Neo-liberalization: the impact of Chinese exports on South Africa’s sociopolitical economy

  • 1787 Views
  • 330 Downloads

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

On gaining independence, one of the first steps it took was to open its doors to various socio-economic dynamics. It is fair to say, therefore, that South Africa’s neo-liberal approach was necessitated by the nation’s desire to diversify its economy in multiple sectors and, therefore, permit foreign direct investment into the country. To most researchers, this has resulted in near deindustrialization leading to gross job losses and reduced standards of living. Essentially, this paper, relying on realist theory, delves into one of the issues, i.e., the demise of the manufacturing sector in South Africa to deliver the poignant explanation pertaining to South Africa’s sociopolitical economy. The authors find that the presence of China’s finished products in South Africa’s market has emboldened and continues to debilitate its manufacturing industry. A major concern is that South Africa’s attempts to soften this effect on its manufacturing sector through its protectionist policy – precisely the application of the quota system on imported goods – will not go too far considering the limitations placed on South Africa by virtue of its membership in organizations such as WTO and BRICS.

view full abstract hide full abstract
    • Fig. 1. Relationship between textile imports and employment levels
    • Fig. 2. Percentage distribution
    • Table 1. Top 10 countries in sub-Saharan Africa by number of investment projects in China
    • Table 2. Trade partners
    • Amin, M., Naseer, R. and Ishtiaq, T. (2011). Realism - Dominating Theory in International Relations: An analysis, Berkeley Journal of Social Sciences, vol. 1, No. 7, pp. 1-11.
    • Amiti, M. & Konings, J. (2007). Trade liberalization, intermediate inputs, and productivity: Evidence from Indonesia, American Economic Review, 97, pp. 1611-1638. doi:10.1257/aer.97.5.1611
    • Andreasson, S. (2010). South Africa and the political economy of postcolonial Africa: emerging markets or increased marginalisation? Draft Paper unpublished, pp. 1-22.
    • Andreasson, S. (2011). Africa’s Prospects and South Africa’s Leadership Potential in the Emerging Markets Century, Third World Quarterly, Vol. 32, No. 6, pp. 1165-1181.
    • Ashournia, D., Munch, J., Nguyen, D. (2014). The Impact of Chinese Import Penetration on Danish Firms and Work. Discussion Paper No. 8166, Social Science Research Network.
    • Beeson, M., Soko, M. and Yong, W. (2011). The New Resource Politics: Can Australia and South Africa Accommodate China? International Affairs, Vol. 87, No. 6, pp. 1365-1384.
    • Bernard, A.B., Jensen, J.B., and Schott, P.K. (2006). Survival of the Best fit: Exposure to Low-wage Countries and the (uneven) Growth of U.S. Manufacturing Plants, Journal of International Economics, 68, pp. 219-237.
    • Brooks, S.G. and Wohlforth, W.C. (2005). International Relations Theory and the Case against Unilateralism, Vol. 3, No. 3, pp. 509-524.
    • Davies, R. (2012). Parliamentary response from the Minister of Trade and Industry to a request by the official opposition (Democratic Alliance) on the extent of trade between South Africa and its BRICS partners. National Assembly, Cape Town, 29 August 2012.
    • Dey, I. (2005). Qualitative data analysis, London: Routledge, Taylor and Francis Group.
    • Drezner, D.W. (2008). The Realist Tradition in American Public Opinion, Vol. 6, No. 1, pp. 51-70.
    • Edwards, L. & Jenkins, R. (2015). The Impact of Chinese Import Penetration on the South African Manufacturing Sector, The Journal of Development Studies, 51 (4), pp. 447-463.
    • Edwards, L. & Rankin, N. (2012). Testing Trade Theory: The Retail Price Impact of Clothing Quotas in South Africa. Paper presented at CSAE Conference, Oxford, March 2012.
    • Edwards, L. and Jenkins, R. (2012). Chinese Competition and the Restructuring of South African Manufacturing DEV research briefing 4. Economic development – trade.
    • Edwards, L. and Jenkins, R. (2014). The Competitive Effects of China on the South African Manufacturing Sector. Southern African Labour and Development Research Unit (SALDRU).
    • Edwards, L., Naughtin, T. & Rankin, N. (2011). No Chinese Jackets Required: Quantitative restrictions and quality upgrading in South Africa. Paper presented at International Conference on International Trade and Investment, Mauritius, Dec 2011.
    • Fedderke, W.J. (2014). Exploring Unbalanced Growth in South Africa: Understanding the Sectoral Structure of the South African Economy. South African Reserve Bank Working Paper Series WP/14/07, WP/14/07.
    • Federico, S. (2010). Industry Dynamics and Competition from Low-wage Countries: Evidence on Italy.
    • Fourie, P. (2013). Turning dread into capital: South Africa’s AIDS Diplomacy, Fourie Globalization and Health, Vol. 9, No. 8, pp. 1-13.
    • Freemantle, S. and Stevens, J. (2013). BRIC and Africa – BRICS trade is flourishing and Africa remains a pivot. Standard Bank. February 12, 2013.
Related Articles

