China remains South Africa’s biggest country trading partner, with imports and exports of R291.5 billion in 2015 and the trade balance steeply in favour of China at R107.3 billion, Institute of Race Relations chief economist Ian Cruickshanks said.
“The European Union (EU) is our biggest regional trade partner, with imports and exports totalling R535.3 billion. The trade balance favours the EU to the tune of R110.8 billion.” SA recorded trade deficits with most major regions and countries of the world.
“Examples include a deficit of R55.3 billion with Germany, R13.1 billion with Italy and R9.7 billion with Brazil. The general exception is trade with other African countries, where trade balances with non-oil producers are mostly in SA’s favour,” he said.
Exceptions included America – as a result of the benefits South Africa draws from the African Growth and Opportunity Act agreement – the United Kingdom, Japan, Hong Kong, Belgium, the Netherlands and non-oil producing African trade partners.
“Oil and manufactured goods, particularly those with a high technology content, account for a large chunk of SA’s imports.
Exports are mainly materials extracted from the ground and products of the heavily subsidised local motor vehicle industry.” But not even the depreciating currency has been able to improve SA’s economic competitiveness.
“On the contrary, the weak currency has inflated producer price inputs, offsetting potential gains from higher foreign exchange export earnings,” Cruickshanks said.
“Continued global economic weakness, together with the reluctance of domestic policymakers to introduce structural reforms, point to ongoing trade account deficits that will ripple through to a higher current account deficit, probably with a negative impact on the country’s sovereign credit rating.”