{"id":39915,"date":"2026-10-19T18:09:03","date_gmt":"2026-10-19T18:09:03","guid":{"rendered":"https:\/\/wedodis.co.za\/news\/?p=39915"},"modified":"2026-10-19T18:09:11","modified_gmt":"2026-10-19T18:09:11","slug":"r165-billion-challenge-the-rising-chinese-influence-in-south-africa","status":"publish","type":"post","link":"https:\/\/wedodis.co.za\/news\/r165-billion-challenge-the-rising-chinese-influence-in-south-africa\/","title":{"rendered":"R165 Billion Challenge: The Rising Chinese Influence in South Africa"},"content":{"rendered":"
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\n \"R165 <\/div>\n<\/p><\/div>\n

For over 30 years, South Africa\u2019s manufacturing industry has faced a continuous downturn.<\/p>\n

The influx of inexpensive Chinese products, exacerbated by the tariff conflict instigated by former U.S. President Donald Trump, is placing additional strain on the remnants of its manufacturing sector.<\/p>\n

Since the beginning of this decade, Chinese exports to South Africa have surged, increasing by nearly R165 billion in the first eight months of the current year compared to the same timeframe six years earlier.<\/p>\n

Among the continent’s largest economies, only Nigeria has seen a more significant rise.<\/p>\n

This trend has intensified since Trump regained the presidency, with shipments from China to South Africa rising 29% in the initial eight months of 2026 relative to the previous year, as Chinese firms seek new markets in light of increasing barriers in the U.S.<\/p>\n

South Africa faces a substantial trade imbalance with China, which represents over one-third of the country\u2019s manufacturing imports, while contributing only about 5.9% of its exports, per central bank statistics.<\/p>\n

Manufacturing activity has contracted for three consecutive quarters as of June.<\/p>\n

Chinese manufacturers, bolstered by state support and a depreciated currency, not only undercut local producers in South Africa but also create competitive challenges for rivals in nations such as Brazil and Vietnam, who have taken steps to impose tariffs on Chinese steel imports. Recently, the European Union reached an agreement with China to limit the export of hybrid cars to member states.<\/p>\n

South African manufacturers are particularly at risk, already faced with escalating energy costs, a rigid labor market, excessive regulations, inadequate infrastructure, and sluggish economic growth.<\/p>\n

Most exposed<\/h2>\n
\"R165<\/a><\/figure>\n

The latest Manufacturing Vulnerability Index from Moody\u2019s Ratings positions South Africa as the most vulnerable to competition from Chinese trade among eight assessed African nations.<\/p>\n

This vulnerability is attributed to the country\u2019s “relatively large manufacturing sector with a high reliance on foreign, and specifically Chinese, value added in exports” along with moderate and declining competitiveness.<\/p>\n

The International Trade Administration Commission is currently examining five new requests from businesses seeking protection against a surge in imports.<\/p>\n

The requests cover a range of materials including gypsum plasterboard utilized in ceilings, polyethene terephthalate for beverage containers, and cold-rolled steel.<\/p>\n

Among those involved are the South African Fasteners Manufacturers\u2019 Association, which represents bolt and nut producers, Saint-Gobain Construction Products South Africa, ArcelorMittal, and KAP’s subsidiary Hosaf.<\/p>\n

“Over the years, there has been a general increase in the case load relating to increased imports,” ITAC noted in a response. <\/p>\n

“Part of that increase can be attributed to increased imports from East Asia, including China.”<\/p>\n

At Alvern Cables in Germiston, near Johannesburg, Works Director Jaycen Padiachy has witnessed the effects of the flood of Chinese imports firsthand.<\/p>\n

This company, founded in 1967, manufactures low- and medium-voltage cables for homes, industrial facilities, and infrastructure and had anticipated a rebound in demand following the global pandemic. <\/p>\n

However, Padiachy expressed concern as the recovery has not materialized. “What we are noticing now is a lot of competition in the market; imports are affecting our business.”<\/p>\n

To adapt, the factory has modified its operational strategy, shortening work hours temporarily due to current market conditions. “Under recent market conditions, we\u2019ve had to work on reduced time for a short period,” Padiachy stated.<\/p>\n

\u2018Wake-up Call\u2019<\/h2>\n
\"R165<\/a>
Business Leadership South Africa Chief Executive, Busisiwe Mavuso<\/figcaption><\/figure>\n

<pBusi Mavuso, Chief Executive of Business Leadership South Africa, a prominent business advocacy organization, points some of the responsibility for the surge in Chinese goods toward the government.<\/p>\n

“You don\u2019t see the appetite from government to actually protect local industry, and yet they continue to talk about industrialization and beneficiation,” she remarked in an interview.<\/p>\n

“The real fact of the matter is that we don\u2019t have a clear trade policy as a country. We continue to put politics before economics, and that becomes concerning.”<\/p>\n

The Department of Trade acknowledges the seriousness of the situation.<\/p>\n

The disruptions in global trade represent “a serious wake-up call,” noted Maoto Molefane, acting deputy director-general at the department.<\/p>\n

“For the longest time, we\u2019ve been dependent on a particular region, but going forward, South Africa is looking at other areas.”<\/p>\n

The government encourages companies to diversify their markets while promoting a “butterfly strategy” intended to strengthen trade ties across various regions.<\/p>\n

South Africa\u2019s industrial decline presents a paradox; the nation has not lost its capacity to manufacture.<\/p>\n

Factory capacity utilization was approximately 76% in 2026, down from 83.2% in 2003, comparable to levels seen in many developed economies.<\/p>\n

However, a lack of sufficient demand for competitively priced goods has made justifying investment in further capacity challenging.<\/p>\n

With many South Africans struggling due to high living costs, unemployment, and stagnant economic growth, the lower prices of imported goods can overshadow calls to support local industry.<\/p>\n

“Capability and capacity is not an issue,” stated Sello Takatso, senior manager of manufacturing at Nedbank, a bank that lends to companies in this sector. <\/p>\n

“With the mounting challenges of imports that are taking place, we are competing on price point.”<\/p>\n<\/div>\n