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Chinese textile enterprises encounter developing bottlenecks in south africa

Chinese textile enterprises encounter developing bottlenecks in south africa Source:
Date: 02-11-2012
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Chinese textile mills in the old industrial region of Newcastle city in South African have invested more than 1 billion Rand (1 U.S. dollar equals 8.5 Rand) in the area, there are more than 120 enterprises, of which, more than 50 percent are textile enterprises.

The unemployment rate of Newcastle City is as high as 60 percent, now these textile enterprises employ more than 7,000 local people, the employment was up to 13,000 people during the peak period, accounting for 1/3 of the total industrial employment in Newcastle City,the tax paid per month is up to 4 million Rand, accounting for 1/10 of local taxes. Chinese textile enterprises currently feed 30000-50000 of local people, based on that a local staff feeds 5-8 people. There are more than 2,000 Chinese people living in Newcastle City, most of them are factory owners, traders and shopkeepers.

However, these Chinese textile enterprises once brought prosperity to Newcastle City now face serious difficulties, they have to make changes or relocate to neighboring countries, or transform and upgrade, or wait for collapse.

The reasons causing the problem mentioned above are multifaceted. First, the textile industry in South Africa has overall declines. The employment of apparel and textile industry in South Africa has declined from 200,000 a few years ago to 56,000 in 2011. Rising labor costs lead to a narrowing of corporate profits.

Second, there are frequent labor disputes. Third, there is vicious competition among Chinese companies. In addition, the influx of imported textiles and fierce competition of local textile industry in South Africa have exacerbated the plight of Chinese textile enterprises.

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