China calls for open global economy
Concerns over US ‘trade war’
The Brics Business Forum kicked off yesterday in Johannesburg with Chinese president Xi Jinping warning the US that a trade war would “only end up hurting themselves”.
“A trade war should be rejected because there will be no winner. Those who pursue this course will only end up hurting themselves,” Xi said.
US 25% tariff hikes on $34billion (R446-billion) of goods produced in China came into effect early this month and another $16-billion worth were expected later in the month with an additional $500-billion that was under consideration if Beijing retaliated.
SA will not be spared from the trade war, either.
The ripple effect of the trade tensions is also impacting on the global economy, Trade and Industry Minister Rob Davies told reporters earlier in the day, although he did not have quantifiable data at hand.
SA’s steel, aluminum and automotive industries are expected to be impacted by protectionism policies arising out of the US in the trade war. South Africa has re-applied for exemption from duties on imports of steel after an earlier submission was rejected.
Xi told conference delegates that Brics-member countries – Brazil, Russia, India, China and South Africa – had an obligation to “firmly promote an open global economy”. This included collaboration with other emerging market countries and developing countries to ensure they too share in the benefits of globalisation.
He said the first decade saw the lift-off of the Brics partnership which has borne rich fruit and contributed much to the recovery of the global economy following the 2008/2009 economic recession.
On Tuesday, during Xi’s state visit, China committed $14.7-billion in investment into the SA economy. China has also committed to taking steps to increase imports from SA.
In his opening remarks yesterday, President Cyril Ramaphosa said Brics leaders were concerned about the rise in unilateral measures in global trade, which were incompatible with World Trade Organisation rules. He said the developments called for “a thorough discussion on the role of trade” in promoting sustainable development.
He said two important developments since the formation of Brics was the establishment of the Brics Business Council in 2013 and the New Development Bank.
Ramaphosa told delegates that there was a great potential for investment in Africa.
“In the past decade Africa has grown at a rate of 2 to 3% faster than the global [average] gross domestic product [GDP], with regional growth predicted to remain stable above 5% in 2018,” he said.
“This growth will be supported by increasing foreign direct investment flows, public investment in infrastructure and higher agricultural production.
“We are seeking to reinforce the strong bonds that we developed with our Brics partners by expanding investment into the country.”
Ramaphosa will today chair two meetings of Brics leaders who will later embark on a retreat.