Page 1 of 2 12 LastLast
Results 1 to 10 of 18

Thread: The good and bad of globalisation.

Hybrid View

Previous Post Previous Post   Next Post Next Post
  1. #1
    Site Caretaker Dave A's Avatar
    Join Date
    May 2006
    Location
    Durban, South Africa
    Posts
    22,649
    Thanks
    3,305
    Thanked 2,676 Times in 2,257 Posts
    Blog Entries
    12

    The good and bad of globalisation.

    This story on M&G deals with the Chinese clothing import issue. But essentially it highlights the dilemma faced with globalisation issues.

    An agreement to limit Chinese clothing and textile imports has brought mixed reaction, with labour in the textile industry welcoming the opportunity to rebuild the industry and the Democratic Alliance (DA) saying it will bring price increases.

    The opposition party said it will ask the minister of trade and industry whether concerns of the clothing and textile retail industry were considered, as well as the implications for consumers and employment.

    The South African Clothing and Textile Workers' Union (Sactwu) said on Monday that 55 000 new jobs could be created.

    "We need to use the space created to ensure we make our factories state-of-the-art and improve training of workers on a scale that will develop South Africa into a world-class producer," said general secretary Ebrahim Patel.

    "Over the past four years, the local fashion-manufacturing industry has lost approximately 67 000 jobs, largely as a result of a surge of imports from China," said Patel. "Over the same period, the five big retailers have recorded R18,1-billion in pre-tax profits. It is now time for retailers to work with the local manufacturing industry to place the country and employment before profits."

    He said the vast volumes of imports from China have had a devastating impact, with factory closures in the poorest parts of the country such as Dimbaza in the Eastern Cape, which have become industrial ghost towns.
    On the one hand we have the effect on local employment. On the other we have the lower cost of goods to consumer.

    I note there is no similar move on electronic goods.

  2. #2
    just me duncan drennan's Avatar
    Join Date
    Jun 2006
    Location
    Cape Town
    Posts
    2,642
    Thanks
    119
    Thanked 94 Times in 77 Posts
    Since I saw the story on the news, I've been wondering if this approach makes sense at all.

    Firstly, cheap imports don't only come from China - places like Vietnam also export clothing at low prices (so where will the buyers start looking?)

    Then after that, what happens at the end of those two years (I think the agreement is for two years) - is it really possible to setup an industry that can compete with China on price, and more importantly should we really be trying?

    There are a number of items working against SA in this particular regard, including, strict labour laws, BEE and AA issues. I would say we have two years to reform the labour market (haha) if there is even hope of competing with China.

    I suppose the question that I'm asking here, and that applies to just about everyone's business (in the world), is - can we really compete with China?

    I think it is possible, BUT we have to change the rules to favour us, exploit our strengths and their weaknesses. This requires a whole new way of thinking, not a two year trade restriction.
    [SIGPIC]Engineer Simplicity[/SIGPIC]
    Turn ideas into products | The Art of Engineering blog

  3. #3
    Site Caretaker Dave A's Avatar
    Join Date
    May 2006
    Location
    Durban, South Africa
    Posts
    22,649
    Thanks
    3,305
    Thanked 2,676 Times in 2,257 Posts
    Blog Entries
    12
    Quote Originally Posted by dsd View Post
    I suppose the question that I'm asking here, and that applies to just about everyone's business (in the world), is - can we really compete with China?
    There was a time when we were saying the same thing about Japan.

  4. #4
    just me duncan drennan's Avatar
    Join Date
    Jun 2006
    Location
    Cape Town
    Posts
    2,642
    Thanks
    119
    Thanked 94 Times in 77 Posts
    Quote Originally Posted by Dave A View Post
    There was a time when we were saying the same thing about Japan.
    I don't really know the history behind this - care to elaborate?
    [SIGPIC]Engineer Simplicity[/SIGPIC]
    Turn ideas into products | The Art of Engineering blog

  5. #5
    Site Caretaker Dave A's Avatar
    Join Date
    May 2006
    Location
    Durban, South Africa
    Posts
    22,649
    Thanks
    3,305
    Thanked 2,676 Times in 2,257 Posts
    Blog Entries
    12
    It was a concern in the '70s and '80s.

