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Over the past 15 years, the local manufacturing sector has faced some of the toughest headwinds.
Since 2005, imports from China to South Africa have grown by more than 500%, while at the
same time imports from China into the Western Cape have grown more than 440%. Chinese
imports have been driven primarily by price differentials, mainly through labour-price arbitrage.
Local manufacturing industries, such as clothing and textiles, were severely affected by this.
While demand for clothing and textiles grew markedly, thousands of jobs were lost, particularly
in the provincial clothing and textile industry as dozens of popular firms either had to close doors
or shifted from manufacturing products locally to importing clothing-related goods from China.
Figure 16 Chinese Imports to South Africa and the Western Cape
250 000 000 000 35 000 000 000
30 000 000 000
200 000 000 000
25 000 000 000
150 000 000 000
20 000 000 000
15 000 000 000
100 000 000 000
10 000 000 000
50 000 000 000
5 000 000 000 PROVINCIAL OUTLOOK NATIONAL OUTLOOK GLOBAL OUTLOOK GAP HOUSING INVESTOR NARRATIVE SPOT THE OPPORTUNITY PORTFOLIO INSIGHTS KHULISA NEWSLETTER ELECTRIC VEHICLES ENERGY SECURITY LOOKING AT GDP
0 0
Western Cape (RHS) South Africa (LHS)
Source: IHS
Since 2005, the local clothing and textile sector grew by more than 27% nationally and 21%
provincially (the markup between import and sales prices contribute to sector growth). During
the same period, the sector realised a 16% contraction of jobs nationally and 18% provincially.
The primary reason for job losses has been the increase in imports, predominantly from Asian
countries.
The figure below illustrates the growth in imports of men’s shirts from China and the rest of the
world over the last 10 years. This serves as a proxy for the growth in clothing and textile imports
from China. Since 2005, imports of men’s shirts grew from just over R151 million to R709 million.
Chinese imports of men’s shirts contributes more than 30% of all said imports.
QUARTERLY ECONOMIC BULLETIN 2016 49
