Abstract
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.
Highlights
Neo-liberalization in South Africa’s socio-political economy is a child of necessity; essentially owing to the government’s intention to diversify the economy in multiple sectors and allowing foreign direct investment into and out of the country
Concerns have been raised regarding the slow pace of growth and/or lack of dynamism in the entire manufacturing sector of South Africa since the end of apartheid leading many to suggest that neoliberal policy has not brought the expected positive changes in the socio-political economy including trade and commerce
Our view is that despite the structural difficulties that Chinese exports of manufactured commodities into South Africa have created in South Africa’s sociopolitical economy, there is still a contextual gap in literature in an attempt to analyze the effects of Chinese export of manufactured products into South African market
Summary
Neo-liberalization in South Africa’s socio-political economy is a child of necessity; essentially owing to the government’s intention to diversify the economy in multiple sectors and allowing foreign direct investment into and out of the country. Fingers point at Chinese import of finished products into South African market as a major cause of near deindustriali-. Productive economies of Europe, USA and Japan have moved up the ladder from the production of tangible goods to producing services As a result, these economies are no longer competitive in laborintensive manufacturing industry when compared with more competitive China (see Bernard, Jensen, & Schott, 2006). Chinese imports to South Africa are ever on the increase since the liberalization of the South African economy and this has had an adverse effect on South Africa’s socio-political economy in several directions (Edwards & Jenkins, 2015)
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