South Africa took a significant step toward deepening economic ties with China on Friday, when Trade, Industry and Competition Minister Parks Tau signed a Framework Agreement on Economic Partnership for Shared Prosperity during a visit to Beijing.

The agreement, described by the South African trade ministry as a foundation for securing duty-free access to the Chinese market for South African exports, is part of a broader push to diversify trade partners and offset the impact of steep U.S. tariffs imposed by President Donald Trump. It also comes amid a degenerating faceoff between Pretoria and Washington that has strained diplomatic and economic relations to their lowest point in decades.

The framework paves the way for an “Early Harvest Agreement” expected by the end of March 2026, which will grant China duty-free access for South African goods in priority sectors. The ministry highlighted opportunities for South African businesses in mining, agriculture, and value-added manufacturing to penetrate the Chinese market, while emphasizing safeguards to protect domestic industrial capacity.

“We will negotiate with a view to create the necessary safeguards built into the agreement so as to protect South Africa’s industrial capacity,” Tau said in a statement.

China has invited South Africa to an investment promotion event focused on its steel industry, with Tau expressing optimism: “We look forward to attracting even more Chinese investment into South Africa, and also introducing many South African products into the Chinese market.”

The agreement aligns with China’s June 2025 pledge to eliminate tariffs on imports from all 53 African states with which it maintains diplomatic relations—a policy announced in response to Trump’s global tariff announcements. The faceoff between South Africa and the United States was exacerbated by Trump’s imposition of a 30% tariff on South African exports in August 2025—the highest rate applied to any Sub-Saharan African country.

Trump cited unfair trade practices and national security concerns, but the tariffs are part of his broader “America First” reciprocal tariff strategy, which has hobbled duty-free benefits under the African Growth and Opportunity Act (AGOA). Thirteen of the 30 AGOA-eligible countries face 15% tariffs, while South Africa’s 30% duties supersede AGOA preferences, effectively rendering the program defunct for many South African goods.

U.S.-South Africa relations have plunged to their worst in decades, fueled by Trump’s baseless accusations that the South African government is pursuing anti-American foreign policies, expropriating land from white farmers without compensation, and failing to stop a purported “genocide” against the white minority. South Africa has vehemently denied these claims, with President Cyril Ramaphosa labeling them as unfounded and inflammatory.

The tensions led to South Africa’s exclusion from U.S.-hosted G20 events in 2025 and Trump’s barring of Pretoria from other international forums. In a partial reprieve, Trump signed a one-year extension of AGOA on February 3, 2026, renewing duty-free access for eligible African exports until December 31, 2026, with retroactive effect from September 30, 2025, when the program expired.

U.S. Trade Representative Jamieson Greer stated the extension accounts for existing tariffs, providing short-term relief but leaving long-term uncertainty. Analysts describe it as a “fragile” stopgap measure, with South Africa’s inclusion remaining tenuous amid ongoing diplomatic frictions. Oxford Economics’ Brendon Verster noted: “Trump’s Liberation Day tariffs effectively negate AGOA.”

South Africa has been actively negotiating a better trade deal with the U.S. under the proposed Agreement on Reciprocal Tariffs (ART) to reduce the 30% rate, which affects key exports like cars, precious metals, and agricultural products. The tariffs have already impacted thousands of jobs and forced exporters to absorb higher duties.

In 2024, $8.23 billion in goods were exported under AGOA, with half from South Africa—mainly autos, metals, and farm produce—and one-fifth from Nigeria (primarily oil). The China agreement offers a counterweight, potentially mitigating these losses by opening new markets. China is already South Africa’s largest trading partner, with bilateral trade exceeding $50 billion annually, dominated by South African raw material exports (iron ore, platinum group metals, coal) and Chinese machinery, electronics, and consumer goods imports.

Deepening ties could boost South African opportunities in value-added sectors, though critics warn of increased dependency on Beijing. The development marks the latest step in Africa’s shift toward China amid U.S. trade pressures. Kenya announced a preliminary trade deal with China in January 2026, focusing on agricultural exports.

These bilateral pacts build on the Forum on China-Africa Cooperation (FOCAC), where China has committed to tariff-free access for least-developed African countries and expanded investment in infrastructure, manufacturing, and green energy.

