Balancing Beijing and Washington: South Africa’s Recent Strategic Trade Gamble

Against the backdrop of wider economic uncertainty from the US’ tariff policy, South Africa’s relations with China have undergone a recent renaissance, in a geopolitical shift towards closer BRICS co-operation. Bolstered by an icy May White House reception characterised by confrontations over unfounded white genocide allegations, President Ramaphosa’s consolidation of trade links with its largest trading partner China have upended its traditional pro-Western stance.

Moving away from natural resources, South Africa recently announced the 2025-9 ‘China Trade and Investment Package’ (CTIP) in August, a strategic initiative promoting a diversification of economic relations in new industries such as pharmaceuticals and new emphases on skills development alongside addressing regulation.

Economic Context

Following the establishment of the historic ‘Government of National Unity’ (GNU), South Africa’s recent pivot towards China arrives at the disjuncture of uneven domestic economic recovery alongside ever-growing international ambition.

Domestic

Domestically, South Africa’s economic outlook has improved in recent years, with current GDP forecasts improving from 0.7% to 1.5-1.6% growth. Following the Consumer Price Index’s (CPI) drop to 3% last November, consequent interest rate cuts have also increased household spending power, whilst daily electricity ‘load-shedding’ since the 2010s have quelled since 2024. Following structural reforms of state supplier Eskom which at one point reduced growth by 1.5% in 2023, South Africa’s growth potential therefore has undoubtable room for expansion.

Nonetheless, investment outlooks from the OECD and global credit insurer Coface highlight the country’s unsustainable debt outlook, increasing to 77% of GDP. As such, elevated debt-servicing costs have limited the government’s ability to stimulate social spending and public investment, whilst uneven sector growth and reduced FDI inflows additionally harm short-term economic growth.

International

With Johannesburg as the seat of December’s G20 conference, South Africa’s global ambitions in representing the wider continent and broader international relations are also remarkably apparent.

As an original member of the BRICS alliance, Ramaphosa’s desire to carve out a voice in response to American economic alienation occurred this past July at the annual BRICS summit in Rio. Reducing reliance on traditional Western markets, President Ramaphosa’s focus on multilateral regional governance and AI leadership in Rio gives a window into his desire for increased self-assertion and closer relations with China as a fellow BRICS partner.

In doing so, Ramaphosa’s approach mirrors domestic Pew polling highlighting increasing favourability of Beijing in comparison to 2024 and a wider Global South sway towards China, from notable countries such as India.

Economic Impact

Against this economic backdrop therefore, South Africa’s latest CTIP spells potential opportunities for increased trade diversification in an uncertain global economic environment. Most importantly, this has occurred through promises in investment, trade diversification and skills development, correcting existing Sino-African trade relations whilst partially remedying reduced FDI inflows from the US.

Wary of an existing trade deficit of highly manufactured imports in comparison to raw material exports, investment within South Africa’s economy represents a pivotal point within the 2025-8 CTIP.

At the sector level, Beijing-backed automaker BYD have eyed factory sites in South Africa to accelerate China’s global EV ambitions, whilst continuing prior Chinese energy investment within wind, solar and battery storage have the ability to upgrade grid capacity. In doing so, the CTIP presents opportunities for improved domestic electricity generation which can super-charge South Africa’s industrialisation and increase export competitiveness. This represents a victory for the GNU, whose lack of current trade diversification poses existing problems for international investors worried about Chinese exploitation. Beyond existing re routing of agricultural exports from America towards the $200B Chinese market’s growing middle class, sustained manufacturing growth enabled by Beijing-led investment has the ability to create healthier trade relations between both nations and increase global confidence.

Lastly, closer co-operation on skills development to ‘service and provide aftercare maintenance’ within varied economic sectors, can further increase competitiveness. By aligning skills especially with ‘identified priority sectors’ such as the digital economy as mentioned by Minister in the Presidency Khumbudzo Ntshavheni, South Africa can right domestically-acknowledged trade imbalances ‘mimicking extractive colonial era trade relations’. Harnessing academic partnerships following a July memorandum of understanding on AI co-operation between both nations, Ramaphosa’s diverse economic outlook within Sino-African relations has begun to turn a leaf in a currently uneven diplomatic relationship.

To conclude, South Africa’s increased economic relations with China is the latest in a world trend of increasing Global South distrust of the USA following hostile trade policies. Nonetheless, the enticing opportunities posed by new economic policies need to be cautiously balanced from the GNU with the recognition of American influence in the domestic economy. As DA leader Mr Steenhuisen has said, ‘those who think we can say goodbye to the West and look at China haven’t checked the numbers’. With 75% of all FDI inflows coming from Western sources, short to medium term diplomacy is reliant on balance and a recognition that China doesn’t replicate a direct substitution for America.

Nonetheless as the latest CTIP showcases, South African allyship with America isn’t steadfast, with the risks of economic alienation bringing with it a shift in diplomatic viewpoints which can slowly remake the current world order.