|
South Africa's trade balance with Japan for first 6 months of 2018
Date: 22 Aug 2018 Category: Economics |
Related Topics |
|
We take a look at the customs data published by the South African Revenue Service (SARS) and focus on South Africa's trade with Japan for the first 6 months of 2018. What exactly are we exporting to Japan, and conversely what are we importing from Japan?
We take a look at the numbers below. |
|
So what does South Africa and Japan trade in?
The image below shows the cumulative value of trade for the first 6 months of 2018 for a wide variety of product categories. It shows the total value exported, total value imported and then the trade balance which is (Exports - Imports). A positive trade balance shows South Africa exported more of a product than what it imported from Japan. A negative trade balance shows South Africa imported more of a product category from Japan than what they exported to Japan.
By far South Africa's best export to Japan is precious metal, think gold, platinum and the likes, with South Africa sitting with a positive trade balance with Japan for the first 6 months of 2018 of R12.13 billion. That is South Africa exported R12.13 billion more in Precious metals to Japan than what they imported from Japan. On the flip side, Japan's best export to South Africa is equipment components. These include electronic components used in every day life, cars, electronics, machinery etc. For this category, South Africa has a trade deficit (negative trade balance) of just over R5 billion.
Of the 22 product categories in the image above, South Africa has a positive trade balance, while for 12 of the 22 categories South Africa has a negative trade balance with Japan. But overall for the first 6 months of 2018, South Africa has a positive trade balance (trade surplus) of R8.845 billion. Largely thanks to the massive amounts of precious metals exported to Japan. If precious metals was stripped out of this graphic, South Africa would have a trade deficit with Japan of over R3 billion.
We have raised concerns in the past about South Africa's exports being so dependent on commodities and minerals, while intermediate and final goods (basically goods that has been manufactured or is ready for use) or imported by South Africa more often than not. This is part of the reason why South Africa's manufacturing is struggling the way it has been struggling.
If one looks closely at the table closely the top 5 exports for South Africa are all basic and elementary items in which not a lot of manufacturing takes place. Its mostly raw materials and agricultural related products. While Japan's top 5 exports to South Africa are all manufactured goods being imported from Japan. Either South Africa does not have the knowledge and know how or the production capacity to produce these goods, or if South Africa can produce these goods, they cannot produce it for cheaper than what companies and individuals import it from Japan, thus importers kills of the local manufacturers by importing the cheaper manufactured goods from Japan.
In the case of electronics and machinery and equipment and photographic equipment (such as Sony and Nikon cameras), Japan has the knowledge, know how and skills to manufacture these goods as they have been doing so for ages, giving them the competitive advantage over local guys.
This is something we are worried about and we dearly hope South Africa can save its local manufacturing industry and lessen its dependence on raw material and commodity exports.
Of the 22 product categories in the image above, South Africa has a positive trade balance, while for 12 of the 22 categories South Africa has a negative trade balance with Japan. But overall for the first 6 months of 2018, South Africa has a positive trade balance (trade surplus) of R8.845 billion. Largely thanks to the massive amounts of precious metals exported to Japan. If precious metals was stripped out of this graphic, South Africa would have a trade deficit with Japan of over R3 billion.
We have raised concerns in the past about South Africa's exports being so dependent on commodities and minerals, while intermediate and final goods (basically goods that has been manufactured or is ready for use) or imported by South Africa more often than not. This is part of the reason why South Africa's manufacturing is struggling the way it has been struggling.
If one looks closely at the table closely the top 5 exports for South Africa are all basic and elementary items in which not a lot of manufacturing takes place. Its mostly raw materials and agricultural related products. While Japan's top 5 exports to South Africa are all manufactured goods being imported from Japan. Either South Africa does not have the knowledge and know how or the production capacity to produce these goods, or if South Africa can produce these goods, they cannot produce it for cheaper than what companies and individuals import it from Japan, thus importers kills of the local manufacturers by importing the cheaper manufactured goods from Japan.
In the case of electronics and machinery and equipment and photographic equipment (such as Sony and Nikon cameras), Japan has the knowledge, know how and skills to manufacture these goods as they have been doing so for ages, giving them the competitive advantage over local guys.
This is something we are worried about and we dearly hope South Africa can save its local manufacturing industry and lessen its dependence on raw material and commodity exports.