Recent economic data highlight both South Africa’s difficulty and its opportunity.
Although the S&P Global South Africa PMI for the broader private sector edged up from 50.3 in July to 50.5 in August, manufacturing remained under significant pressure.
The Absa Manufacturing PMI fell to 45.8, its fourth consecutive monthly decline and its lowest level of 2026. China’s manufacturing PMI, by contrast, rose to 51.5 as production, new orders and exports strengthened.
The comparison should not be reduced to a competition between two economies of vastly different scale. It does, however, raise an important question for South Africa: how can we connect Chinese manufacturing strength and interest in African markets with our own urgent need for investment, industrial capacity and employment?
There is strong interest among Chinese businesses in investing in Africa.
Politically stable markets are particularly attractive, while mining, renewable energy, automotive manufacturing and large engineering, procurement and construction projects are drawing considerable attention.
We are also seeing a gradual change in the form this interest takes. Chinese companies are not only looking to sell products into African markets.
Increasing localisation requirements and the commercial advantages of having an established regional presence are encouraging more businesses to consider local partnerships, operating bases and manufacturing opportunities.
South Africa should be well positioned to benefit. It has a developed financial system, an established manufacturing base, access to regional markets and significant experience in sectors that are important to Chinese investors.
However, potential alone does not secure investment.
The government needs to establish specific and credible programmes that make productive investment easier to implement. Incentives must be attainable in practice, not merely attractive on paper. Investors also need greater certainty about approval processes, infrastructure, labour arrangements and the requirements that will apply over the lifespan of an investment.
The objective should not simply be to attract more imported products or limited assembly operations. South Africa should negotiate for investments that develop local suppliers, transfer skills, build manufacturing capability and create sustainable employment.
This is also where the relationship between investment and transformation needs more thoughtful consideration.
South Africa’s empowerment framework remains essential, but it should produce broader and more sustainable participation while also being practical for businesses making long-term capital commitments. Supplier development, skills transfer, employee advancement and meaningful local partnerships should form part of the investment model from the outset.
Chinese investors also have responsibilities.
Africa cannot be approached as one homogeneous market. Every country has different economic priorities, regulatory systems, labour environments and development needs. A model that succeeds in one jurisdiction cannot automatically be transplanted into another.
Before entering a market, investors need to understand its company and investment structures, tax system, transfer-pricing requirements, foreign-exchange rules, labour environment and governance expectations. Local partnerships can be extremely valuable, but they require careful selection, appropriate due diligence and clarity about the responsibilities of each party.
Chinese investment into Africa can be a genuine win-win. It can give Chinese businesses access to growing markets, resources and regional opportunities, while helping African economies build productive capacity and employment.
For South Africa, however, this opportunity will not remain open indefinitely. Other African countries are competing actively for the same projects. Our challenge is to turn international interest into factories, suppliers, skills and jobs before those investments find more welcoming destinations.
Lauren Patlansky, Head: China/Africa Business at HLB CBS Group South Africa.
**The views expressed do not necessarily reflect the views of the National Media Group.