Nov 28, 2012
China imports threatens SA manufacturingBack
Mangaung|Africa|Business|Export|Industrial|Resources|transport|Africa|China|South Africa|Electricity Cost|Manufacturing|Manufacturing Industry|Manufacturing Sector|Products|Coenraad Bezuidenhout|Infrastructure|Stewart Jennings
Speaking at the launch of the Manufacturing Circle’s position document ahead of the African National Congress’s (ANC’s) Mangaung conference in December, he criticised the Free Market Foundation statement last month claiming that cheap imports were not hurting the manufacturing industry, saying that local jobs were being lost and exported to China, in particular.
The manufacturing sector had lost in excess of 300 000 jobs between the first quarter of 2008 and the first quarter of 2012.
He also noted the closure of about 440 000 small businesses, of which some were a direct result of Chinese imports, in addition to a depressed sector.
Manufacturing Circle executive director Coenraad Bezuidenhout added that the proliferation of unfairly incentivised imports from China, in the context of a global downturn and Chinese pressure in other markets, was the biggest threat to South Africa’s manufacturing industry.
Jennings noted that South Africa could not compete with Chinese products, which were often between 25% and 30% cheaper than locally produced items.
“Administered prices in other Brics countries have decreased by over 36% in the last decade, while South Africa’s electricity cost [for instance] have increased by over 170%.”
South Africa’s purchasing management index registered a three-year low, owing to bad business conditions and contraction in manufacturing, and Jennings forecast a further decline in the next two years unless key domestic policy issues, and the levelling of the trade situation, were not addressed immediately.
The trade deficit between China’s imports to the country and South Africa’s exports currently registered at 6.4% of gross domestic product.
“Manufacturing is among the top three multiplier sectors in terms of value addition, job creation, export earnings, and revenue generation for every R1 invested. It also provided the only viable means of beneficiating natural resources in the country,” the position document said.
The manufacturing sector provided the “greatest opportunity for job-rich economic growth”, but it was in crisis and key interventions were required by the ruling ANC to correct its path.
Government needed to ensure fair trade through the necessary adjustment to tariff and nontariff barriers; strengthening bilateral and multilateral regional and key export market ties; promoting a competitive and stable exchange rate; and improving transport linkages to regional and other key markets.
The Manufacturing Circle’s position document, which was presented to the ANC, tabled a number of proposals aimed at placing South Africa as the “gateway manufacturing destination” for exports to sub-Saharan Africa and enabling the country to compete domestically on an equal footing with imports. This, in turn, fed into the aims of pushing the country to become a competitive beneficiator of its own resources.
The report also tabled possible suggestions for interventions to promote a competitive currency and battling volatility, industrial policy, infrastructure and industrialisation and local procurement and industrialisation.
Edited by: Mariaan Webb
Creamer Media Senior Researcher and Deputy Editor Online
To subscribe email email@example.com or click here
To advertise email firstname.lastname@example.org or click here
Other Video News
Updated 2 hours 49 minutes ago The Department of Trade and Industry (DTI) has invited companies to participate in a trade and investment mission to Ghana and Nigeria from August 8 to 12. Companies in the agriculture and agroprocessing sectors, built environment professionals, automotive and...
Updated 2 hours 57 minutes ago Cabinet has approved the Industrial Policy Action Plan (Ipap) 2016/17 to 2018/19, which seeks to achieve a higher-impact industrial policy in difficult economic circumstances, including the difficulties faced by the domestic steel industry and the drought which has...
Updated 3 hours ago Multinational brewing and beverage company AB InBev has submitted an updated package of commitments to the European Commission (EC) in which it has offered to divest the entirety of JSE-listed SABMiller’s businesses in central and eastern Europe. This was in addition...
Recent Research Reports
Automotive 2016: A review of South Africa's automotive sector (PDF Report)
Creamer Media’s Automotive 2016 Report provides an overview of South Africa’s automotive industry over the past 12 months. The report provides insight into local demand and production, vehicle imports and exports, investment and competitiveness in the sector, as well...
Energy Roundup – April 2016 (PDF Report)
The April 2016 roundup covers activities across South Africa for March 2016 and includes details of a North Gauteng High Court Judge’s dismissal of a court application to postpone the 9.4% electricity tariff increase, which the National Energy Regulator of South...
Electricity 2016: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2016 report provides an overview of South Africa’s electricity sector, focusing on State-owned power utility Eskom and independent power producers, electricity planning, transmission, distribution and the theft thereof, besides other issues.
Energy Roundup – March 2016 (PDF Report)
The March 2016 roundup covers activities across South Africa for February 2016 and includes details of the Department of Energy’s plans to announce the preferred bidders for the first tranche of the coal independent power producer procurement programme; the Council...
Steel 2016: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2016 Report examines South Africa’s steel industry over the past 12 months. The report provides insight into the global steel market and and particularly into South South Africa’s steel sector, including production and consumption, main...
Construction 2016: A review of South Africa's construction industry (PDF Report)
Creamer Media’s Construction 2016 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; key participants; local demand; geographic diversification; corporate activity; black economic...
This Week's Magazine
The two spent-fuel pools at Eskom’s 1 800 MW Koeberg nuclear power station, in the Western Cape, will be full by 2018, increasing the urgency on the State-owned utility to begin pursuing alternative storage options. Koeberg has, over the past 32 years, accumulated a...
South Africa lacks the skills necessary to implement the government’s plan to build 9.6 GWe of new nuclear energy capacity, warns nuclear-qualified Quality Strategies International CEO David Crawford. “Apart from the concern about the affordability of the programme,...
Cybersecurity multinational Check Point has released its latest 700-series cybersecurity systems for small businesses, which draw on its international threat intelligence to provide up-to-date cybersecurity, says Check Point South Africa country manager Doros...
Daimler Trucks and Buses Southern Africa (DTBSA) saw a marked slip in new-vehicle sales in 2015 compared with 2014, with sales dropping from 5 897 units to 5 300 units. The decline came as the South African new truck and bus market declined from 31 558 units in 2014...
Group of 20 (G-20) economies threatened to penalise havens that don’t share information on their banking clients after the leak of the Panama Papers provoked a global uproar over tax evasion. The G-20 will consider “defensive measures” against financial centers and...