CHINA AND SOUTH AFRICA what’s the brief story.pptVIP

CHINA AND SOUTH AFRICA: what’s the brief story? Mike Morris School of Economics, University of Cape Town and School of Development Studies, University of KwaZulu-Natal Situating SA Chinese imports/exports Chinese African Trade 2005 OIL dominates imports from Africa 69.3% Also other raw materials - iron, cotton, diamonds, logs All iron ore diamonds from SA Exports – mainly light manufacturing Clothing Textiles, footwear, bicycles, etc What this doesn’t tell us Specificity of South Africa Indirect impacts of China on SA In third country sector markets (need sector based research for this) Exchange rates from Chinese activity What Makes SA Different? Substantial Domestic Market Size, Income Level and Sophistication Concentration of Retail Buyers Substantial Domestic Manufacturing Diversified Struggling to adopt WCM Substantial Mineral/Resource Base No Oil IMPACT on SA? Don’t know enough but ….. FDI? Clothing -Taiwanese Steel - Mittal Construction squeezed out of part of SSA Trade on Manufacturing? Substantial formal sector job losses in CT (85,000), Furniture, Footwear decimated CT systemic value chain competitiveness response to upgrade local manufacturing Aid? – Indirect impact through SSA Indirect impacts: 3rd country markets and exchange rates Two sector stories show this: Autos – 2002 work on competitiveness but at R15 = ￡. Now because of Dutch disease R10.88 = ￡ how survive??? CT – Recent work for DFID – AGOA boost for exports but China 2 fold impact. Exports and Dutch disease affect Rand currency zone…. * * * *