    It was probably most evident in the car industry. Japan could produce a car far cheaper than anybody in the West. In time the situation stabilised to what we see today.

    There was a similar run in computers. IBM produced the original PC, Japan started producing copies at a third of the price and flooded the market.

    At first Japan was accused of producing cheap copies, then good copies, and now they're pretty innovative. The same causes were declared as we see with China today - cheap skilled labour and a lack of respect for copyright and patents.

    Now we have Toyota's costing more than Ford's (and holding their value better too), but for quite a while they were substantially cheaper.

    The thing is China has a far greater size and therefor potential impact.

  6. #6
    just me duncan drennan's Avatar
    Join Date
    Jun 2006
    Location
    Cape Town
    Posts
    2,642
    Thanks
    119
    Thanked 94 Times in 77 Posts
    [SIGPIC]Engineer Simplicity[/SIGPIC]
    Turn ideas into products | The Art of Engineering blog

  7. #7
    Bronze Member Alan's Avatar
    Join Date
    May 2006
    Posts
    170
    Thanks
    0
    Thanked 28 Times in 21 Posts
    If the labor issue was the main reason behind this move, i seriously doubt if we would be able to compete. The unions resist all attempts at automating the CMT factories, much like the service stations in this country. With the productivity of the labor force coupled together with our labor laws i don't see it happening. Sorry if i sound like a bit of a pessimist here.
    Dave giving you age away there, so glad I'm not old enough to remember the 70's.
    Remember the Ark was built by Amateurs and the Titanic was built by professionals.
    Business isn't about how to survive the storm, but how to dance in the rain.

    Marine Aquariums SA

  8. #8
    Full Member
    Join Date
    Jun 2006
    Location
    P.E.
    Posts
    60
    Thanks
    0
    Thanked 0 Times in 0 Posts
    Quote Originally Posted by Alan View Post
    If the labor issue was the main reason behind this move, i seriously doubt if we would be able to compete. The unions resist all attempts at automating the CMT factories, much like the service stations in this country. With the productivity of the labor force coupled together with our labor laws i don't see it happening. Sorry if i sound like a bit of a pessimist here.
    So you are actually saying it is the labour movement and trade union's fault?!

  9. #9
    Full Member AndreMorgenrood's Avatar
    Join Date
    May 2006
    Location
    Umhlanga Rocks
    Posts
    34
    Thanks
    0
    Thanked 0 Times in 0 Posts
    Quote Originally Posted by entoserv View Post
    So you are actually saying it is the labour movement and trade union's fault?!
    I think that is exactly the problem. We could never compete with china head on when it comes to the cost of labour. Automation is the next logical step forward if we want to be competetive but you wont be very popular if you build a large factory but only employ a handful of people to make sure the bearings are oiled.

  10. #10
    just me duncan drennan's Avatar
    Join Date
    Jun 2006
    Location
    Cape Town
    Posts
    2,642
    Thanks
    119
    Thanked 94 Times in 77 Posts
    I liked Tito's comments on this.

    It was possible the large number of goods from India and China were helping to keep inflation low, he continued.

    Mboweni told Parliament last month that the quotas did not make economic sense and would not save an industry that was not competitive.

    "If you have not become competitive, you have no dog's chance in hell of becoming competitive in the three years or so that the quota will be imposed," he told the portfolio committee on finance.



    "I gather [Vavi] says I should not talk about the economy, only monetary policy," Mboweni told the dinner guests.

    "I'll stick to monetary policy if he sticks to union organising."

    Full story on M&G
    It doesn't make sense from Tito's perspective because his sole mandate is to keep inflation low, and the quota's will effectively push inflation up.
    Last edited by Dave A; 31-Oct-06 at 12:01 PM.
    [SIGPIC]Engineer Simplicity[/SIGPIC]
    Turn ideas into products | The Art of Engineering blog

Page 1 of 2 12 LastLast

Tags for this Thread

Did you like this article? Share it with your favourite social network.

Did you like this article? Share it with your favourite social network.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •