China is not bleeding South Africa dry in terms of manufacturing and imports, but rather assisting in economic growth, Free Market Foundation economist Jasson Urbach said on Wednesday, adding that the majority of ordinary people in South Africa benefited from savings from imports.

“Those savings are then spent on other goods, investments and services in the economy. This will mean higher productivity in the workforce, which leads to higher wages and then leads to more saving. It completes a virtuous circle,” he said at a media briefing.

A recent report published by the University of East Anglia, from the UK, stated that South Africa had lost out on $900-million in trade with sub-Saharan Africa because of increased Chinese imports. It estimated that South Africa’s industrial production could have been about 5% higher had the country not lost market share to China.

But Urbach argued that the ‘buy local’ campaigns were based on the flawed logic that it could encourage local enterprise, leading to more jobs.

“Compelling people to buy local will make the very people we want to help, namely the poorest of poor, a lot worse off,” he added.

Urbach also called for the abolishment of taxation on cheaper imported goods, as tax and tariffs denied poor people access to some of the cheapest products. “Taxes also don’t always hurt the rich, but even the slightest change affects the poor.

“Further, foreign goods and services should be treated equally to domestic goods and services, promoting free trade,” he said.