- The Washington Times - Sunday, May 6, 2007

JOHANNESBURG — The poor in rural Africa have for years cooked their meals of stew and cornmeal porridge over open wood fires in three-legged cast-iron pots that are made in South Africa and sell for about $55.

Recently, however, a foundry in Shanghai has begun shipping its version of the pots to Africa, where even after shipping and import duties, they can be purchased for as little as $15.

The trend — repeated on product after product and in country after country across Africa — has been a huge boon for the continent’s poor, many of whom are now able to afford consumer products that previously were beyond their reach.

But it has delivered a body blow to an already weak manufacturing sector, eliminating jobs and forcing companies like one Johannesburg cooking-pot maker to consider making its products abroad.

South Africa alone has lost 70,000 jobs in the apparel sector over the past four years because of imports from low-cost Asian producers, said Rudi Dicks, co-coordinator of the Congress of South African Trade Unions.

“Thousands of jobs have also been shed” in South Africa’s electronics sector because of the cheap imports, Mr. Dicks told The Washington Times during a recent visit to Geneva.

South African government figures show China has eclipsed the United States to become the nation’s second-largest source of imports, and could take top place from Germany as early as next year.

The Department of Trade and Industry in Pretoria, South Africa, says imports from China almost tripled from $2.4 billion in 2003 to $6.7 billion last year. Garment sales increased by 81 percent last year alone, according to estimates by the World Trade Organization.

Ebrahim Patel, general-secretary of the Southern African Clothing and Textile Workers Union (SACTWU), calculates that every African breadwinner supports an average of six persons.

That means the 70,000 textile jobs lost in South Africa are affecting almost half a million people in a country already suffering from high unemployment, he said.

His remarks reflect a growing concern across Africa, from Kenya to Nigeria, Lesotho, Namibia, Madagascar and even Mauritius, which is a major exporter in its own right.

A recent U.N. report found that Chinese companies are present in 48 African countries and that annual trade with Africa, now $56 billion, has grown fivefold since 2000.

In South Africa, the government has imposed quotas on textile imports and passed new legislation requiring all retailers to mark products with the country of origin.

But several consignments of goods have been seized at the coastal city of Durban, where Chinese products have arrived with labels declaring them as made in South Africa.

Daniel Torres, an industry consultant, said the problem is exacerbated in countries such as Kenya by “dumping,” a process in which companies sell goods at less than the cost of making them in order to build market share.

Kenyan manufacturers complain that clothes from China are being sold for less than what it costs the African factories to buy the fabric, said Mr. Torres, who described dumping as “a very big problem.”

Other trade diplomats in Geneva said Africa is particularly vulnerable to dumping because of widespread corruption by customs and border officials and weak monitoring systems.

But sometimes it is simply a matter of quality.

Chrystino Nna, who owns a small roadside carpet store in Port Harcourt, Nigeria, said he only deals in Chinese carpets because his customers know they are better and cheaper than anything produced locally.

“Nigeria isn’t known for its carpets. People prefer the Chinese kind because they know the quality is better,” he said, adding that his customers often ask whether his carpets were made overseas or locally.

“Even if it means spending more, they will,” he said.

African manufacturers enjoy the same benefits of low labor costs as their Chinese counterparts, but analysts say Asian manufacturers can take advantage of state-of-the-art technologies, better logistics and more-efficient sourcing.

While Chinese companies pour large amounts of money into facility upgrades, African companies lag far behind in the ability to invest in their plants, these analysts say.

“Added to this, [Chinese] workers are more productive and management is a much flatter structure, whereas here our executives are paid a lot more and enjoy perks such as travel and luxury cars, all at the firm’s expense,” said Peter Draper, an economic analyst with the South African Institute of International Affairs.

In the long run, Mr. Draper argued, Chinese imports will strengthen manufacturing in Africa by forcing firms to be more competitive. But either way, he said, it is a reality that Africa has to confront.

At SACTWU, Mr. Patel was not convinced.

“We acknowledge the reality of global markets,” he said, “but when one trading partner like China floods the other with cheap imports, the legitimacy of the trading system is called into question.”

• John Zarocostas in Geneva and Carmen Gentile in Port Harcourt, Nigeria, contributed to this article.

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