South Africa already seeing benefits of BRICS clubFollow @MadeItInAfrica
It seems as if South Africa is already benefiting from its partnership with the BRICS countries.
Lionel October, director-general of South Africa’s Department of Trade and Industry, recently told the Exporters Club Western Cape that China has invited South African manufacturers to showcase their products to Chinese buyers.
China is currently South Africa’s biggest trade partner. Trade between the two countries is, however, unequal in that South Africa mostly exports raw mineral resources to China, while it imports manufactured goods such as mobile phones. “This is an unsustainable trade pattern,” October said.
Exporting value-added goods, rather than raw materials, creates employment opportunities and has various other economic benefits for a country.
“They wanted to set targets for the BRICS countries with regard to investment and with regard to increased trade . . . So we said, ‘Fine, let’s set targets for increasing trade between our countries, but it can’t be the same kind of trade. You are going to have to buy manufactured products from us’,” October noted.
Following negotiations, China agreed to host an exhibition in November this year for South Africa to promote its top manufactured products to large Chinese buyers. According to October, the exhibition will not be a general trade fair, but a highly focused event.
The Department of Trade and Industry has appointed a full-time person to work on the project. October said that products of both large firms and small businesses will be able to qualify although companies will be required to quickly increase their production capacity. “They are . . . looking for products that we can scale-up immediately . . . As you know the purchases there are big,” he explained.
He described the exhibition as a “massive opportunity” but added that there will need to be a shift in thinking as many South African companies are not familiar with the Chinese market.
October said that South Africa wants to negotiate similar arrangements with the other BRICS countries.
South Africa is also strengthening economic ties with Brazil. “As you know, Brazil will be hosting the next World Cup . . .We’ve already taken a few delegations across to Brazil to bid to build the stadiums, to help with infrastructure . . . We’ve also brought over a big delegation from Brazil . . . where they could look at all the products we can offer,” October said.
“We are sending a foreign economic representative to Sao Paulo and we are also putting a full-time person in place to collaborate and to look at opportunities for South African companies in Brazil over the next few years,” October added.