Trade, Industry and Competition Minister Ebrahim Patel and a high-level delegation recently completed a four-day working visit to Shanghai, Nanjing and Beijing, in China, during which they met with government officials, investors and a number of Chinese electric vehicle (EV) and battery manufacturers.

China is the world’s leading producer of EVs and batteries and is currently South Africa’s largest trading partner, with bilateral trade estimated at $34-billion in 2022.

The Minister was accompanied by senior staff of the Industrial Development Corporation and the Department of Trade, Industry and Competition (dtic).

The visit provided Patel with an opportunity to present the South African automotive value proposition and government policy support to companies looking to invest into the South African automotive industry, particularly in EV manufacturing.

Patel was hosted by Chinese Minister of Commerce Wang Wentao, in a bilateral meeting and working dinner during the visit.

The discussion reviewed trade relations, considered steps taken to implement agreements signed during President Xi Jinping’s August 2023 State visit to South Africa, identified new opportunities to strengthen economic ties and discussed a possible memorandum of understanding on the automotive industry.

During his visit, Patel held bilateral meetings with eight Chinese companies, met with executives of six South African companies operating in China and undertook two factory site visits. 

Meanwhile, the South African delegation met with six potential Chinese investors in the EV value chain, four of which are vehicle manufacturers, namely the Shanghai Automotive Industrial Corporation, BYD Auto Manufacturers, Foton Group and Beijing Automotive Industrial Group.

Meetings were also held with two battery producers. These were CATL – the world’s largest battery producer – and Gotion Hi-Tech International, which has a partnership with Volkswagen.

“The investors we met were very interested in the market, particularly with commencement of trade by South Africa under the African Continental Free Trade Agreement. I found them knowledgeable about local market conditions and keen to explore investment partnerships. This builds on positive sentiment we found in September last year in New York among American investors too,” Patel notes in a statement issued by the dtic on March 8.

The South African automotive industry is supported by policies such as the South African Automotive Master Plan 2035 and a government support package for capital investment and vehicle and component production.

Moreover, the South African government released the EV White Paper, which outlines the country’s approach to supporting the transition to zero-emission vehicle production for the export and domestic market, in December 2023.

As part of the support for the transition, the government has improved the automotive industry incentive package for EV production in South Africa. This includes increased investment support through a recently announced tax measure.

The support from government ensures South Africa can compete in attracting vital investment into the industry that will facilitate the transition of this well-established sector to new energy vehicles, whereby access to export markets makes South Africa a more attractive investment destination.

Patel also met with investors in the steel and energy sectors and discussed their plans for the South African market.