Jitters among Pak manufacturers
KARACHI: Manufacturers have expressed concern over the massive influx of Chinese products in local markets even before the completion of the China-Pakistan Economic Corridor (CPEC).
“It is really Eid for Chinese producers every year while the local industry suffers,” stakeholders said. They cite low prices of Chinese goods which hold a lot of attraction for many Pakistani consumers. However, the consumers are also aware of the lack of quality and durability of Chinese goods, they add.
Many manufacturers that this writer spoke with question the future viability of local industries as the share of Chinese goods will increase once CPEC reaches its apogee, says a report in Dawn.
Chairman Council of All Pakistan Textile Mills Association (CAPTA), Zubair Motiwalla said the share of China in suiting, which was 10 per cent some five years ago, now stands at 25-30pc.
“I think China’s share in suiting will swell to 50-60pc after completion of CPEC,” he said. He feared for the future survival of his industry under such circumstances as the Chinese have “a different style of working” and massive economies of scale for running industries.
A vast price difference exists between Chinese and Pakistani suiting. Giving an example, Mr Zubair said full suiting is available at Rs700 while shirt piece costs Rs300 while Pakistani products of the same type are available for at least Rs1,000-1,200.
He said, shalwar kameez clothes are also arriving from China, holding 5-10pc market share as the local industry is trying hard to compete.
Chairman Traders Association of Marriot Road Mohammad Ahmed Shamsi said toys from China enjoy over 90pc market share which had already resulted in closing down of much of the local industry. Toys worth Rs500-600 million arrive in Karachi alone every year from China.
He said Chinese confectionery items including chocolates and toffees are available locally but the government should keep a vigil on these imports as non-halal products could be finding their way into Pakistani markets.
China also holds a major share in plastic accessories and hair bands while India and Hong Kong enjoy good share in artificial jewellery.
In children’s readymade garments, the Chinese dominance is threatened by clothes arriving from Vietnam, Indonesia, Malaysia and Thailand. “I think China now has 25-30pc market share in readymade children’s garments,” he said.
President Bohra Bazaar and Mochi Gali Association, Mansoor Jack gave a different view, saying Chinese children’s garments still rule the markets with 75pc market share due to low prices, followed by 60pc share in children shoes, 75pc share in flower and decorative items, 90pc crockery and 75pc share in ladies purses.
“The market share of Chinese goods will further increase after completion of various projects under CPEC,” he feared. Member Bahaduarbad Traders Association Imran Saeed Baghpati said the share of Chinese toys is now 98pc and the local industry stands nowhere.
He recalled that previously Chinese imports were restricted to mechanical toys while the local industry was providing toys made of plastic moulding and key driven toys. “Now every type of toy is being imported from China,” he said.
Few years ago, traders used to pack Chinese toys in Pakistan after imports but now packaging is also being done in China, he added.
President Nursery Furniture Market Association Hanif Khan said, the share of Chinese furniture (bedroom sets, centre and dining tables) hovers between 15-20pc where the local industry is still going strong.
He said Chinese raw material and parts for use in local chair and bedroom sets manufacturing are also arriving. “Import of finished Chinese furniture along with parts and accessories import is estimated at three to four million dollars per annum.”
The balance of trade is grossly in favor of China as arrival of goods from Pakistan’s largest trading partner rose to $9.322 billion in July-April 2017-18 while exports from Pakistan remained dismal at $1.444bn.
According to Pakistan Bureau of Statistics (PBS) figures, exports from Pakistan stood only $1.365bn in 2016-17 as against imports of $7.850bn in 2016-17 from China.