January 1, 2013 will mark the 15th anniversary of the establishment of formal diplomatic relations between South Africa and China. Over this period, all of China's top leadership has visited South Africa – something unprecedented in terms of frequency and seniority when compared to Beijing's relations with any other state. China views South Africa as its foremost strategic partner in Africa as well as a major player in multilateral global politics. The rapidly growing interest of Chinese presence and interests in Africa can only exist with the tacit acceptance with the existing regional hegemon, the South African Government. Both Pretoria and Beijing describe their relationship as a "comprehensive strategic partnership" – grand sounding, but what are the key forces that shape the bilateral relationship?

Since 1994, South Africa's foreign policy toward Asia has flirted with Malaysia, India and Japan, but since the establishment of diplomatic ties with the People's Republic in 1998, it has been largely Sino-centric. There is, however, friction between political interests and commercial ones. Geopolitically, South Africa and China are the leading representatives of the emerging "South" – best represented by their memberships in the G20 and the BRICS. South Africa's inclusion was driven by geopolitical interests – Pretoria wanting to punch above its weight and be regarded as a leading emerging market economy.

But beyond the new orientation of our foreign policy, we need to consider the commercial imperatives of our relationships. When one cuts through the political rhetoric, it is ironic that South Africa's new strategic political partners in the developing world are now also its greatest commercial competitors. This is especially the case with China (manufacturing) and India (services). The pace of China's industrial rise and integration into the global economy continues to force other economies to adapt. Its rapidity is exposing competitive weaknesses in industrial sectors in South Africa's economy at a speed that has taken both government and business by surprise. One could argue that the government's recent Industrial Policy Action Plan (IPAP) is a strategic response to competition from China.

However, despite economic fallout through trade, South Africa does possess a comparative political advantage that can be used for commercial gain. There are very few South African firms that have understood and leveraged the geopolitics of South Africa's relationship with China. These "sector shapers" include Naspers' MIH Group which has succeeded where Google has failed in becoming the leading foreign player in China's most closed sector, media. SAB Miller is now the largest brewer by volume in China and has built its business on the back of a strong state-owned JV partnership in the country. Wesizwe Platinum received an investment of almost $1 billion from Chinese sovereign wealth and a leading state-owned enterprise, marking China's first ever equity investment into a platinum asset. For South African business, China's move into Africa poses a strategic consideration. Of China's 73 firms on the Fortune 500 list, 50 have a presence in Africa. As China Inc.'s interests deepen on the continent, they will increasingly intersect with those of "SA Inc." in a region which is South Africa's own commercial sphere of interest. The opportunities for new partnerships between South African and Chinese corporate interests in the African region are undoubtedly there. To better engage China's "state capitalist" approach, it is imperative that we reduce the disconnect between the state and the private sector in South Africa in order to enhance our ability to project a more coordinated and focused economic diplomacy in Africa – a region in which China is now the largest trader, provider of capital and commercial investor.

(The author is the CEO of Frontier Advisory and a Member of the World Economic Forum's Global Agenda Council on China. Email: mdavies@frontieradvisory)