Clothing and textile sector post-Chinese quotas

This research paper examines the decline of South Africa's clothing and textile sector following the end of the Multi Fibre Agreement (MFA) in 2004 and the subsequent rise of Chinese exports. It argues that while imports from China have caused significant job losses, the sector's primary failure is a lack of competitiveness due to high labour costs, low productivity, and rigid labour markets. The author suggests that further trade protection is unlikely to be effective and instead advocates for non-trade industrial policy tools, such as skills and capital upgrades, and a strategic shift toward high-end niche products.

• The end of the Multi Fibre Agreement (MFA) in 2004 allowed Asian countries, specifically China, to export directly to developed markets, increasing competitive pressures. China's share of global clothing exports rose from 18 percent in 2000 to 34 percent in 2007.
• In South Africa, imports of clothing and textiles from China grew from 16.1 percent of total imports in 1996 to 60.7 percent in 2008. This trend contributed to the loss of 69,000 jobs in the sector over six years, representing a 39 percent decrease.
• South Africa's lack of competitiveness is driven by labour costs that are nearly double those in Asia, a lack of necessary skills and technology, and rigidities from a highly unionised workforce. Additionally, the local industry cannot match the short and reliable delivery times of Asian competitors.
• Attempts to protect the industry via quotas on Chinese imports between 2007 and 2008 failed to reduce total imports or stimulate private investment, as retailers shifted sourcing to other low-cost Asian producers including Bangladesh, Vietnam, and Malaysia.
• The author argues that further trade protection, such as raising tariffs to bound levels, would be self-defeating. Instead, the paper recommends non-trade industrial policy tools, including flexible loans for working capital and skills development programmes, as well as diversifying into high-end niche products for export.

APA

South African Institute of International Affairs (2009). Clothing and textile sector post-Chinese quotas. https://saiia.org.za/research/sas-clothing-and-textile-sector-post-chinese-quotas/

Chicago

South African Institute of International Affairs. Clothing and textile sector post-Chinese quotas. 2009. https://saiia.org.za/research/sas-clothing-and-textile-sector-post-chinese-quotas/.

Wikipedia

{{cite report |author=South African Institute of International Affairs |title=Clothing and textile sector post-Chinese quotas |date=21 August 2009 |url=https://saiia.org.za/research/sas-clothing-and-textile-sector-post-chinese-quotas/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{southafricaninstituteofinternationalaffairs2009clothing, author = {{South African Institute of International Affairs}}, title = {{Clothing and textile sector post-Chinese quotas}}, institution = {South African Institute of International Affairs}, year = {2009}, month = aug, url = {https://saiia.org.za/research/sas-clothing-and-textile-sector-post-chinese-quotas/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }