SA’s steel-making industry is grinding not so slowly to a halt, amid industry screams of complaint about cheap Chinese imports. The country’s second largest steel maker, Evraz Highveld, is at a complete standstill, while our biggest, Arcelor Mittal, is described as being “in a profound crisis”. So much so that its top man, Lakshmi Mittal, has reportedly visited SA to plead with President Jacob Zuma for import protection, at the same time as Arcelor announced it was mothballing its Vereeniging long-products mill.
And cheap Chinese imports have now been a decade-long pressure on products manufactured in SA, according to a study by the Southern Africa Labour Development and Research Unit, with findings from 44 manufacturing industries. And the results were proof of just how these cheap imports have created relatively slow growth in output, loss of profits and a decline in employment in the SA manufacturing industry. As far as job losses are concerned, this slow growth has also reduced the number of jobs available. The research showed that, towards the end of the 10-year period, increased Chinese imports reduced employment by more than 75 000 jobs, while it cost the SA manufacturing industries R30 million over the 10-year period. The products highlighted as SA’s main losers were textiles and clothing, footwear and leather goods, electrical and electronic products and machinery – and the latest, steel products. And this situation has hit not only SA, but also other countries in sub- Saharan Africa into which cheap Chinese imports have f lowed. One press report revealed that a Consultancy Africa Intelligence study showed that China’s dominant position in the textile and clothing market, for example, had forced several African manufacturers in the seven countries under the microscope to shut their doors. This, the study added, meant the loss of 37% of domestic production capacity, and some 250 000 jobs. And, with similar pressures on SA manufacturing of a wide variety of products, the International Trade Administration Commission (Itac) has noted that anti-dumping applications have been increasing for a wide range of products. It also confirmed that most of the determinations last year were in the steel and construction industry. And Itac has found that there have been a large number of cases where China has been found guilty of dumping in SA – undercutting its prices in the Southern African Customs Union (Sacu) region by enormous amounts.