Tuesday, August 20, 2013

Impact of Chinese Imports on South African Manufacturing

The Southern African Labour Development Research Unit at the University of Cape Town in South Africa and the School of International Development at the University of East Anglia in the UK published in July 2013 a paper titled "The Impact of Chinese Import Penetration on the South African Manufacturing Sector" by Lawrence Edwards, University of Cape Town, and Rhys Jenkins, University of East Anglia.

The rapid growth in imports from China over the past decade contributed to the relatively slow growth in output and the decline in employment in South African manufacturing.  Chinese penetration of the South African market increased rapidly over the past decade, in part due to displacement of imports from other countries, but more importantly at the expense of local production.  Exports of manufactures to China did not add significantly to industrial growth in South Africa, whereas labor-intensive industries were particularly badly affected by Chinese imports implying that the negative impact on employment was more than proportional to the output displacement.  However, Chinese imports also contributed to lower producer price inflation in South Africa, which in turn moderated increases in consumer prices and helped to curtail production cost increases. 

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