Full year analysis reveals impact of Chinese quotas on import flows

ALTHOUGH THE traffic in China’s textile and clothing export items selected for a quota system last year by the SA authorities has tumbled – alternative cutprice source countries have helped to fill the gap. According to Taku Fundira, a researcher at the Southern African Trade Law Centre (tralac), a full year analysis of trade flows between SA and China, and the impact of the quotas, has been conducted. “It revealed that SA global imports in the textile/clothing quota lines declined by 22% – from R9.131-billion to R7.102-bn during 2007,” he said. “The imports of these lines from China, however, declined by 48% – from R7.155-bn to R3.714-bn.” The analysis therefore calculated that the Chinese market share in quota lines had declined from 78.4% to 52.3% over the year. Also, said Fundira, Chinese exports of all goods into SA increased by 29% to R60.3-bn during 2007 – and this meant that quota lines declined from 15.3% of total Chinese exports into SA in 2006 to a much lower 6.2% in 2007. But the study found that other sources were now compensating about R1.412-bn of the shortfall in imports of the quota items from China in 2007 – with the main sources being Hong Kong (R377- million), India (R374-m), Indonesia (R213-m), Pakistan (R207-m) and Mauritius (R206-m). “The largest increases in imports by value in quota lines were from Hong Kong, Indonesia and Malaysia,” said Fundira. “In percentage terms the increase from Malaysia was massive, while the increases from Myanmar, Sri Lanka, Vietnam and Madagascar were also all substantial.” And, while the analysis found that the quotas had indeed significantly reduced imports from China (in value terms), Fundira posed two questions. “Does this evidence suggest that the quota imposition on China was a sensible measure to quell the rise in Chinese imports and thus offer some protection to the local industry? “And could/should the authorities not have anticipated an increase in imports in the quota lines from alternative sources?”