Exports of metal to China fall short

By Ethel Hazelhurst Time of article published Mar 1, 2011

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A breakdown of foreign trade last year shows China was South Africa’s biggest trading partner with total trade between the countries worth R143.3 billion.

The second biggest global economy, China bought R59.3bn worth of South Africa’s goods, of which more than R52bn were in the sectors that include base metals, coal and iron ore.

The data are from the SA Revenue Service.

South Africa’s imports from China were valued at R84bn, of which R37bn went on machinery and appliances. This left South Africa with a R23.7bn trade deficit, bigger than the previous year’s gap of R23.1bn.

The deficit has proved politically controversial, as has China’s focus on resources. A year ago a Chinese official signed a trade agreement saying China would attempt to increase its imports of “beneficiated, high-value products from South Africa”.

There are hopes that South Africa’s entry to the exclusive Bric club of Brazil, Russia, India and China at its heads of state meeting in Beijing next month could boost trade with these major emerging markets.

But there are challenges. Trudi Hartzenberg, the executive director of the Trade Law Centre of Southern Africa, said the Bric countries had similar priorities in terms of industrial development and were competing for space in the same global markets. Examples are the clothing and automotive industries.

She said there might be opportunities for South Africa in some niche markets in the clothing sector; and possible demand for processed agricultural goods, like canned fruit and fruit juice in China. But it seemed likely demand for South Africa’s products would remain concentrated on resources.

Demand from India was mainly mineral products worth R14.8bn out of total exports worth R21.7bn. South Africa imported R6.2bn of the same category of goods out of a total of R20.8bn. Total trade between the countries amounted to R42.5bn.

Trade with Brazil was worth only R15.1bn and with Russia R2.9bn.

After China, the traditional partners – Germany, the US, Japan and the UK – led in South Africa’s trade stakes. Motor vehicles and automotive equipment figured in exports, while imports were dominated by machinery and equipment.

Trade with Germany, South Africa’s second-largest trading partner, is relatively diversified. Of total exports to that country worth R42.7bn, the biggest category – R9.8bn – includes vehicles and transport equipment.

The National Association of Automobile Manufacturers of SA (Naamsa) expects export numbers to rise this year.

In January exports of vehicles rose 11.5 percent year on year and Naamsa said exports “were expected to improve substantially from February onwards in light of a revival in demand in foreign markets”.

Imports from Germany were worth R66.1bn, leaving South Africa R23.4bn in deficit. Once again, the biggest import was R16.7bn in machinery and equipment.

Trade between the US and South Africa amounted to R93.5bn: R51.7bn in exports, and R41.8bn in imports – leaving South Africa R9.9bn in surplus. The main export item was R15bn worth of precious metals and stones followed by R14.3bn in motor vehicles and transport equipment. Top of the import bill was machinery and equipment valued at R14bn.

The biggest trading surplus came from Japan – R15.9bn (exports: R46.9bn; imports R31bn). The major export was R24.2bn in precious metals and stones; the top import was R8.8bn in motor vehicles and transport equipment.

In the case of the UK, R13.5bn of precious metals and stones was the biggest export and machinery and equipment was the top import at R5.5bn. - Business Report

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