China and South Africa have agreed to enhance balanced trade and foster investments between their industrial sectors, as highlighted in a joint statement following a meeting between Presidents Xi Jinping and Cyril Ramaphosa in Beijing. Ramaphosa sought to address South Africa’s trade deficit with China by advocating for sustainable manufacturing and job-creating investments. China, South Africa’s largest trading partner, acknowledged the importance of job creation and expressed a willingness to promote local employment, technology transfer, and rural revitalisation. The meeting resulted in several cooperation agreements, focusing on areas such as renewable energy and manufacturing. From a market perspective, this collaboration is vital as it aims to reduce South Africa’s trade imbalance, stimulate job creation, and strengthen its manufacturing capabilities, which are crucial for sustainable economic growth.
On the topic of economic growth, note that GDP data for Q2 will be published today. After economic expansion of only 0.5% y/y in Q1 marked a disappointing start to the year, suppressed GDP growth is expected to continue in Q2. Specifically, Bloomberg consensus estimates point to expectations for a reading of 0.3% y/y. The absence of load-shedding through Q2 did not seem to have a marked effect on the high-frequency production data released throughout the quarter. Looking ahead, the next (Q3 2024) GDP print could mark the beginning of a meaningful shift when improved household and business confidence, supported by more pragmatic policymaking, might lead to improved economic conditions. Therefore, while the Q2 data will certainly be interesting, it is somewhat outdated given that its coverage is before the formation of the Government of National Unity (GNU). Consequently, it likely holds only limited market-moving potential.