The trade gap between South Africa and China is narrowing. This was said by the Minister of Trade and Industry, Dr Rob Davies at the World Economic Forum on Africa in Cape Town, today.
"Currently South Africa’s exports to China are largely raw materials, mainly iron ore, while the bulk of imports are value-added products. This pattern is set to change as measures have been put in place to address the current trade imbalance through the comprehensive strategic partnership where there has been agreement that China will make a concerted effort to buy more value-added goods from South Africa," said Davies.
Minister Davies stated that Africa could learn from the Chinese on how to industrialise the continent.
"It is of fundamental importance that South Africa and Africa develop their manufacturing capacity because China’s industrialisation was fuelled by its deliberate intervention to support its manufacturing industries. Africa needs to defend the space to develop its industrial capacity in general and specifically within the World Trade Organisation (WTO) context," said Davies.
Minister Davies added that it was a reasonable expectation to use revenues from the minerals to develop infrastructure. However, consideration must be given to the purpose of the infrastructure and location thereof. According to Davies, the infrastructure development that focuses on creating conditions in Africa that promote intra-Africa trade and creating an internal market is consistent with the long term economic development goals for South Africa and Africa on the whole.
Chinese Special Representative for African Affairs in the Ministry of Foreign Affairs, Liu Guijin, dismissed allegations that his country was benefiting alone in its trade with Africa. Guijin said China imports 10 percent of oil from Africa every year.
Guijin also said Africa needs to expand its trade structure.
"Africa needs to diversify its trade structure; an analysis of Africa’s challenges with regard to its trade structure is not unique to the Chinese. Africa’s exports to the US and Europe is also largely based on raw materials. And Africa should use the revenues from the commodities to diversify their export baskets and improve their productive capacities and their infrastructure," said Guijin.
Enquiries:
Sidwell Medupe
Tel: 012 394 1650
Cell: 079 492 1774
E-mail: MSMedupe@thedti.gov.za
