Aberdare Cables, Rhomberg Electronics, Consani Engineering are all suffering because of the Chinese ‘tsunami’. But this is only a tiny part of the story. Look at the graph of imports from China. Follow the green lines that climb to the top of the graph that show imports of machinery and equipment and television, radio and communication equipment.
Many more companies than these three are hard-hit by Chinese imports.
Now look at the red lines that show the exports of basic metals and non-ferrous metals to China. They too are climbing and show boom times for the Mittal Steels and Columbus.
But take a step back and understand the picture behind these statistics.
Steel rolls off the line at Mittal Steel (Iscor) Vanderbijlpark. Mittal Steel then exports it to China. A Chinese company buys it to make boilers. It exports these to South Africa, cheaper than local producer, Consani Engineering can manufacture. Consani closes its doors, 400 workers lose their jobs.
Downstream manufacturers like Consani and Cadac have long complained that it is cheaper to buy South African steel from Mittal Steel outside of South Africa. Now the trade and industry minister, Mandisa Mpahlwa, has promised to submit a proposal to government in the next month that could phase out import parity pricing. This he says is what is making prices of steel in South Africa, “very, very high”.
Be on the lookout
Until then, Cosatu’s Tanya van Meelis advises workers that there could be other ways to protect jobs at your company from imports. Be on the lookout for signs that your company is battling against imports. Perhaps your sales are slowing down, the inventory is building up and production is affected.
Under current world trade laws, if there is a massive increase in imports, companies can apply for safeguard measures to protect them from these imports. These impose restrictions on the numbers of a particular type of imported goods or the value of the goods. This is the route that textile union, Sactwu has used.
Another measure is to check whether the imported goods are side-stepping tariffs. For example, if there is a tariff on spades with a spade width of 200mm or more, sometimes companies will import spades with a spade width of 198mm on which there is no tariff.
So don’t just be vigilant in your company. Go to warehouses and stores that sell equipment that your company makes. Are those goods from outside the country? Could they be avoiding tariffs by making the goods slightly different from yours? If you are worried by what you see, contact your organiser.