International Perspective: Chinese Textile Enterprises Encounter Bottlenecks In South Africa'S Development

At noon, the workers came out of the factory in twos and threes and crowded to the shop at the gate to buy lunch.

A sausage mixed with rice, with an apple or a bottle of coke, is simple and affordable.

This is China in the old industrial area of Newcastle City, South Africa.

A daily scene outside the main gate.

Little store owner chill sells fruit drinks and other daily necessities, sells breakfast and lunch, and keeps two children on this shop.

Outside this Chinese factory, there are 5 similar shops.

Chinese enterprises increase --

Solve local 1/3 employment

This is only an indirect contribution of Chinese textile enterprises to local development.

Albert, director of the economic development committee of Newcastle City, told reporters that Newcastle was the textile capital of South Africa and the famous Chinese Textile City in South Africa. The largest single investment group in the city came from China. China invested more than 1 billion rand (US $1 or about 8.5 Rand) here, with more than 120 enterprises, of which textile enterprises occupied half of the country.

Turning to the contribution of Chinese textile enterprises to the region, Albert said that the unemployment rate in Newcastle City is as high as 60%. At present, these textile enterprises employ more than 7000 locals, reaching 13 thousand people in the rush hour, accounting for 1/3 of the total number of industrial employment in Newcastle, and paying 4 million Rand a month, accounting for 1/10 of local taxes.

Albert made an account to our reporter: according to the calculation of 5 to 8 people from 1 local staff, Chinese textile enterprises now feed 30 thousand to 50 thousand local people.

Newcastle is currently home to more than 2000 Chinese, mostly factory owners, traders and shopkeepers.

More than half of the old industrial districts in Newcastle are responsible by the Chinese, and most of the factories on the yellow street of the motor Denni new industrial area outside the city are leased to the Chinese.

High cost --

Enterprises are facing the choice of leaving and leaving.

However, these Chinese textile enterprises that have brought prosperity to Newcastle City are facing serious difficulties at the moment. The way out for them is either to change careers or to move to neighboring countries or to upgrade or wait for bankruptcy.

The reasons for these problems are manifold.

First, the overall decline of South African textile industry.

Paruk, President of the Federation of South African clothing and textile enterprises, said that the number of employed personnel in the South African garment and textile industry dropped from 200 thousand a few years ago to 56 thousand in 2011.

The rise in labor costs has led to a gradual reduction in corporate profits.

Yan Ronghua, President of the Newcastle textile and garment industry association, told reporters that the wages of a lathe worker had risen from 50 Rand in 2000 to the current 400 Rand, but

There is no change in the price. A child's wear is still only 2.5 Rand.

The little lady who opened her own factory and now works as a part-time worker told this reporter that South Africa is not allowed to implement piecework wage in the implementation of hourly wage, which is not conducive to improving staff's enthusiasm and productivity.

Followed by frequent labor disputes.

In 2008, the South African Trade Union and labor collective bargaining Committee entered the city of Newcastle and raised wages by leading workers to strike.

Chinese textile enterprises have also seen collective strikes and other incidents.

Just a few days after the reporter interviewed, the trade union is planning a new round of strikes.

The three is the vicious competition among Chinese enterprises.

Yan Ronghua said that the preferential policies of the local government were many, and the rent of factories, the cost of labor and the price of gasoline were very low. Moreover, the Chinese people could bear hardships and hardships, so the order of Chinese textile enterprises continued to develop rapidly.

Seeing this business opportunity, many Chinese come here to open a textile mill.

In order to compete for skilled workers, Chinese enterprises are getting a pay rise.

In order to get orders, they fight price wars.

In addition, the influx of imported textiles and the fierce competition in South Africa's local textile industry have aggravated the plight of Chinese textile enterprises.

Adjust measures to local conditions

It can achieve rapid development.

Regarding the future development of Chinese textile enterprises in Newcastle City, Yan Ronghua believes that although there are many unfavorable factors, South Africa is still full of business opportunities.

If Chinese textile enterprises want to have a foothold here, they can no longer have a speculative mentality and a gold rush mentality.

China's textile enterprises should strengthen industry standards, industry self-discipline and industry ethics construction, strengthen communication and integration with local authorities, upgrade their own quality, benefit from internal management and technological upgrading, and increase market research.

South African Chinese textile city provides experience for Chinese textile enterprises to invest in Africa.

At present, African sub regional organizations are formulating relevant industry development policies, offering tariff preferences and promoting trade between members of the organization.

These sub regional organizations also enjoy preferential duties such as tariff free and import quotas specified in the US African Growth and Opportunity Act and the relevant EU regulations.

It also provides a good platform for Chinese textile enterprises to enter the US and EU markets.

However, the situation in Africa is different from that in other countries. For example, the cotton producing countries need deep processing technology in Zambia, Ethiopia can set up factories and open stores, but foreigners are not allowed to engage in foreign trade.

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In addition, the level of development in different regions is different, and the technologies required are also different.

Therefore, China's textile enterprises should invest in Africa according to local conditions.