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CHINA AND SOUTH AFRICA: what’s the brief story?

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%

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CHINA AND SOUTH AFRICA: what’s the brief story?

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  1. 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

  2. Situating SA Chinese imports/exports

  3. Chinese African Trade 2005 • OIL dominates imports fromAfrica 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

  4. 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

  5. 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

  6. 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 C&T (85,000), Furniture, Footwear decimated • C&T systemic value chain competitiveness response to upgrade local manufacturing • Aid? – Indirect impact through SSA

  7. 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??? • C&T – Recent work for DFID – AGOA boost for exports but China 2 fold impact. Exports and Dutch disease affect Rand currency zone….

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