Analysts view the framework as pragmatic diversification. The South African Chamber of Commerce and Industry welcomed it as a “strategic move,” while the Steel and Engineering Industries Federation called for robust safeguards against subsidized imports. The autos sector, contributing to about 30 million jobs (over 10% of urban employment), remains a critical pillar, and further U.S. tariff escalation could prompt Beijing to reinstate subsidies if the slowdown worsens.

China’s electric vehicle sector, long a global growth engine, showed clear signs of strain in January 2026, with leading player BYD reporting its lowest monthly domestic sales in nearly two years amid weakening consumer demand, policy shifts, and intensifying price competition.

The slowdown reflects broader challenges in the world’s largest auto market, where overcapacity, subsidy reductions, and economic headwinds are testing the industry’s resilience.

BYD sold 83,249 battery electric passenger vehicles in January 2026, part of a total 205,518 new energy vehicles (including plug-in hybrids)—the lowest monthly domestic figure since February 2024’s 121,748 units. Exports also declined to 100,482 vehicles from 133,172 in December. The company, which overtook Tesla as the world’s top battery-electric vehicle seller in 2025 with 2.26 million units (up 28% year-on-year), has yet to disclose a full-year domestic sales target for 2026. It projects overseas sales growth of nearly 25% to 1.3 million units, signaling a strategic pivot toward international markets.

At least six major Chinese EV brands reported sharp month-on-month delivery declines in January, according to CNBC analysis. Xiaomi delivered over 39,000 vehicles, down from more than 50,000 in December, though up year-on-year. Xpeng fell to 20,011, after averaging over 35,000 monthly in 2025. Li Auto dropped to 27,668, and Nio reported 27,182. Aito (Huawei-backed) delivered over 40,000 units (up 80% year-on-year), while Leapmotor rose to 32,059. Geely, including Galaxy and Zeekr brands, sold more than 270,000 vehicles overall (including exports), with new energy vehicle sales targeted at 2.22 million for 2026 (up 32%).

The broader market echoed the weakness. China Passenger Car Association data showed new energy vehicle sales (battery and hybrid) grew just 2.6% year-on-year in December 2025—the third consecutive month of slowing growth. This contrasts with the sector’s explosive trajectory: by mid-2024, over half of new passenger cars sold in China were new energy vehicles, and BYD’s 2025 dominance underscored China’s lead in EV production and exports.

Key pressures include:

• Policy Headwinds: On January 1, 2026, China reinstated a 5% purchase tax on new energy vehicles after more than a decade of full exemption from the 10% vehicle purchase tax. This change has prompted some consumers to delay purchases, with analysts expecting further moderation in early 2026 demand. Helen Liu, partner at Bain & Company, noted: “We see increasing pressure on China’s auto market in 2026, driven by a combination of policy and competitive factors.” Policy uncertainty and subsidy phase-outs have also made automakers more cautious about new model launches.
• Intense Price Competition: A prolonged price war among domestic players has squeezed margins while pushing feature-rich vehicles at lower prices. Geely’s Galaxy EV and other low-end models have eroded BYD’s dominance in its traditional price segments. Tu Le, founder of Sino Auto Insights, observed: “BYD has had a stellar run at the top and it’s impressive how long they’ve been able to hold off their domestic competitors… Companies like Geely with its Xingyuan have really taken sales on the low end, where BYD’s bread is buttered.”
• Economic Context: China’s economy continues to face headwinds from a prolonged real estate slump (once contributing ~25% of GDP), weak consumer confidence, and slowing growth. The auto sector, supporting over 30 million jobs (more than 10% of urban employment), remains a critical pillar. Fitch Ratings economist Alex Muscatelli noted that while autos represent only 3.7% of fixed asset investment (versus real estate’s 23%), further deterioration could prompt Beijing to reinstate subsidies. Industry observers, including Cameron Johnson of Tidalwave Solutions, expect potential policy support after Q1 data clarifies the slowdown’s depth.
• Overcapacity and Exports: Massive investment has led to oversupply, depressing prices and prompting consolidation. Many producers have expanded overseas to offset domestic weakness, though global tariffs and trade tensions limit opportunities.