  • The place and perspectives of Ukraine in international integration space

    Vitalina BabenkoORCID Researcher ID, Maryna PasmorORCID , Juliia Pankova , Mykhailo Sidorov doi: http://dx.doi.org/10.21511/ppm.15(1).2017.08
    Problems and Perspectives in Management Volume 15, 2017         Issue #1         pp. 80-92 Views: 1535 Downloads: 246 TO CITE АНОТАЦІЯ

    The resulting indexes for integration processes state development analysis were formed. The integral indexes illustrating integration state were calculated on the basis of member countries of BRICS and Ukraine. It provided the possibility to evaluate socioeconomic state of the countries from the point of view of international integration and create integration processes development scenarios. The strategic directions of integration processes development for Ukraine and member countries of BRICS were formed.

  • Environmental Performance Index and GDP growth rate: evidence from BRICS countries

    Tonmoy ChowdhuryORCID , Sadia Islam doi: http://dx.doi.org/10.21511/ee.08(4).2017.04
    Environmental Economics Volume 8, 2017         Issue #4         pp. 31-36 Views: 1290 Downloads: 657 TO CITE АНОТАЦІЯ

    BRICS countries have experienced rapid economic growth and played a vital role in the world economy because of their capacity to produce large number of manufacturing products, supplies of raw materials, natural resources and the advantage of geographical locations and demographic attributes. Extremely speedy process of industrialization process has been acting as one of the key driving forces for rapid economic growth. According to the IAEA, coal use in India and China will more than double by 2050. To achieve high economic growth, these countries are facing severe environmental problem. India and China were the top two nations with largest total ecological footprints in 2003. Research question of the study is whether relationship between Environmental Performance Index and GDP growth rate in BRICS countries prevails? The study used secondary sources. The study used a sample of five emerging developing countries (BRICS) namely Brazil, Russia, India, China and South Africa. This study examined Environmental Performance Index (EPI) and GDP trends. Based on the collected data covering the period of 2002 to 2016, the analysis indicates that there is a negative relationship between GDP growth rate and Environmental Performance index. However, the study observed that strong correlation between EPI and GDP growth rate except Russia did not prevail. National accounting procedure should include environmental impact which needs to be addressed by the policy makers as suggested by authors.

  • Budget deficits, investment and economic growth: a panel cointegration approach

    Goitsemodimo Abel Molocwa , Yohane Khamfula , Priviledge CheteniORCID Researcher ID doi: http://dx.doi.org/10.21511/imfi.15(3).2018.15
    Investment Management and Financial Innovations Volume 15, 2018         Issue #3         pp. 182-189 Views: 990 Downloads: 180 TO CITE АНОТАЦІЯ

    This paper discusses the political economy of budget deficits among the BRICS nations between 1997 and 2016 using a panel cointegration approach to determine the long-run relationship between economic growth, budget deficits, inflation and gross investment. The results of the study show a long-run equilibrium association among economic growth and the selected variables. Furthermore, there is a positive relationship between budget deficit, inflation, and economic growth, for the period under study for BRICS countries. Lastly, the results support the view that there is bi-directional linkage from budget deficit to economic growth and vice versa.

Download Preview
Close
Problems and Perspectives in Management
Problems and Perspectives in Management