|
Related Topics |
|
Since the dawn of democracy in South Africa, South Africa's manufacturing industry has been on the decline due to South African companies being allowed to trade with the rest of the world since Apartheid ended. The effect of this is that local companies can import manufactured goods for cheaper than what they would pay for locally manufactured goods. And the clothing and textiles industry in South Africa has been pretty hard it by this. So today we take a look at where our clothing and textile imports are coming from
|
|
Is China the biggest supplier of cheap clothing in South Africa
We have all seen the label saying "Made In China" on some item of clothing we wear or bought recently. That is because China has perfected the art of taking raw materials, manufacturing goods cheaply and then exporting it to the rest of the world. Their economic growth over the past two decades have been fueled by their strong positive trade balance with the rest of the world, where they import far less than what they export.
Local clothing and textile firms find it near impossible with the volumes of imported clothes and textiles that come from among others, China and India. And the South African government can't do much to protect local manufacturers of clothing and textiles, as China is South Africa's single biggest trading partner, and levying tariffs on imported clothing and textiles against China could see retaliatory tariff increases against SA goods exported to China. And this is something South Africa's economy cal ill afford right now. The best the government can do is to try and convince South Africans to buy local or "Proudly South African" goods.
Ok so where are our clothing and textile imports from? And is China really the main culprit when it comes to cheap clothing flooding the local market? Or are there other countries that export a lot of clothing and textile items to South Africa?
Local clothing and textile firms find it near impossible with the volumes of imported clothes and textiles that come from among others, China and India. And the South African government can't do much to protect local manufacturers of clothing and textiles, as China is South Africa's single biggest trading partner, and levying tariffs on imported clothing and textiles against China could see retaliatory tariff increases against SA goods exported to China. And this is something South Africa's economy cal ill afford right now. The best the government can do is to try and convince South Africans to buy local or "Proudly South African" goods.
Ok so where are our clothing and textile imports from? And is China really the main culprit when it comes to cheap clothing flooding the local market? Or are there other countries that export a lot of clothing and textile items to South Africa?
Main suppliers of clothing and textiles to South Africa
The list below shows the Top 20 countries from which South Africa imported clothing and textile items during the month of April 2019:
The top 20 countries above contributed 96.5% to the total value of clothing and textile imports into South Africa during April 2019. And China on its own contributed 57.75% tot total clothing and textile imports into South Africa. For April 2019, a total of R16.124 billion in clothing and textile items were imported into South Africa. The image below shows a tree map of South African imports from China for April 2019. And Textiles (which includes all forms of clothing) is the 2nd biggest import category from China , behind machinery. So supplying cheap clothing and textiles to South Africa is big business in China
- China: R 9 312 378 903
- Swaziland: R 991 020 915
- Lesotho: R 763 743 560
- VietNam:R 747 786 028
- India: R 674 719 354
- Mauritius: R 648 901 248
- Bangladesh: R 524 419 819
- Madagascar: R 460 948 949
- Italy: R 282 748 259
- Indonesia: R 279 919 853
- Pakistan: R 186 537 999
- Turkey: R 135 702 815
- Cambodia: R 112 705 888
- Botswana: R 73 823 547
- Thailand: R 70 867 080
- United States: R 59 794 487
- Portugal: R 53 841 292
- Taiwan: R 52 223 293
- Tanzania:R 49 152 968
- United Kingdom: R 42 001 080
- Zimbabwe: R 41 465 301
The top 20 countries above contributed 96.5% to the total value of clothing and textile imports into South Africa during April 2019. And China on its own contributed 57.75% tot total clothing and textile imports into South Africa. For April 2019, a total of R16.124 billion in clothing and textile items were imported into South Africa. The image below shows a tree map of South African imports from China for April 2019. And Textiles (which includes all forms of clothing) is the 2nd biggest import category from China , behind machinery. So supplying cheap clothing and textiles to South Africa is big business in China
Tree map of South Africa's imports from China during April 2019
The image below shows the tree map of south African imports from Vietnam for April 2019. One immediately notice the similarities in the tree maps between that of China and Vietnam, with both countries exports having very similar structures. Big contributors to China and Vietnam's exports to South Africa include:
- Machinery
- Footwear
- Textiles
- Rubbers and plastics
- Toys and Sports Apparel
Tree map of South Africa's imports from Vietnam during April 2019
While various unions might cry fool regarding clothing and textile imports from countries such as China, Vietnam, India, Bangladesh and the likes, importing these items from these countries might be bad for the local clothing and textile manufacturing industry but it has it's benefits too. The prices paid on clothing items tend to become cheaper or doesn't rise at a very fast rate. Basically the inflation rate of clothing and textile items are limited or contained due to the tough competition world wide to supply cheap textiles and clothing. If one country becomes to expensive, firms just go to another and import cheaper clothing and textiles from there. So let's take a look at the import inflation rate of clothing and footwear as well as the consumer inflation rate for clothing and footwear items in South Africa. the line chart below shows the year on year percentage change for clothing and footwear imports (as measured by Unit Value indices published by Statistics South Africa) as well as clothing and footwear prices paid by consumers (as measured by the Consumer Price Index published by Statistics South Africa)
Readers should note the two lines are drawn on two different value axis. The consumer price index movement for clothing and footwear is measured on the left hand axis, while the import prices for clothing and footwear is measured on the right hand axis. What is immediately clear is while the trends are fairly similar between the import prices and the consumer prices for clothing and footwear, the scale and magnitude of price movements between the two are significantly different. While import prices vary far more in terms of price increases and decreases, the price movements experienced by consumers are far less volatile. In the end the volatile prices paid for imports of clothing and footwear it tends to even and smooth out over time, and luckily for South African consumers they dont have to deal with extremely volatile price movements every month. The average annual price change for clothing and footwear items since January 2011 are as follows:
The average headline inflation, the official inflation rate of South Africa during this period was 5.4%. So clothing and footwear inflation on average has been a lot lower than the official inflation rate of South Africa. So while cheap imports has certain negative effects on South Africa's economy, it should be remembered that not all trade is bad, and there are certain benefits to trade and globalization.
- Consumer Prices Inflation for clothing and footwear: 3.6%
- Import Prices Inflation for clothing and footwear: 7.8%
The average headline inflation, the official inflation rate of South Africa during this period was 5.4%. So clothing and footwear inflation on average has been a lot lower than the official inflation rate of South Africa. So while cheap imports has certain negative effects on South Africa's economy, it should be remembered that not all trade is bad, and there are certain benefits to trade and globalization.