The People’s Republic of China is tightening its economic embrace of Africa, with South Africa emerging as a key partner, as Beijing responds to shifting global trade dynamics and pushes to build stronger local industries abroad.
A Twofold Strategy
At the heart of this approach lie two drivers. First, it is reactive: a direct response to the changing global trading system, particularly U.S.-China tensions.
Second, it is proactive: a long-term strategy to create more advanced, localised industries in partner countries that also secure China’s economic future.
Investments on the Ground
Across the continent, Chinese foreign direct investment (FDI) is rising sharply. This includes:
Factories and Mines: Chinese firms are setting up plants to manufacture goods and extract resources.
Infrastructure Projects: Ports, railways, and energy grids—many under the Belt and Road Initiative—are reshaping African economies.
Trade Agreements: New deals are opening the door for easier cross-border flows of goods and services.
The U.S. Factor and the AGOA Question
The trade tensions between Washington and Beijing play a central role in China’s African pivot. The U.S. has imposed tariffs on a wide range of Chinese goods, making them less competitive in American markets.
To offset this, China has sought alternative markets and partners—Africa chief among them.
South Africa finds itself at the crossroads of this global tug-of-war.
Under the African Growth and Opportunity Act (AGOA), African countries can export goods to the U.S. duty-free. Yet, with mounting U.S. concerns over South Africa’s political ties with Russia, its access to AGOA has come under scrutiny.
Even beyond geopolitics, AGOA rules bar countries from acting as a “back door” for Chinese exports. Products made primarily in China but finished in South Africa cannot qualify for AGOA benefits.
Here, China has seized the moment: if South African goods face hurdles in reaching U.S. markets, Beijing is ready to step in—offering investment and guaranteed demand. This reduces South Africa’s reliance on Washington while tying its economy closer to China.
Deepening Local Value Chains
China’s strategy extends beyond short-term trade adjustments. It is deliberately deepening value chains within Africa.
Traditionally, Africa exported raw materials—cobalt from the DRC, iron ore from South Africa—that were processed in China before returning to the world as finished goods.
Now, Chinese firms are building factories on African soil to process these resources locally. For example, instead of shipping cobalt to Asia, China might build a battery-component factory in South Africa.
The payoff is mutual:
For South Africa and Africa: more skilled jobs, technology transfer, and higher-value exports.
For China: more secure supply chains, new consumer markets, and stronger political influence.
The Bigger Picture
The strategy can be seen as China building a bakery on the farm. Previously, it bought apples from African farmers to bake pies in China. Now, it is building a pie factory directly on African soil—providing jobs and skills locally while ensuring steady access to apples and a loyal customer base.
China’s growing role in Africa is more than opportunistic investment.
It is a calculated reshaping of global trade routes and supply chains, designed both to withstand pressure from Washington and to create deeper, mutually dependent partnerships.
For Africa, the question is whether this shift will be a stepping stone to greater economic independence—or a new form of reliance, this time with Beijing at the centre.