I wonder where the rand would be standing if Zuma hadn’t opened his mouth last year and fired Nene. Even though the event had a startling impact, it’s apparent that China’s economic slump is making things far worse for our once thriving country. It is so bad in fact, that even the Washington Post is talking about it:

China is South Africa’s largest trading partner, exchanging around $20 billion in goods a year, and its thirst for South Africa’s natural resources has helped power the country’s economy.

Yet without China to buy any of our products, we are all going to feel the effects:

The decline in the value of the rand, which could make it more expensive for South Africans to buy goods and services and harder to pay debts, is the most recent example of the global fallout of China’s slowdown.

Thanks China, I do hope you are taking back that request for us to include Mandarin as a second language in all our schools.

There’s a pretty ugly mix really of political, economic and deep-seated structural problems exacerbated by the slowdown in China which made the rand pretty vulnerable.

Basically, as China’s economy has slowed, so has their demand for natural resources such as iron ore, coal, gold, and other ores and minerals – which are our largest exports. This all went downhill back in August when the imports became too expensive for China after their sharp devaluation of their currency.

Chinese shares plunged again on Monday, following an even larger drop on Thursday and a brief respite on Friday. The Shanghai Composite Index fell 5.33 percent on Monday, while the Shenzhen Composite Index fell 6.60 percent.

So basically we’re pretty fucked, what with the worsening state of food security because of the drought. Yay.

[source: washingtonpost]