On The Problems And Countermeasures In The Development Of Bilateral Trade And Investment Between China And South Africa

In the early90s, our country has proposed a strategy of market diversification, it aims at countries and regions which are of no market share or smaller, for the purpose of reducing export market concentration and reducing the risk. Especially after the occurrence of the crisis in the United States in2008, the strategy shows significance by the fact much more. South Africa is the most economic strength country in Africa, which is very rich in natural resources. China imports a lot of resources from South Africa to meet the needs of economic development. And South Africa’s entrepot trade is very active, which is "springboard", some countries need it to develop trade with other southern African countries. South Africa have radiation effects in other African areas, so the development of trade between China and South Africa has a positive and profound influence.During1990to1993, trade between two countries achieved the change from indirect trade to direct trade. Since the establishment of the new South Africa government in1994, trade between two countries increased. After two countries formally established diplomatic relations in1998, trade had sustained and stable growth. Moreover, economic cooperation and trade relations had deepened further.Although the total volume of trade between South Africa and China achieved rapid growth, the proportion that trade between South Africa and China accounting for trade of South Africa continually increased, had reached nearly11%until2010. Furthermore, China had been the first and largest trade partner of South Africa in2009. The total amount of trade between two countries grow rapidly, but it is important to note that the proportion of China’s trade only about1%, this shows China and South Africa should also continue to make efforts to promote the development of the trade between the two countries.In addition, the structure of import and export commodity was slightly single. The main products which exported from South Africa to China were still based on mineral, metals, and other resource-based products. The main products which exported from China to South Africa were based on mechanical and electrical products, textiles and raw materials, some low value-added or not high-tech manufactured goods and a small number of high-tech products. So the structure of import and export commodity needs a lot of improvement.Of course, increasing events of dumping and anti-dumping and frequent use of tariffs and non-tariff barriers are also the main problem of the two countries’ trade.Through data analysis, we can find that the main reason of initiating anti-dumping investigation and using trade protection measures by South Africa is not due to the trade deficit, in fact, because of avoiding the impact by Chinese export products on domestic industries in South Africa. Because this impact can bring bankruptcy to South African companies and decrease the unemployment rate, South Africa would like to protect domestic industries by initiating anti-dumping investigations and using trade protection measures.After the crisis in the U.S., it provides a good opportunity for our country enterprise to "walk out", our country’s enterprises should seize the opportunity, avoid risk at the same time actively promote foreign investment. Investment, FD1between South Africa and China started later, and yet growth was quite unstable, and showed diversified trend. Due to economic globalization going deep gradually and rich natural resources in South Africa, it occurred the wave of "hot South Africa" in the world. Addition to "going out" strategy guidelines adopted by China, our enterprises joined the wave, since that, the investment in South Africa was poised to take off. Although there are many favorable conditions on investment in South Africa, such as perfect infrastructure construction and sound financial system, there are still some risks, for instance,"neo-colonialism" said China’s investment in South Africa to be plundering resources, it caused the resistance mood of some enterprises investing in South Africa and also seriously hindered the pace of Chinese corporation to invest in South Africa; low level of South African workforce, the issues of security and strike, cultural differences and so on, all of these raise the risk of our companies investing in South Africa greatly, especially investment in some industries of South Africa, laws and regulations are not stable, combined with not knowing the local market very well, resulting in our enterprises investing in South Africa blindly, finally, suffered huge losses.In order to better promote trade and economic development in South Africa and China, we should advance economic and trade cooperation in key areas vigorously, like active cooperation in mining between two countries. Through using the index, CCm and CSm, to analyze several minerals which are shortage in China but rich in South Africa among manganese, galena, nickel ore, antimony ore, iron ore and chrome ore, we can study complementary of South African export-China import structure. It showed that the structure of South Africa export China’s import in several minerals is very complementary, there are greater space in cooperation, Chinese enterprises can invest in these types of mineral resources, so as to stimulate its exports and meet the needs of our economy; strengthen financial cooperation between two countries under the framework of the cooperation mechanism in the BRIC countries; vigorously promote energy cooperation between South Africa and China. South Africa’s electricity installed capacity among the first in Africa, but there had been a serious shortage of electricity in2008. So South Africa is seeking partners of energy development actively, which provide opportunities for China in this field of cooperation with South Africa. Although oil resources in South Africa are not rich, its oil and gas exploration, development and refining has certain advantages, We can learn their refining technology to develop oil resources jointly; Since South African greasy wool quality is superior to other countries’s, China should continue to expand trade of greasy wool with South Africa. Through analyzing the data, we can find that the volume of degreasing wool trade between two countries was in a rising trend, and believe that we can increase the space in degreasing wool trade cooperation. Invest, there are broad prospects in mining, metal industry and telecommunications industry in South Africa so it has many investment opportunities.Although there will be some problems in the development of trade and investment between China and South Africa, we believe that as long as we find out the causes of your problems, try to analysis, puts forward reasonable and effective measures, the future of the two countries on trade will turn to faster and better direction, at the same time for the two countries themselves, it also can produce good and profound influence on economy.