{"id":789330,"date":"2024-09-03T14:01:47","date_gmt":"2024-09-03T12:01:47","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=789330"},"modified":"2024-09-03T17:48:53","modified_gmt":"2024-09-03T15:48:53","slug":"ramaphosa-wants-to-level-the-playing-field-with-china","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/government\/789330\/ramaphosa-wants-to-level-the-playing-field-with-china\/","title":{"rendered":"Ramaphosa wants to level the playing field with China"},"content":{"rendered":"\n

President Cyril Ramaphosa is currently leading a state visit to the People’s Republic of China, and attempts at narrowing the country’s widening trade deficit is sitting at the top of the agenda.<\/p>\n\n\n\n

The President, numerous ministers and government officials met with their Chinese counterparts ahead of their participation at the Forum on China \u2013 Africa Cooperation Summit (FOCAC).<\/p>\n\n\n\n

Delivering his opening remarks during the official talks with Chinese President Xi Jinping in Beijing on 2 September, Ramaphosa began by highlighting the importance of the close economic alliance between the two nations.<\/p>\n\n\n\n

China is South Africa’s largest trading partner globally<\/strong><\/a>, and South Africa is China\u2019s number one trading partner in Africa. The two countries engage in hundreds of billions of rands in bilateral trade annually.<\/p>\n\n\n\n

While the close trade partnership between South Africa and China has increased, so has South Africa’s trade deficit, given the increasing nature of manufactured Chinese exports.<\/p>\n\n\n\n

According to data from the South African Revenue Service (SARS), in 2010, South Africa exported R59.06 billion worth of goods to China while importing R83.89 billion.<\/p>\n\n\n\n

This increased to R226.5 billion of exports to China in 2023 and R404.42 billion of imports \u2013 leaving an over R177 billion trade deficit<\/strong> between the two, which is the largest among any of the country’s trading partners.<\/p>\n\n\n\n

\u201cWe have witnessed an increase in our bilateral trade. However, as South Africa, we would like to narrow the trade deficit and address the structure of our trade,\u201d said Ramaphosa.<\/p>\n\n\n

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South Africa’s 2023 trade balance by country. Graphic: SARS<\/figcaption><\/figure><\/div>\n\n\n

\u201cAs we enter a new phase of our partnership, we should continue to consult closely in pursuit of a just, equitable and prosperous world.” <\/p>\n\n\n\n

\u201cI believe that our elevated levels of mutual trust will accommodate each other’s interests, views and concerns \u2013 and deepen our cooperation as we build a shared future,\u201d added the President.<\/p>\n\n\n\n

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In a joint statement, both sides said that they agreed to enhance cooperation and synergy between China\u2019s Belt and Road Initiative and South Africa\u2019s Economic Reconstruction and Recovery Plan, and to foster stable, fair, and supportive environments for businesses from both countries.<\/p>\n\n\n\n

The two countries also agreed to leverage mechanisms to further expand economic and trade ties “by improving the current trade structure, increasing market access and the export of value-added goods from South Africa.”<\/p>\n\n\n\n

Eight memorandums of understanding, which are meant to foster more equitable trade between the states, were signed by South African ministers of Agriculture, Science & Technology, and Trade alongside their Chinese counterparts.<\/p>\n\n\n

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High-ranking South African and Chinese officials during a meeting at Beijing\u2019s Great Hall of the People. Photo: GCIS<\/figcaption><\/figure><\/div>\n\n\n

South Africa eyeing an export-oriented economy<\/strong><\/p>\n\n\n\n

The Department of Trade, Industry and Competition (DTIC), who are on the state visit, have said that their goals include spearheading the country’s industrial policy which among other things, attempts to formalise South Africa as an export-oriented and manufacturing-led economy. <\/p>\n\n\n\n

DTIC minister Parks Tau told Business Day<\/a> that it is important for South Africa to pursue manufactured goods for export rather than primary goods, which make up the bulk of what South Africa trades with China.<\/p>\n\n\n\n

\u201cFor us, it’s important to be able to find an agreement on the electric vehicle sector but also to increase the quality of trade,\u201d the minister said, adding that “our attitude has been let\u2019s form a co-operative relationship with a country such as China, and where there are gaps, we find improvements.\u201d<\/p>\n\n\n\n

Tau said that in meetings with his Chinese counterpart, stakeholders agreed to increase the range and volume of manufactured goods to be sent to China, a move set to bolster South Africa’s exports and lessen the deficit gap.<\/p>\n\n\n\n

During a debate in the National Council of Provinces (NCOP), DTIC Deputy Minister Andrew Whitfield said that “it is essential that South Africa\u2019s economic growth is grounded in manufacturing-led growth.”<\/p>\n\n\n\n

\u201cManufacturing is indeed less volatile and less vulnerable to economic downturns and will create real, sustainable and decent paying jobs for our people. <\/p>\n\n\n\n

\u201cSouth Africa must also create an export-oriented economy. A dedicated focus on manufacturing growth will also lead to export growth,\u201d he said.<\/p>\n\n\n\n

The Deputy Minister said that the creation of an export-oriented economy can be realised through:<\/p>\n\n\n\n