CHINA AND SOUTH AFRICA: whats the brief story

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CHINA AND SOUTH AFRICA whats the brief story?

• Mike Morris
• School of Economics, University of Cape Town and
• School of Development Studies, University of
  KwaZulu-Natal

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Situating SA Chinese imports/exports
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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

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What this doesnt 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

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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

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IMPACT on SA?

• Dont 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

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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.