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# Chinese manufacturers facing US trade barriers are selling more to South Africa, and local factories keep shrinking
- URL: https://www.businessbagel.com/china-imports-south-africa-factories-shrinking/
- Published: 2026-10-20T02:30:00.000Z
- Updated: 2026-10-20T02:29:59.000Z
- Description: China has overtaken the euro area as South Africa's top partner in manufactured goods, mostly by selling to it, while local factories go backwards.
- Author: Christian Maidman
- Tags: Economy, Business Bagel News

China has become South Africa's biggest trading partner in factory goods, by the Reserve Bank's reckoning, after climbing from sixth place in 2003\. The ranking comes from the bank's latest update of the rand's trade weights, which measure how much each partner counts in trade in manufactured goods, not in all trade. China's weight has grown roughly ninefold since 1999, to 28.6%, which puts it just ahead of the euro area. Europe is still the main destination for South Africa's exports.

## More than a third of imports, under 6% of exports

The top spot comes with a very lopsided relationship. China supplied more than a third of the manufactured goods South Africa imported in the bank's 2026 revision, but took only about 5.9% of the manufactured goods it exported. Shipments from China jumped 29% in the first eight months of this year, as Chinese manufacturers facing higher barriers in the US hunt for customers elsewhere. Measured against the same eight months six years ago, the rise is almost $10 billion, and among Africa's big economies only Nigeria saw a bigger one.

On the other side of that trade, local factories are going backwards. Manufacturing shrank for a third quarter in a row in the three months to June, one of the sectors that pulled the whole economy into a 0.2% contraction. It shed 15,000 jobs in that quarter and 100,000 over the year. Factories are running at about 76% of capacity, down from 83.2% in 2003.

## Why local makers lose on price

Moody's has put a number on the exposure. Its manufacturing vulnerability index ranks South Africa the most exposed to Chinese competition of the eight African economies it assessed, scoring high on all three of its measures, the worst result of the group. The ratings agency points to a large factory base that has steadily lost ground to Chinese exporters in machinery and car components over the past decade.

The lenders see the same thing. "Capability and capacity is not an issue," Sello Takatso, Nedbank's senior manager for manufacturing, told Bloomberg. "With the mounting challenges of imports that are taking place, we are competing on price point." Electricity has not helped that price: by Codera Analytics' count, Eskom's tariffs have risen 973% since 2008, about four times as fast as consumer prices.

The responses so far pull in two directions. The International Trade Administration Commission, which administers the trade laws meant to protect local industry, says it is investigating five new applications for relief from a flood of imports, from ArcelorMittal South Africa and the makers of steel nuts and bolts among others. Government, for its part, wants companies to sell into more markets, under what it calls a butterfly strategy for trade links across different regions.