LETTER: Opportunity for SA as countries turn away from China

SA has been a price taker for mineral resources due to our relatively small economy in comparison to our largest customer, China.

Debate about resource beneficiation here has died, given SA’s small economy and dependence on China for the bulk of our consumer goods.

Covid-19 triggered many countries to move their production away from China to Malaysia, Thailand, Mexico, India, Vietnam and Bangladesh. These include Apple, Mazda and Lego. Terms such as derisking and decoupling from China are often heard.

Anglo American and others have lost billions of rand due to China’s tepid post-pandemic recovery, as reported on the front page of this newspaper (“Anglo American’s R93bn loss in value tests boss Duncan Wanblad”, December 8).

There is a glaring opportunity for SA as the abovementioned countries increasingly replace Chinese manufacturing. We could force more local beneficiation of the mineral resources these nations purchase from SA, and require more local content in goods we import from them.

We could introduce a much-resisted resource export tax to counter our diminishing tax revenues, as they lack China’s size, power and purchase volumes. A scrap metal export tax could be of great value to us too. We need to assert our newly found supplier power to extract more value along the supply chain of international trade.

The department of trade, industry & competition is neither visionary nor skilled enough to squeeze out more value for SA. In contrast to these countries, this would be impossible for resources bought by a wealthy and powerful China from a dependent SA.

We should consider complementing our trade, industry & competition staff with retired foreign counterparts who have done successful work for their countries.

Hitesh Naran
Johannesburg

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