Thesis (MBA)--University of Stellenbosch, 2011. / The South African clothing and textile industry has historically benefited from import substitution industrialisation which protected the industry through tariff and non-tariff barriers from foreign competition. Factors such as the impact of globalisation, our accession to the World Trade Organisation and the associated effects on trade liberalisation changed South Africa‟s trade policy to move towards export lead growth at the threshold of South Africa‟s democracy, which paved the way for increased imports from foreign countries. The opening up of the South African economy to foreign competition negatively impacted on the competitiveness of these industries. The clothing and textile industry has been plagued by various challenges, amongst others, cheap imports especially from China (often illegal), South Africa‟s accelerated tariff reduction programme and currency fluctuations (especially the appreciation of the Rand), which culminated in factory closures and huge job losses. South Africa has since 1994 developed unstructured and uncoordinated sectoral responses to these challenges in the absence of a comprehensive industrial policy. The government‟s response to deal with the challenges facing the clothing and textile industry was to re-impose protectionist measures via import quotas on certain categories of products from China. These measures were intended to protect the industry and provide it with breathing space to reposition itself and regain its competitiveness, retain existing jobs and create additional jobs. The quest to regain global competitiveness should be founded on a combination of measures (e.g. the legislative and institutional environment, infrastructure, skilled workforce, innovation and networking) designed to satisfy consumer tastes and preferences that aims to improve the potential for growth in the medium to long-term. The objective of this research report was to assess whether the introduction of import quotas on Chinese goods positively contributed to the South African clothing and textile industry in regaining a measure of competitiveness and growth. The basis of the study is informed by a series of personal interviews with the key industry stakeholders which focused on examining the state of the industry, especially the impact of import quotas of certain categories of Chinese goods. The results revealed that the impact of import quotas on Chinese goods failed to provide any significant benefits to the clothing and textile industry since: (i) although there was a reduction in imports from China into South Africa in the quota categories, importers merely sourced their products from other low cost countries (e.g. Pakistan, Vietnam, Mauritius); (ii) there was no significant increase in local output and purchases; and (iii) there was no significant reduction in the number of jobs lost and none created during this period. These results although supported by business and other academic literature are contested by both labour and government. One conclusion was that a comprehensive approach should be pursued to arrest the challenges faced by the clothing and textile industry to reposition itself within the global environment to regain its competitiveness. This requires the active participation of all industry stakeholders and the implementation of appropriate strategies and tactics which is sequenced and coordinated to enhance their collective outcomes.

Thesis (MBA (Business Management))--University of Stellenbosch, 2009. / ENGLISH ABSTRACT: This report is an evaluation of the impact of the quotas imposed on clothing and textiles imported from China on the clothing and textile manufacturing industry in South Africa. On 28 August 2006 the Government of the Republic of South Africa and the Government of the People’s Republic of China concluded a memorandum in terms of which the export of certain tariff lines of the Chinese textile products to South Africa would be administered in accordance with the volumes specified in the memorandum for a period of two years. The fundamental objective of these import quotas was to provide South African clothing and textile firms the space in which to operate, with the aim of improving competitiveness in domestic and export markets in the long run. The Chinese market-share of South African global clothing imports has risen steadily to the mid-2006 level of just under 75 percent. It was claimed that because of the significant growth in imports from China between 63 000 to 67 000 jobs were lost in the domestic clothing and textile industry from March 2003 to September 2006. The effect of the imposition of the quotas is evaluated by comparing the state of the clothing and textile industry in South Africa prior to 2006, that is pre-quota imposition to the state of the industry up to two years after imposition of the quotas. Reference is made to employment in the clothing and textile industry in South Africa, the size of the industry in South Africa, the position of clothing retailers, labour costs and productivity, as well as the competitiveness of the local clothing and textile industry. The comparison shows that the import quotas did not solve the industry’s woes and that the trends prior to the imposition of the quotas continued. It further shows that the imposition of quotas had a detrimental effect on the welfare of consumers in the country. A change of tack for the industry’s policy makers and businesses is proposed. / AFRIKAANSE OPSOMMING: Die verslag is ‘n evaluering van die impak van kwotas ingestel op die invoer van klerasie en tekstiele vanuit China op die Suid Afrikaanse klerasie- en tekstiel-bedryf. Op 28 Augustus 2006 het die regerings van Suid-Afrika en China ‘n memorandum onderteken ingevolge waarvan die uitvoer van sekere Chinese tekstiel-tarieflyne na Suid-Afrika vir ‘n tydperk van twee jaar beperk sou word tot volumes gespesifiseer in die memorandum. Die doel van hierdie kwotas was om aan Suid Afrikaanse klerasie- en tekstiel-ondernemings die ruimte te skep om handel te dryf en sodoende hul mededingendheid in beide die plaaslike- en uitvoermarkte te verbeter. Die Chinese markaandeel van Suid-Afrikaanse klere-invoere het geleidelik gestyg tot net onder 75 persent in die middel van 2006. Arbeids-organisasies het aangevoer dat die aansienlike toename in invoere van China daartoe gelei het dat tussen 63 000 en 67 000 werksgeleenthede verlore gegaan het in die plaaslike klerasie- en tekstiel-bedryf vanaf Maart 2003 tot September 2006. Die effek van die kwota-instelling word geëvalueer deur die stand van die Suid-Afrikaanse klerasie- en tekstiel-bedryf voor 2006 - dit wil sê voor die instelling van die kwotas - te vergelyk met die stand van die bedryf vir ‘n tydperk van twee jaar ná die instelling van die kwotas. Verwysings word gemaak na die vlak van indiensneming in die Suid Afrikaanse klerasie- en tekstiel-bedryf, die grootte van die plaaslike bedryf, die posisie van klere-kleinhandelaars, arbeidskoste en produktiwiteit, asook die mededingendheid van die plaaslike bedryf. Die vergelyking toon dat die invoer-kwotas nie die bedryf verbeter het nie en dat tendense aanwesig voor die instelling van die kwotas steeds voortduur. Bowendien toon dit dat die instelling van die kwotas ‘n nadelige invloed gehad het op die welvaart van Suid-Afrikaanse verbuikers. ‘n Koersverandering vir die bedryf se beleidmakers en besighede word voorgestel.