Chinese textile 'tsunami' hits Africa and Asia
Beijing (AsiaNews/Agencies) Chinese textiles have hit international markets with a vengeance taking market shares from western manufacturers but also from those in the developing world.
Faced with this textile 'tsunami', many African companies are forced under.
African manufacturers had benefited when the United States opened its domestic market in 2000. Production in Africa soared so much that Asian manufacturers delocalised in countries like Kenya, Madagascar and Swaziland.
In just five years, Lesotho became a major textile manufacturer, with textiles representing 90 per cent of its total export earnings and 31 per cent of African textile exports to the US.
But now all that is disappearing. During the first two weeks of 2005, six plants have shut down with a total job loss of 15,000 with another 10,000 workers put on short term. Unemployment has risen to 40 per cent.
South Africa has lost 30,000 jobs, whilst in Namibia and Swaziland three in every four jobs is expected to be lost by the end of June
Clothing manufacturers in Algeria, Morocco and Tunisia, which have special trading arrangements with Europe, are concerned they might be next.
The Chinese invasion is making waves in parts of Asia as well, in countries like Sri Lanka, Pakistan, Cambodia, and especially in Bangladesh, where textile manufacturing employed up to three million people generating three quarters of its exports.
The International Monetary Fund reports that the abolition of quotas will cost Bangladesh a 7.7 per cent in employment, 29.5 in exports and 4.1 per cent in GDP.
In the European Union, Chinese imports have jumped by 63 per cent (data for 19 of the 25 member states), especially sock and stockings (+5.7 per cent), men's pants (+900 per cent), medical gauze (+ 342 per cent), sweaters (+210 per cent), women's clothes (+111 per cent), thanks to extraordinarily low price.
The situation is not much better in the United States; between January and March of this year, imports from China rose by 62.5 per cent overall, topping 1,521 per cent for cotton pants and 1258 per cent for undershirts.
Concerned about their own manufacturers and job losses, both the US and the EU plan to restrict imports from China by limiting imports to a 7.5 per cent rise (valid till 2008) as provided in the accord that eliminated the pre-existing quota system. However, the EU is divided with some member-states opposed to restrictions.
China objects to foreign protectionism against its exports, arguing that it should not be penalised if its manufacturers are more competitive.
Western analysts also point out that increasing Chinese textile exports not only raise China's GDP but also Chinese imports of high-tech equipment in sectors where the West has an edge; protectionism would reduce such imports. Moreover, many European companies have set up Chinese branch plants, leaving management and R& D in Europe.
According to Cao Xinyu, vice president of China's Chamber of Commerce, 40 per cent of textile companies in China are joint ventures between Chinese and foreigner investors, with domestic private companies representing another 45 per cent and state-owned,13 per cent.
A protectionist policy might also cause a backlash in China itself, especially among those opposed to a complete opening of China's economy to the world.
Squeezed between the Chinese invasion and Western resistance, developing countries are forced to seek regional accords with the EU and the US, at the expense of workers' needs and rights. For instance, in October 2004, Bangladesh announced that it would weaken rules regulating the employment of women workers. In the Philippines, the government plans to exempt the textile industry from minimum wage requirements. In Tunisia, companies are demanding greater flexibility in terms of working hours. (PB)
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