The Impact of Chinese Import Penetration on the South African Manufacturing Sector

Abstract

This article uses a Chenery-type decomposition and econometric estimation to evaluate the impact of Chinese trade on production and employment in South African manufacturing from 1992 to 2010. The results suggest that increased import penetration from China caused South African manufacturing output to be 5 per cent lower in 2010 than it otherwise would have been. The estimated reduction of total employment in manufacturing as a result of trade with China is larger -in 2010 about 8 per cent -because the declines in output were concentrated on labour-intensive industries and because the increase in imports raised labour productivity within industries.

Does rising import competition harm local firm productivity in less advanced economies? Evidence from the Vietnam's manufacturing sector

“…Edwards and Jenkins 2013;Autor, Dorn, and Hanson 2013;Bugamelli, Fabiani, and Sette 2010;Vogel and Wagner 2010;Alvarez and Claro 2008;Aghion, Rediing et al 2005;Van Biesebroeck 2003). Aghion, Redding et al (2005) suggested that technologically advanced firms are more likely to respond to the threat of entry by importing firms by investing in new technologies and production process.…”

“…However, when considering within a market, imports may have either a negative or no impact on productivity, depending on firm competitiveness and context (e.g. Edwards and Jenkins 2013;Vogel & Wagner 2011;Van Biesebroeck 2003). Hence, generalized inferences are difficult.…”

“…Imports displace or crowd out domestic production (Edwards and Jenkins 2013). Rising imports may cause local firms to lose market shares to imported goods, thus reducing production scales and impacting negatively on productivity because firms lose scale efficiency.…”

“…Unlike most developed countries, in Chile as well as Vietnam where capital and skilled labour are scarce, this impedes or makes it costly to upgrade products as well as provide little incentive for firms to invest in more advanced technologies when labour is much cheaper. Similarly, Edwards and Jenkins (2013) show that imports displace or crowd out domestic production. With rising import penetration, local firms may lose market shares, such that their production scales shrinks, leading to the loss of scale efficiency.…”

International Trade and Employment: A Quantile Regression Approach

“…Vietnamese firms face direct competition pressure from imports, especially from China. Imports displace domestic production, and this may have a negative effect on firm employment (Edwards and Jenkins 2013).…”