In search of a demandeur – Exploring the contours of a SACU-China trade deal

This briefing records a discussion by the South African Institute of International Affairs (SAIIA) on the potential for a trade agreement between the Southern African Customs Union (SACU) and China. It examines China's economic rise, the complementary nature of the two economies, and the political tensions within SACU regarding job losses in light industry versus the welfare gains of cheaper imports.

• China has experienced rapid economic growth and global integration, with GDP growing 9.7% annually between 1983 and 2003 and export growth reaching 15.2% annually from 1995 to 2004.
• The trade relationship between SACU and China is characterized by complementarity: South African exports to China are growing at approximately 40% annually, primarily in resource-based products like metals and chemicals, while China's strongest exports to SACU are in electrical machinery, footwear, and textiles and apparel.
• A comprehensive Free Trade Agreement (FTA) faces significant political opposition in SACU countries because trade with China is perceived as harmful to job creation and poverty reduction, particularly in labor-intensive light industries like clothing and footwear.
• Due to political sensitivities and the cautious approach South Africa has taken with other partners like Mercosur and India, SACU is likely to pursue a narrow preferential trade agreement with China rather than a comprehensive FTA.
• China has demonstrated flexibility in its trade deals with other nations, such as Chile, where it allowed long phase-in periods and specific carve-outs for light industries, including some textile and clothing products.
• There is a strategic debate within SACU regarding whether to protect sensitive sectors or to use engagement with China to accelerate economic adjustment toward core competencies and a more flexible economy.

APA

South African Institute of International Affairs (2006). In search of a demandeur – Exploring the contours of a SACU-China trade deal. https://saiia.org.za/wp-content/uploads/2006/03/In-search-demandeur-Exploring-SACU-China-trade-deal.pdf

Chicago

South African Institute of International Affairs. In search of a demandeur – Exploring the contours of a SACU-China trade deal. 2006. https://saiia.org.za/wp-content/uploads/2006/03/In-search-demandeur-Exploring-SACU-China-trade-deal.pdf.

Wikipedia

{{cite report |author=South African Institute of International Affairs |title=In search of a demandeur – Exploring the contours of a SACU-China trade deal |date=30 March 2006 |url=https://saiia.org.za/wp-content/uploads/2006/03/In-search-demandeur-Exploring-SACU-China-trade-deal.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{southafricaninstituteofinternationalaffairs2006search, author = {{South African Institute of International Affairs}}, title = {{In search of a demandeur – Exploring the contours of a SACU-China trade deal}}, institution = {South African Institute of International Affairs}, year = {2006}, month = mar, url = {https://saiia.org.za/wp-content/uploads/2006/03/In-search-demandeur-Exploring-SACU-China-trade-deal.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }