KARACHI: As emotionally charged Pakistanis gear up to celebrate Independence Day with renewed vigour under the new leadership of Pakistan Tehreek-i-Insaf, a majority of them are unaware that they are purchasing Chinese-made items, especially flags.

Influx of cheap Chinese products has already resulted in closing down of many industries while others are struggling to survive. The next possible victim could be the cottage industries that have been for years involved in manufacturing of August 14-related items.

Traders offered conflicting claims as some said that the Chinese market share now hovers between 60-70 per cent which was 20-30pc three to four years back.

Others contradict this stance saying that the share has definitely increased and now stands at 25-30pc versus 10-15pc a few years back.

Flags being produced in China are threatening the future of cottage industries in Pakistan

“The most alarming aspect for the organised and cottage industries is the arrival of finished Pakistani flags from China,” claimed owner of VIP Flags at Hassan Ali Effendi Road, Sheikh Nisar Parchamwala. He claimed that if the import of finished flags continues to thrive there could be closure of cottage industries.

He said many countries have banned import of national flags from other countries in order to provide protection to their local industries but in Pakistan the situation is reverse.

“I have tried to export flags of Turkey but could not succeed,” he said, adding that import is easy in Pakistan rather than exports. Other products like masks, plastic items and raw materials for local industries are also arriving from China.

Mr Parchamwala further claimed that the local cottage industry mainly still holds 70pc market share but is worried over the rising share of Chinese goods, especially flags.

People prefer Chinese items as they cost 20pc less than locally made goods, he said; the prices of locally made items are pegged to last year’s rate.

He said every year sales are showing growth of 15-20pc and this year the consumers’ expectations are high after a big change in the political set-up.

Mr Parchamwala said the sales season was delayed this year due to general elections held on July 25. Previously, market people used to get orders from July 15 to Aug 1 from retailers, political parties, private organisations etc.

He cautiously estimated a sales volume of Rs10 billion in Karachi alone in which the share of cottage industries is over 50pc.

Disagreeing with Mr Parchamwala, a big wholesaler/importer in the same market, who asked not to be named, confidently said the share of Chinese goods has swelled up to 70pc from 30pc four years back.

He said demand of Aug 14-related items is 50pc higher than last year as schools are reportedly making arrangements for Independence Day while people look more enthusiastic than previous years owing to the political change.

Chinese products cheaper

He said Chinese products are 20pc cheaper than Pakistani goods but quality of Chinese goods is much better than local stuff. Besides, local cottage industries have limited production capacity while China can feed the bulk market demand any time.

He feared job losses in cottage industries in areas like Korangi, Orangi Town, North Karachi etc as Chinese items are fast eroding the market share of local industries.

He said many cottage industries’ owners and labour class are dependent on the annual seasonal sales but availability of low-priced Chinese supplies has put their existence at stake.

So far sales of flags hold the top slot as compared to badges, hand bands, caps, glasses, masks, bangles, etc.

He said orders from political parties are also pouring in especially from interior Sindh.

Stall owners at Water Pump FB said “the entire stalls are studded with Chinese products which have made deep inroads and their strong presence cannot be reversed.”

“People are benefiting from Chinese goods otherwise the situation will have been different,” they said, adding that the quality of Chinese flags is far superior than local ones. “Chinese suppliers continue increasing discounts on getting more orders,” they said, adding that prices of Chinese items and even local goods are unchanged from last year.

Garments

President of SITE Association of Industry (SAI) Jawed Bilwani said the cottage industries have received double orders for t-shirts and ladies kurtis as compared to 2017. These garments are being made from leftover export stocks.

Mr Bilwani said by taking average price of Rs250 per suit (children’s frocks, t-shirts, children and ladies kurtis, the sale is estimated between Rs700-800 million in Karachi as many schools have asked children to wear green suits instead of uniforms.

Organised sector has also offered attractive discount on these items to lure buyers, he added.

Chairman All Karachi Tajir Ittehad Atiq Mir estimated over Rs15bn sales in Karachi alone. The demand of goods can be gauged from the rising number of makeshift stalls in various areas offering t-shirts, balloons, bangles, flags, caps, masks, badges, hair clips, face paintings, CDs of national songs, glasses, etc. “The demand this year has been the highest in the country’s history,” he claimed.

He said the Chinese share in total sales of various items is 70pc in which big flags are also arriving.

Published in Dawn, August 12th, 2018