In the face of escalating tariff instability between the US and China, South Africa needs to sharpen its focus on economic blocs that are trade friendly – and China is one of those countries.
That’s the view of Investec Import Solutions head of corporate accounts, Dr Greg Cline, who told FTW that because of the pressure “Trump tariffs” were placing on China, businesses from Asia’s leading economy were increasingly interested in sustaining cash flows through enhanced Sino-South African trade. Thankfully, despite recent tumult in the global economy and the impact that the trading of tariff blows has had on emerging markets such as Turkey, South Africa remains a promising prospect, in his view.
“We are seen as an economy where it’s quite easy for foreign investors to enter and exit the market compared to other developing economies.” However, access to funding and a perceived inability to adapt to changing circumstances around finance appear to affect the ability of importers eager to tap potential. What they should be considering, Cline added, were the early settlement discounts offered to local businesses importing goods from collaborative trade partners such as China. He argued that these discounts, ranging from three to five percent, should ideally persuade importers to increase their books by taking on additional capital.
He added that access to available funding or alternative ways of looking at unlocking possible liquidity was often necessary to realise the growth aspirations of importers. Instead trade opportunities go a-begging because importers have their money tied up in the inventory of goods that are sitting in storage or are being shipped.
