Industry calls for more clarity on Chinese export restrictions

ALAN PEAT
THE CHINESE and SA governments have signed up a deal which will see China - a textile producing hotshot whose exports of cheap clothing and textiles to this country have battered local industry – voluntarily restricting its exports for the next three years. A report last year for the national economic development and labour council (Nedlac) calculated that China contributed 70% of total clothing imports into SA. But, during last week’s Cape Town meeting between Chinese premier Wen Jiabao and SA president Thabo Mbeki, a memorandum of understanding (MOU) on “promoting bilateral trade and economic co-operation” was signed. This effectively limits imports of 31 product categories, and their 100 products, until the end of 2008, according to
the department of trade and industry (dti). But just what the restricted products are, and what China’s promise of cuts will mean in practice, are as yet unknown to the individual companies in the local industry, according to an executive source in the SA textile sector. This viewpoint was supported by Tony Twine, director and senior economist at Econometrix, in an interview with BuaNews. “Any restriction on textile exports to SA implies a little relief,” he said. “Exactly how much, remains to be seen.” Despite extensive research at the dti, these details had also not been revealed to the Textile Federation, executive director Brian Brink told FTW just as he embarked on an overseas visit. And, although Willem van der Spuy, the dti’s director of bilateral trade programmes in Asia is known to have explained the agreement to the trade and industry portfolio committee of parliament, attempts to contact a member of parliament who sits on this committee failed to materialise before FTW’s print deadline. All that is known is that Van der Spuy did tell the committee that there would be “specific restraints” on each of the 100 products. Also that, according to the agreement, China would help train SA clothing and textile technicians, and encourage its textile companies to have direct investment in SA. Just why the department is indulging in such secrecy on the matter has mystified those FTW contacted, and, indeed, it has led to an industry feeling that the agreement may have more political kudos for China/SA than practical effect. In a recent survey conducted on FTW’s sister online publication FTNow, this is how the readers responded to the question: What has been the impact of cheap Chinese imports on your business? Negative 32% Positive 30% None at all 38%