By Ethel Hazelhurst

Johannesburg – Last year, China’s exports to the rest of the world rose more than 27 percent to $969.3 billion (R7 trillion).

\”And its exports to South Africa rose a whopping 51 percent to $5.8 billion,\” says Ron Sandrey, a senior research fellow at the Trade Law Centre for Southern Africa (Tralac), in a note on the centre’s website.

In that note, Sandrey analyses figures just released by the Chinese customs authorities. The latest data have lifted South Africa one place on the list of destinations for Chinese exports, to number 27, he says.

\”Electrical machinery and general machinery, with increases of 57 and 46 percent respectively, remain top of main products leaving China for South Africa,\” he says.

\”But there is also a dramatic increase in clothing exports reported. The third main line, knitted apparel, increased by 138 percent – from $280 million in 2005 to $667 million last year – while … woven apparel increased by 47 percent, from $389 million during 2005 to $571 million last year. Thus, clothing exports to South Africa crashed the $1 billion mark and only stopped to pause at $1.24 billion at December 2006,\” he says.

An earlier Tralac analysis shows that \”a remarkable feature\” of Chinese imports to South Africa is that they dominate the markets where they compete, particularly textile, clothing, footwear and leather. In each case they hold more than 50 percent of local market share.

South Africa imposed temporary trade quotas on about 70 percent of clothing imports from China last month, to protect the local clothing industry.

Sandrey says imports to China from the rest of the world rose nearly 20 percent last year, while those from South Africa increased by just under 19 percent.

\”Ores remain the top import from South Africa ($1.3 billion and up by 31.1 percent), followed by precious stones and metals ($1.2 billion and up by 23.8 percent). Iron and steel products declined by 30 percent to $298 million,\” he says.

He points out that the top five categories of imports represent 83 percent of the total.

The Chinese trade data show that South Africa’s bilateral surplus of $3.46 billion three years ago is now a deficit of $1.7 billion.

Sandrey’s earlier research has shown that a free trade agreement with China would open up export avenues for motor vehicles and aircraft as well as apples, apricots, pineapples, avocados, chocolate products, processed fish and meats, titanium oxide and other ores, lines of iron and steel and other manufactured products.

Sandrey cautions that a comparison of local and Chinese figures for 2005 shows that Chinese customs data is not directly reconcilable with South African trade data: Chinese customs reports that South African imports to China were worth two and a half times the figures reported by the SA Revenue Service.

There are a number of reasons for the discrepancies, he says, including the costs of shipping goods to China, \”and, in the case of iron ore, for example, these costs are substantial\”.

Another factor that explained the difference is that \”there are almost no reported exports of platinum and diamonds from South Africa but these are major imports into China\”.

Published on the web by Business Report on January 31, 2007.