Full year analysis reveals impact of Chinese quotas on import flows

ALTHOUGH THE traffic in
China’s textile and clothing
export items selected for
a quota system last year
by the SA authorities has
tumbled – alternative cutprice
source countries have
helped to fill the gap.
According to Taku
Fundira, a researcher at
the Southern African Trade
Law Centre (tralac), a full
year analysis of trade flows
between SA and China, and
the impact of the quotas,
has been conducted.
“It revealed that SA
global imports in the
textile/clothing quota lines
declined by 22% – from
R9.131-billion to R7.102-bn
during 2007,” he said. “The
imports of these lines from
China, however, declined by
48% – from R7.155-bn to
R3.714-bn.”
The analysis therefore
calculated that the Chinese
market share in quota lines
had declined from 78.4% to
52.3% over the year.
Also, said Fundira,
Chinese exports of all goods
into SA increased by 29%
to R60.3-bn during 2007 –
and this meant that quota
lines declined from 15.3%
of total Chinese exports
into SA in 2006 to a much
lower 6.2% in 2007.
But the study found
that other sources were
now compensating about
R1.412-bn of the shortfall
in imports of the quota
items from China in 2007
– with the main sources
being Hong Kong (R377-
million), India (R374-m),
Indonesia (R213-m),
Pakistan (R207-m) and
Mauritius (R206-m).
“The largest increases
in imports by value in
quota lines were from
Hong Kong, Indonesia and
Malaysia,” said Fundira.
“In percentage terms the
increase from Malaysia was
massive, while the increases
from Myanmar, Sri Lanka,
Vietnam and Madagascar
were also all substantial.”
And, while the analysis
found that the quotas had
indeed significantly reduced
imports from China (in
value terms), Fundira posed
two questions.
“Does this evidence
suggest that the quota
imposition on China was a
sensible measure to quell
the rise in Chinese imports
and thus offer some
protection to the local
industry?
“And could/should
the authorities not have
anticipated an increase in
imports in the quota lines
from alternative sources?”