China is South Africa’s largest trading partner, both overall and within the BRICS (Brazil, Russia, India, China and South Africa) grouping.
In 2022, China accounted for 9.4% of South Africa’s exports and 20.2% of South Africa’s imports, according to the South African Revenue Service (Sars). In rand terms, exports to China totalled R188.4 billion, while South Africa imported R367.4bn, resulting in a trade surplus in favour of China worth R179bn.
South Africa’s exports to China are dominated by two categories, namely mineral products, as well as products of iron and steel. Mineral products are raw materials. In the case of exports to China, this is dominated by iron ore, but also includes coal, manganese and chrome ores, as China is the world’s largest producer of steel, accounting for 57.4% of global steel production in April 2023, according to the World Steel Association.
The export of products of iron and steel is dominated by ferroalloys, that is semi-manufactured combinations of iron and other ores such as chrome or manganese, that are inputs into the steel-making process.
Mineral exports to China totalled R120.4bn or a massive 63.9% of total exports to China, while the products of iron and steel were R37bn, or 19.6% of exports to China. These two categories therefore accounted for 83.5% of exports to China.
The third largest export category is precious metals, that is platinum group metals and gold. This category amounted to R8.1bn or 4.3% of exports to China, while the fourth largest category was fruit and vegetables at R7.6bn or a 4.1% share.
The expectation is that fruit and vegetables, which also includes grains, could exceed precious metals in 2023, as South Africa exported 108 104 tonnes of yellow maize to China between March 25 and April 14 this year, according to the South African Grain Information Service (Sagis) compared with average exports to China of only 4 000 tonnes annually since 2013.
The only other export category that exceeded R4bn in 2022 was wood pulp and paper, with a 2.1% share.
Imports from China are dominated by machinery and products of iron and steel, but together they only account for 55.7% of imports. Machinery imports amounted to R169.9bn or 46.2% of imports, while products of iron and steel totalled R34.6bn for a 9.4% share.
Chemicals were the third largest import category at R33 billion or 9.0% share. Textiles are next at R27bn, with a 7.6% share. The increased penetration of Chinese brands into the South African vehicle market is shown in the fifth largest import category at R20.5bn for a 5.6% share.
In total, there were 12 import categories where imports exceeded R4bn, which shows that Chinese exports to South Africa were far more diversified than South African exports to China, where only five categories exceeded R4bn.
Helmo Preuss: Economist at Forecaster Ecosa
BUSINESS REPORT