South African exporters eye China’s $3.5 trillion market as tariffs fall away

South African businesses could see a major export boost from May as African exports to China become duty-free.

The policy, announced by Chinese President Xi Jinping, opens access to what has been described as a $3.5 trillion consumer market.

This comes as global trade faces uncertainty and rising tariffs elsewhere.

Opportunity for growth amid a weak economy

HLB CBS Group CEO Henico Schalekamp said South Africa stands to benefit, especially given its slow economic growth.

“It’s without a doubt… there’s a great opportunity for them to enter this market without any duties.”

He said businesses already trading with China could expand further, while new exporters may also enter the market.

“With the low growth rates we currently have in the country, there’s an opportunity for them to increase their revenues and profits.”

Key sectors: manufacturing and specialised exports

Schalekamp said the biggest gains are likely in sectors where South Africa is competitive.

“It can be anything where we could be competitive… more manufacturing or engineering or any specialised products that we manufacture.”

He added that success will depend on how businesses position themselves and build relationships in China.

“It depends on how clever the businesses operate… and relationships into the right sectors in China.”

Investment potential from China

The shift could also drive more Chinese investment into South Africa.

Schalekamp said Chinese firms may look to establish local operations and boost manufacturing capacity.

“They could… bring some skills regarding efficient manufacturing processes.”

He said partnerships between South African and Chinese businesses could strengthen the local industry.

“I think they could be a huge, huge benefit for our manufacturing industry.”

Global tensions create an opening

The move comes as US tariffs reshape global trade flows.

Schalekamp said this has pushed countries to seek alternative markets and partnerships.

“He [Trump] basically just forced all the other countries to look at other opportunities.”

He added that China may also be redirecting investment away from the US.

“I think it’s also becoming more difficult for them… with the US, so I think that led to this decision.”

Infrastructure challenges remain

Despite the opportunity, concerns remain about South Africa’s readiness to attract investment.

Issues around Eskom and Transnet could limit the benefits if not addressed.

“There’s… very important infrastructure that needs to be in place.”

Schalekamp said without improvements, the country may struggle to capitalise.

“The devil’s in the detail… otherwise there’s not going to be a lot of benefit for the country.”

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For more information, listen to Schalekamp on 702’s Breakfast with Bongani Bingwa using the audio player below: