Neelam Rahim | neelam@radioislam.co.za
3-minute read | 10 October 2025 | 14:45 CAT

📸 Foton’s locally built vehicle marks a shift in South Africa’s manufacturing and strengthens trade ties with China.

Gold prices have doubled over the past two years, surging past $4,000 an ounce, with South African Kruger coins trading around 68,000 rand. Silver, platinum, and other precious metals have also seen an upward trajectory, reflecting global economic shifts and investor demand for safe-haven assets amid ongoing geopolitical tensions.

Muhammed Cajee, Director of ASRI, told Radio Islam International that the surge in gold prices is closely tied to global uncertainties. “The Trump presidency, particularly his trade war with China, has created economic unpredictability between two superpowers,” Cajee said, noting that ongoing conflicts, including the two-year Gaza war, have prompted investors to flock to gold. Interest rate speculations in the U.S. and a weakening dollar have further incentivised investments in precious metals, while central banks, including China’s, continue to expand their gold reserves.

Domestically, South Africa’s inflation targeting remains a key policy debate. While the National Treasury supports a 3–6% range, SARB Governor Kenyatta advocates for a 3% target. Cajee explained that anchoring inflation expectations provides predictability for wages, pricing, and long-term planning, shielding the working class from rapid price increases. He emphasised that the choice between a narrow target and a broader range is fundamentally technocratic but also influenced by political considerations ahead of municipal elections.

In the manufacturing sector, Chinese car manufacturer Foton Motor has rolled out its first locally built vehicle, signalling a shift in South Africa’s automotive industry. Cajee noted that while traditional European and American manufacturers face declining competitiveness, Chinese companies are expanding aggressively in South Africa. This development aligns with the Department of Trade and Industry’s push for localisation and industrial growth, offering benefits for job creation, skills development, and broader economic ties with China.

“The local production of vehicles by Fortan reverses previous declines in completely knocked down vehicle manufacturing and strengthens South Africa’s industrial base,” Cajee said. He highlighted that South Africa is increasingly positioning itself as a gateway for Chinese companies into sub-Saharan African markets, a region projected to approach one billion people. This strategic positioning could attract further investment, stimulate local industries, and help address South Africa’s persistent unemployment challenges over the next decade.

The ASRI Report underscores that South Africa’s economic trajectory is shaped not only by global uncertainties and geopolitical developments but also by emerging trade partnerships, domestic policy debates, and industrial innovation. The combination of gold market trends, inflation management, and the evolving automotive sector reflects both challenges and opportunities for the country’s future growth.

Cajee concluded, “Strengthening trade ties with China and encouraging local manufacturing has broader strategic implications for job creation and economic stability in South Africa.”

Listen to the full ASRI Report on Sabahul Muslim with Moulana Junaid Kharsany and Muhammed Cajee.