Globalisation and deglobalisation

South Africa is a small open economy characterised by increasing trade and financial integration since the advent of democracy in 1994. The country’s business cycle has been strongly synchronised with the rest of world, with large common shocks accounting for much of the increased synchronisation. South Africa’s major trading partners are China, Germany, India, Japan, the United Kingdom and the United States. Exports are dominated by commodities and imports by oil and manufactured goods. Globalisation has added to the economy’s productive capacity through increased choice and cheaper inputs for production, thus relieving bottlenecks and supply side pressures on price formation. But exposure to global markets has not been entirely smooth, with some industries, such as the motor production industry, benefiting, and others, such as clothing and textile industry, suffering. The globalisation of the economy has also been characterised by a rise in immigration and emigration flows.