Despite the challenges, there are still some bright spots. Aito, Leapmotor, and Nio posted year-on-year delivery gains, while Xiaomi’s SU7 sedan remains popular ahead of an April upgrade. BYD continues to invest in charging infrastructure, energy storage, and intelligent driving, positioning itself for long-term leadership.

Tu Le expects BYD to retain dominance both domestically and internationally. China’s top leaders will release 2026 policy targets at the annual parliamentary meeting in March. With Q1 data still volatile due to the Lunar New Year holiday (which shifts annually), the full extent of the slowdown will become clearer later in the year.

UAC of Nigeria Plc has listed its N54.03 billion Series 1, seven-year, 17.35% fixed-rate bond on the FMDQ Securities Exchange, marking a significant step in the conglomerate’s push to secure long-term funding from Nigeria’s domestic debt capital market at a time of tight liquidity and elevated interest rates.

The decision is believed to carry wider implications beyond the immediate funding raise, offering a window into how large Nigerian corporates are recalibrating strategy in a high-rate, low-liquidity environment.

At a macro level, the timing of the issuance is notable. Nigeria’s monetary conditions remain tight, with benchmark interest rates elevated and credit conditions restrictive. In such an environment, many corporates have either delayed capital market activity or relied heavily on short-term bank facilities.

UAC’s ability to attract institutional investors into a seven-year instrument suggests that appetite still exists for long-dated corporate paper where issuers have a credible operating history, diversified revenue streams, and a clear capital allocation plan. For pension funds and insurance firms in particular, the bond offers duration, yield certainty, and exposure to a consumer-facing conglomerate at a time when sovereign yields dominate portfolios.

The bond also reflects a deliberate shift in UAC’s funding mix. Historically, Nigerian conglomerates have leaned on shorter-tenor bank loans, exposing them to refinancing risk and interest rate volatility. By locking in fixed-rate funding for seven years, UAC is insulating part of its balance sheet from future rate swings while matching liabilities more closely with the long gestation periods typical of manufacturing, FMCG expansion, and real estate development. This alignment becomes especially important as the group absorbs C.H.I. Limited, where investments in capacity expansion, distribution, and brand building tend to yield returns over multiple years rather than quarters.

From an operational standpoint, the proceeds give UAC flexibility at a critical integration phase. C.H.I. operates in highly competitive FMCG categories such as dairy, juice, and snacks, where scale, efficiency, and working capital discipline matter. Refinancing existing obligations and strengthening working capital could help stabilize cash flows, improve supplier terms, and support distribution reach, particularly as consumer demand remains under pressure from inflation and weak purchasing power. The bond, therefore, functions not just as balance sheet support, but as a buffer that allows management to focus on execution rather than near-term liquidity stress.

There is also a signaling effect on the market. By successfully issuing under its N150 billion debt programme, UAC is effectively testing and validating investor confidence in its post-acquisition story. The company has spent recent years reshaping its portfolio, exiting some legacy businesses while doubling down on food, beverages, and consumer services. The consolidation of UAC Food and Beverage Company Limited into C.H.I. Limited reinforces that shift, moving the group decisively from acquisition mode into integration and operational optimization. Investors buying into the bond are implicitly endorsing that transition.

For the broader Nigerian capital market, the transaction reinforces FMDQ’s role as a platform for corporate capital formation at a time when equity markets have struggled with volatility and muted foreign participation. Each successful corporate bond listing helps deepen the domestic yield curve, improve price discovery, and gradually reduce the economy’s dependence on bank-dominated financing. FMDQ’s framing of the deal around industrial growth and job creation is not incidental, as access to longer-term capital remains one of the key constraints facing manufacturers and consumer goods producers.

Looking ahead, the bond could also shape UAC’s future funding strategy. A smooth post-listing performance and stable secondary market trading would strengthen the company’s case for subsequent tranches under the N150 billion programme, potentially at improved pricing if macro conditions ease. Conversely, execution risks around FMCG integration, cost pressures, or consumer demand could test investor patience, making operational delivery over the next two to three years critical.

In sum, the N54.03 billion bond is more than a routine listing. Analysts see it as a strategic bet by UAC on long-term capital, disciplined integration, and the resilience of Nigeria’s consumer economy, while offering investors exposure to a restructured conglomerate seeking to convert balance sheet strength into sustainable growth.