sector
7 September 2006
The issue of the impact of Chinese imports on the local clothing and textile
sector has been a matter which has grabbed the attention of the general public
for some time now. In an effort to assist this sector, government has been
actively working with labour and industry to find sustainable solutions to the
woes the sector is facing, including engaging on issues related to
competitiveness, skills and technology. In this regard the Customised Sector
Programme for this sector has been developed with the participation of labour,
manufacturers and retailers as a map for charting the sector's
regeneration.
In line with regeneration initiatives, government acknowledged that
short-term relief, particularly from the surge in imports from China, would be
important in offering a window of opportunity for industry to transform itself.
It is therefore in response to an official application launched by labour and
supported by manufacturers, that government initiated import limitation
discussions with China. The result has been the Memorandum of Understanding
(MoU) with China, which was initiated in June 2006 during the Chinese Premier's
visit and signed into force on 28 August 2006. The MoU allows for import
restrictions in 31 product categories till 31 December 2008.
It must be stated that government's trade policies have consistently been
geared towards integration with the global economy and it has adopted
considered and systematic trade liberalisation policies in support of this.
These policies have been instrumental in the significant growth seen in our
international trade, which has also been reflected in this sector. Aggregate
published profits of the top 5 clothing retailers have grown from R1,7 billion
in 2002 to R6,6 billion in 2006, partly attributable to increased sourcing from
markets such as China. During the same period though our domestic manufacturers
have seen substantial decline and experienced severe job-losses.
As a government which is committed to economic transformation and
development of our country, as well as growth of this particular sector, we
believe that the current situation is not tenable. It would be
counter-productive for the country's development if certain segments of the
sector experience record profits, whilst other segments were experiencing
severe decline. In this regard government believes in balanced and sustainable
growth in the sector, which will require support and sacrifice of government,
labour and all segments of industry in order to succeed. It is within this
framework that government have pursued import restrictions in the 31 categories
of imports from China and which should inform the current debate on this
matter.
Today's engagement in Cape Town with labour, manufacturers and retailers
were aimed at soliciting practical comments on issues relating to the
implementation and impact of these quotas. In the meeting, comments of all
parties have been taken on board and will be placed before the Minister of
Trade and Industry, Mr Mandisi Mpahlwa, for his early assessment on this
matter. It must be noted that these restrictions only limit and not completely
halt certain imports from China. In light of this, government's view is that
these imports will not be to the detriment of retailers and importers to the
degree that is generally being reported and could contribute to the
regeneration of manufacturing in this sector.
Enquiries:
Henriette van der Merwe
Tel: (012) 394 1640
Cell: 082 572 8184
Bongani Lukhele
Tel: (012) 394 1643
Cell: 083 291 8689
Bethuel Mnguni
Tel: (012) 394 1647
Cell: 083 624 8888
Donavan Jacobs
Tel: (012) 394 1641
Cell: 082 751 1078
Please address all your media enquiries to:
mediarelations@thedti.gov.za
Issued by: Department of Trade and Industry
7 September 2006
