Study Of Quotas In South African Textile Industry

The current question on most peoples lips within South Africa's clothing industry is will the Department of Trade and Industry (DTI) extend the quotas on Chinese apparel and textiles that are due to end this year? However, I feel extension or no extension will make very little difference to the economics of this industry sector. Admittedly, if the quotas do end we may see a sudden influx of imports from China as they offer price incentives to our clothing importers in order to recapture market share.


The China syndrome that has dominated the discourse of South Africa's apparel sector is no longer as relevant as it was in the past. The bigger threat to South Africa's textile and apparel sector is the industry itself and the South African government.


China itself is facing major competition from its Asian neighbours such as: Vietnam, Bangladesh, Cambodia and Indonesia. For the most part I doubt South African retailers will hurriedly relocate their procurement of apparel from China should the quotas be lifted. The cost of doing business in China has risen; there are stricter labour regulations as China continues to change its global image of being one big sweatshop.


With consumer spending down and an exchange rate that continues to fluctuate I feel the industry is facing further factory closures and retrenchments. The one positive scenario is the possibility of SA retailers placing more orders with local manufacturers because of the currency fluctuations however; retailers may initiate a price conflict between the manufacturers.