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In its Africa Macro report released on Thursday Standard Bank noted that China has been purchasing an average of US$1.1 billion per month of physical rand (notes and coins) since November 2010.

"China imported US$3.4 billion worth of ZAR in 2010 and another US$10.9 billion in the first three quarters of 2011," said Standard Bank.

Interestingly, the emerging super power has also been buying around US$1 billion worth of Swiss Francs every month.

According to the report, SA's exports of goods to China have grown faster than imports and will reach a record US$15 billion this year, making the country's growth in exports faster than any of China's plus-$1 billion partners in Africa.

South African exports to China have increased by 44% year on year (Y/Y) in the first three quarters of the year, increasing from US$8.2 billion to US$12 billion.

That means SA currently accounts for nearly one fifth of all African exports to China.

Trade between Africa and China is set to grow by US$30 billion to US$155 billion this year, which puts Africa's trade with the emerging super power on a par with that of Latin America.

In a newly released report Standard Bank noted that SA was serving as the primary engine for growth in trade between the two continents.

However, SA's export basket is heavily skewed towards commodities.

"Despite stated intentions to alter the status quo and rebalance trade, SA's exports to China remain dominated by mineral products," the report noted.

Mineral products have increased rapidly - by about 68% y/y - to US$5 billion with China accounting for nearly 60% of SA's exports of iron ore.

While exports of other ores - including US$780 million worth of chrome; US$393 million worth of manganese and lead worth some US$115 million - are material, exports of coal have surged to US$602 million.

In the meantime, SA is set to import nearly twice as much from China in 2011 as it did in 2009, which ensures it remains China's largest market in Africa.

Standard Bank estimates that SA will import US$13.5 billion worth of goods from China this year. In the first three quarters of the year imports had increased from US$8.8 billion in 2010, to over US$11 billion.

It said SA was on track to import about US$2 billion of clothing, US$2 billion of nuclear reactors & machinery, and US$2 billion of electrical equipment & appliances from China in 2011.

However, for all the good bilateral trade might be doing the country - particularly since its inclusion in BRICS, the report warns that SA should not lose sight of Africa as one of its largest markets.

"SA must not forfeit the only market where it enjoys a comparative advantage for its goods. Relative to China, SA's economic deficit is clear. Seemingly as a result, SA met its invitations to the BRIC summit in Sanya by stressing its ability to act as a gateway into Africa for BRIC trade and investment. Not only is the claim questionable, but it would be foolish: SA has exported ten times more machinery, electrical goods and vehicles into Africa than into the BRICS so far this year," the report reads.

Chinese companies continue to allocate resources (both capital and people) to grow their presence in SA.

At the start of the year, just seven countries in the world had greater official Chinese FDI stocks than SA and, considering the large commodity-related investments this year, FDI surged once again, the bank noted.

"SA and China have, rightly, prioritised bilateral ties, but commercial tentacles reach far deeper. However, looking ahead, the quality and substance of bilateral interaction will become more important, defining success."