{"id":879507,"date":"2026-10-18T11:00:00","date_gmt":"2026-10-18T09:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=879507"},"modified":"2026-10-16T15:55:56","modified_gmt":"2026-10-16T13:55:56","slug":"r165-billion-chinese-threat-to-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/879507\/r165-billion-chinese-threat-to-south-africa\/","title":{"rendered":"R165 billion Chinese threat to South Africa"},"content":{"rendered":"\n

South Africa\u2019s manufacturing sector has been in decline for more than three decades. <\/p>\n\n\n\n

Now, a deluge of cheap Chinese goods, intensified by US President Donald Trump\u2019s tariff war, is putting what remains of its industrial base under renewed pressure.<\/p>\n\n\n\n

Chinese exports to South Africa have more than doubled since the start of the decade, rising by almost R165 billion in the first eight months of this year compared with the same period six years ago. <\/p>\n\n\n\n

Among Africa\u2019s major economies, only Nigeria recorded a bigger increase.<\/p>\n\n\n\n

The pace has accelerated since Trump returned to the White House. Shipments from China to South Africa jumped 29% in the first eight months of 2026 from a year earlier, as Chinese manufacturers, confronting higher barriers in the US, hunt for customers elsewhere.\u00a0<\/p>\n\n\n\n

South Africa also runs a large trade deficit with China, which accounts for more than a third of the country\u2019s manufacturing imports and only about 5.9% of exports, according to central bank data. <\/p>\n\n\n\n

The industry contracted for a third consecutive quarter in the three months through June.<\/p>\n\n\n\n

Chinese manufacturers, aided by subsidies and a cheap currency, aren\u2019t just undercutting producers in South Africa. <\/p>\n\n\n\n

Rivals from Brazil to Vietnam are also struggling to compete and have imposed tariffs on Chinese steel products. The European Union reached a deal with Beijing last week to curb Chinese hybrid-car exports to the bloc.<\/p>\n\n\n\n

South Africa is particularly vulnerable as its manufacturers are already grappling with high energy costs, an inflexible labor market, burdensome regulation, failing infrastructure and weak economic growth.<\/p>\n\n\n\n

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

Moody\u2019s Ratings’ latest Manufacturing Vulnerability Index ranks Africa\u2019s largest economy the most exposed to Chinese trade competition of the eight nations it assessed on the continent.  <\/p>\n\n\n\n

It attributed this to South Africa\u2019s \u201crelatively large manufacturing sector with a high reliance on foreign, and specifically Chinese, value added in exports\u201d and moderate and declining competitiveness. <\/p>\n\n\n\n

The International Trade Administration Commission, which administers trade laws and implements measures to protect local industries, said it is investigating five new applications from companies seeking relief from an influx of imports.<\/p>\n\n\n\n

The applicants span sectors from producers of gypsum plasterboard, used for ceilings, to polyethene terephthalate, a lightweight plastic used in beverage containers, to cold-rolled steel.<\/p>\n\n\n\n

The entities involved include the South African Fasteners Manufacturers\u2019 Association, representing makers of steel nuts and bolts, Saint-Gobain Construction Products South Africa, ArcelorMittal, and Hosaf, a unit of KAP.<\/p>\n\n\n\n

\u201cOver the years, there has been a general increase in the case load relating to increased imports,\u201d ITAC said in an emailed response to questions. <\/p>\n\n\n\n

\u201cPart of that increase can be attributed to increased imports from East Asia, including China.\u201d <\/p>\n\n\n\n

At Alvern Cables in Germiston, east of Johannesburg, Works Director Jaycen Padiachy, 51, has seen the impact of the influx of Chinese goods firsthand.<\/p>\n\n\n\n

The company, which was founded in 1967 and produces low- and medium-voltage cables used in homes, factories and infrastructure, expected the rebound in economic activity after the global pandemic to help restore demand. <\/p>\n\n\n\n

Instead, Padiachy said, the recovery has faltered. \u201cWhat we are noticing now is a lot of competition in the market; imports are affecting our business.\u201d  <\/p>\n\n\n\n

To compete, the factory has had to adjust its business model. \u201cUnder recent market conditions, we\u2019ve had to work on reduced time for a short period,\u201d Padiachy said.<\/p>\n\n\n\n

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

Busi Mavuso, the head of Business Leadership South Africa, one of the country\u2019s largest business lobby groups, apportions some of the blame for the influx of Chinese goods to the authorities. <\/p>\n\n\n\n

\u201cYou don\u2019t see the appetite from government to actually protect local industry, and yet they continue to talk about industrialization and beneficiation,\u201d she said in an interview. <\/p>\n\n\n\n

\u201cThe 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.\u201d<\/p>\n\n\n\n

The trade department says it is taking the threat seriously.<\/p>\n\n\n\n

The upheaval in global trade is \u201ca serious wake-up call,\u201d Maoto Molefane, acting deputy director-general at the Department of Trade, said in an interview. <\/p>\n\n\n\n

\u201cFor the longest time, we\u2019ve been dependent on a particular region, but going forward, South Africa is looking at other areas.\u201d\u00a0<\/p>\n\n\n\n

The government wants companies to diversify their markets and is promoting a \u201cbutterfly strategy\u201d aimed at strengthening trade links across different regions.<\/p>\n\n\n\n

There is a paradox at the centre of South Africa\u2019s industrial decline. The country hasn\u2019t lost its ability to manufacture.<\/p>\n\n\n\n

Factory capacity utilisation stood at about 76% in 2026 from 83.2% in 2003, around levels seen in some major developed economies. <\/p>\n\n\n\n

What it lacks is enough demand for goods priced at a level that will ensure its factories remain competitive, making investing in additional capacity difficult to justify.<\/p>\n\n\n\n

South Africans are already under pressure from a high cost of living, unemployment and stagnant growth. When a cheaper imported alternative appears, price can outweigh arguments about supporting the local industry.<\/p>\n\n\n\n

\u201cCapability and capacity is not an issue,\u201d Sello Takatso, senior manager for manufacturing at Nedbank, which lends to companies in the sector, said. <\/p>\n\n\n\n

\u201cWith the mounting challenges of imports that are taking place, we are competing on price point.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

South Africa’s manufacturing industry is facing increasing strain from cheap imports from one country.<\/p>\n","protected":false},"author":59,"featured_media":799746,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"posted","_sma_x_autopost_error":"","_sma_x_post_id":"2111744354863763887","_sma_facebook_post_id":"191437357620492_2241019996718399","_sma_instagram_post_id":"18125231857900337","_sma_x_attempts":1,"footnotes":""},"categories":[9872],"tags":[17507,423,3387,1799],"class_list":["post-879507","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-busi-mavuso","tag-china","tag-manufacturing","tag-nedbank"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/879507","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=879507"}],"version-history":[{"count":6,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/879507\/revisions"}],"predecessor-version":[{"id":879518,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/879507\/revisions\/879518"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/799746"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=879507"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=879507"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=879507"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}