China Trade Agreement With South Africa

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Several studies have shown that the growth of the Chinese economy has led to an increase in exports from other countries to China, due to the increase in demand for raw materials and intermediate goods in China. China has moved from agriculture and agriculture to a mass industrialized economy, which has increased the demand for raw materials. (Robertson &Xu, 2010, p. 3) The Chinese economy has grown by more than 8% over the past thirty years, and this rapid growth of the Chinese economy has led it to consider the world as its market, but also to become the most attractive business objective in the current offside process3. 3 This type of economic growth is expected to lead to an increase in imports into the Chinese economy, to meet the increase in domestic demand. The economic literature believes that economic growth leads to an increase in imports, as a high income promotes consumption. (Ugur, 2008) China has become an important trading partner of Asian countries, especially its neighbors. In 2003, China became the second largest export destination for Japan and the first for the South. (Gaulier, Lemoine &nal-kesenci, 2005, p. 10) Evidence from sub-Saharan Africa shows that Chinese imports from Sudan, Burkina Faso and Ethiopia increased significantly between 1995 and 2005 due to increased Chinese demand for exports from these countries (Geda & Meskel, 2008). With regard to South Africa, there are indications that trade between China and South Africa has increased rapidly.

According to Villoria (2009, p. 532), South Africa`s exports, most of which are minerals, account for about 18% of African trade with China. In addition, South Africa is the largest sub-Saharan exporter of industrial goods to China. (Alden, 2008) Official relations between the PRC and South Africa were established in January 1998. The dismantling of the apartheid regime in South Africa and the fall of the Soviet Union in the early 1990s paved the way for the establishment of official relations between the PRC and South Africa. Prior to the 1990s, South Africa had close official relations with the Taiwanese government for strategic and economic reasons. Summary: The rapid growth of the Chinese economy has increased China`s demand for imports needed to meet the increased demand for raw materials in its industries. In 2006, China became the largest export destination for South Africa. This paper attempts to study the relationship between China`s economic growth and South Africa`s exports to China. The paper aims to determine whether there is a significant link between China`s economic growth and South African exports to China. Using an import request function for China, we use an ARDL framework to analyze the problem of searching on the basis of quarterly data for the period 1992-2015.

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