South Africa wants to sell more value-added products to its BRICS partner countries rather than just exporting primary products to address structural trade imbalances, Trade and Industries Minister Rob Davies said.
“We are relating as a supplier of primary products like iron ore and we import value-added products like cellphones,” Mr. Davies said commenting on exports to BRICS (Brazil, Russia, India and China) partners having quadrupled between 2006 and 2010, while imports doubled.
He said South Africa would like to export more value added products to these countries, according to the daily Business Report.
This would address the “structural imbalances in the trade relations between South Africa and its partners in Brics,” Mr. Davies was quoted as saying.
China is South Africa’s top trading partner in this process, and India sixth.
The Minister said there would be a major drive featuring exhibitions in China for markets there to see how South Africa could bring in value-added goods.
“We have asked China how we can change the structural shape of trade relations and China has agreed to invest in beneficiation,” Mr. Davies said.
More than 250 products to be showcased in China included foodstuffs and motor components. But analysts were sceptical of exports being competitive enough.
“The labour structures (in South Africa) are not similar to India and China,” Freddie Mitchell, an economist at Efficient Group told Business Day.
“Business is there to make profit, but if we look at the labour system, it is very militant with the wage demands and there is a strike season.”
Goolam Ballim, chief economist at Standard Bank, said South Africa should have pushed hard when it joined BRICS to get its products and those of the rest of Africa into the emerging markets: “The solution lies in between to more meaningfully penetrate foreign markets, especially China with its rising demand and the reindustrialisation of African markets.”
