Mashatile said ddressing these challenges necessitated expanding South Africa's export portfolio, encouraging value-added exports, and establishing a more balanced trade relationship.
"We need to develop a more coordinated and strategic approach. We need to address challenges such as access to the Chinese market due to factors like tariff and non-tariff barriers, distance, and competition from other countries," Mashatile said.
The essence of this trade imbalance, as Mashatile pointed out, stems from the current nature of the economic relationship where South Africa primarily exports raw materials and minerals while predominantly importing manufactured and capital goods from China.
This disparity has raised concerns regarding the sustainability of such a model, particularly as both South Africa and China navigate increasing tariff barriers imposed by the United States.
"As South Africa-China relations continue to deepen, new opportunities emerge for Chinese businesses seeking to enter the South African market, particularly in sectors such as renewable energy, green hydrogen, energy storage, infrastructure and logistics, our Special Economic Zones (SEZs), pharmaceuticals and medical devices, and the beneficiation of critical minerals, as well as in the digital economy," he said.
Mashatile said South Africa sought to attract investments to increase greenfield investments, infrastructure investments, unlock funding or financial support, partnerships with SOEs, technology transfer and innovation partnerships, investments in SEZs and industrial parks, black industrialist partnerships, as well as capacity and technical assistance for SEZs.
"Our SEZs offer an internationally competitive value proposition for the country with an attractive suite of incentives," Mashatile said.
"They are located across the country, and each SEZ has unique offerings for investors, some of which could include tax relief, reduced corporate rate taxes and reduced costs for key inputs such as land, water and electricity."
Mashatile highlighted the infrastructure investment plan as being in place to drive a range of projects in energy, water and sanitation, transport, digital infrastructure, human settlements, and agriculture and agro-processing.
"The plan is supported by an Infrastructure Fund, offering investment opportunities in water development and irrigation projects across nine provinces, a road network expansion, a rehabilitation and maintenance program for construction companies, and high-demand spectrum," he said.
Mashatile said South Africa's mineral exports, agricultural commodities, and manufactured items have achieved significant penetration in the Chinese market, aided by a steady flow of investment from Chinese companies since the announcement of President Cyril Ramaphosa's investment mobilisation drive.
He said some of the existing partnerships included a major significant investment by the Industrial and Commercial Bank of China (ICBC), which purchased a 20% stake in the assets and earnings of Standard Bank for $5.5bn.
Another major Chinese electronics manufacturer, Hi-Sense, entered the South African market in 1997. In 2013, the company established an industrial park.
Mashatile cited other Chinese flagship companies such as Zhong Xing Communications (ZTE) and Huawei Technologies that were also expanding their presence in South Africa.
"Over the last decade, 48 Chinese companies invested in South Africa with a capital investment of over $11.69bn," he said.
BUSINESS REPORT
