Al-Ahram Weekly Online   21 -27 February 2008
Issue No. 885
Published in Cairo by AL-AHRAM established in 1875

China comes to town

From Egyptian flags and Ramadan lanterns to electronic items and motorcycles, Chinese products have taken Egypt's markets by storm, writes Dena Rashed

Click to view caption
Gouda waiting for customers; after winning the African Cup of Nations, Egyptians celebrated in the streets waving their 'Made in China' flags

As she was waiting for the final match of the African Cup of Nations between Egypt and Cameroon, Sally, a 26-year-old Egyptian, decided to buy an Egyptian flag, not to wave it in the streets like the thousands of others who were doing so, but rather to hang it on her bedroom wall. She bought a big flag for LE30 and proudly examined it, but after checking its plastic wrapping she felt disappointed. "It's made in China," she gasped. "Imagine!" Well, yes, most Egyptians can imagine, because Chinese products are now everywhere.

Although seen in one way a flag is just another product, a piece of cloth attached to a plastic stick, it still feels strange to hold a national flag made by foreigners. However, shoppers like Sally are no longer surprised, since not only symbols of Egypt such as the Egyptian flag are now manufactured in China, but so are other traditional objects, such as Ramadan lanterns. One man who has been in the business of selling flags for the past 40 years has some answers.

"I have to admit that many people come to ask for the flags that are made in China because they last longer," says Abdu Gouda, who works at the Ahli Club in Cairo and has been stationed in front of its gate selling Ahli and Egyptian flags. Gouda buys the flags in Al-Moski, where wholesale vendors supply hundreds of other buyers with different kinds of goods. Egyptian-made flags are a few pounds more expensive than the Chinese ones, and, according to Gouda, they are not as good. "The material stretches, and the flag does not last for so long," he says.

Despite the difference in quality, many people benefited from selling both the Egyptian and the Chinese-made flags during this year's football frenzy, because the demand was so high. "The African Cup in 2006 and the one this year were major sources of income for many suppliers, manufacturers and street vendors," Gouda says. However, there are also many other Chinese- made goods on sale in Egypt not associated with definite events, and these now figure on many shoppers' lists.

Stories of Chinese vendors knocking on doors with huge backpacks full of clothes seem to be diminishing, but the number of such vendors working in Egyptian markets and fairs seems to be on the rise. Squeezed in between two booths at the Shooting Club in Doqqi, for example, two Chinese women sell clothes and scarves, among other Egyptian vendors. Sasa and Lolo, with their smiles, zero English and almost non-existent Arabic, do not have much to say about their business or the reason they have come to Egypt. However, they are very familiar with their products and prices, and they manage to mix well with their Egyptian customers and counterparts.

Yasser El-Saadani, a vendor whose booth is in front of theirs, has witnessed the proliferation of Chinese products and vendors in the Egyptian market over seven years of experience participating in various fairs. "They might be afraid to talk because some of them only have tourist visas," he says. Competition from Chinese products and Chinese vendors is a major concern to Egyptian vendors like El-Saadani, who explains that, "the market is all about Chinese products now. The quality is good compared to the cheap prices, and importing Chinese goods is easier than ever."

El-Saadani believes that European markets are not as saturated with Chinese goods, and he thinks there are reasons why Chinese products fill Egyptian markets. "Many importers want to make an easy profit, so they choose the cheapest Chinese goods for consumers here," he says. Many people view Chinese products as cheap and disposable, while others tailor their purchases according to their needs and budgets. "I like Chinese clothes and accessories, but I would not risk buying a machine or a car made in China," says Hoda Abdel-Hamid, a shopper at the fair.

While Abdel-Hamid can also afford to buy European brands, security guard Mohamed Abdel-Khaleq tends to buy Chinese electronic goods. "There are products to suit everyone's income," he says. Nevertheless, despite his enthusiasm for China's exports, he still can't bear to part with his Italian-made Vespa motorcycle. "I've heard about the new Chinese motorcycles, but I am not ready to trade in my original Vespa," he says. However, many others have taken this step, starting with small products, moving on to electronic gadgets, and then using their savings to buy a Chinese car or motorcycle.

A new shop selling Chinese motorcycles has recently opened in the low-income Cairo district of Boulaq Abul-Ela, and the owner, Khaled El-Helw, explains that Chinese motorcycles are practical and half the price of Japanese ones. "The Chinese have advantages that we don't have in Egypt, such as cheap labour, mass production and clear regulations. Why shouldn't they be able to compete?" El-Helw seems very interested in the Chinese models, and he plans to visit China soon to import from there directly. As groups of young men look into the shop and ask for prices, El-Helw remarks that, "when a young man takes a microbus to work everyday, wouldn't he rather save up to buy a LE2,500 Chinese bike?"

However, if Chinese motorbikes are definitely cheaper, Chinese electronic gadgets are not necessarily low-priced, as Mohamed Shaaban, a salesperson in a Cairo electronics store argues. "There is an abundance of Chinese TVs in our store, and I feel people don't really have much of a choice. Everywhere they turn there are products that have the label 'Made in China' on them."

Yet Egypt is not alone in feeling that Chinese- made goods are saturating local markets. China's economy grew at an estimated 11.4 per cent in 2007, and the country posted a trade surplus of $80 billion with the rest of the world, boosted by its exports. Although China's exports to Egypt, at $2.9 billion in 2007- according to the Financial Times-, cannot be compared to the United States's to Egypt, worth $6.7 billion in 2006, it is expected that China's economy will expand still further over the next few years and might even replace the US as Egypt's number one trading partner. The Times also indicated that while Chinese exports to Egypt have increased by 50 per cent since 2006, Egyptian exports to China have increased by only 23 per cent over the same period to reach a total of $164 million.

These numbers only indicate part of the problem for Egypt in its trading relationship with China, however. According to Ahmed Abu Shadi, who headed a centre specialising in the provision of economic information, while Egyptian-made products are not competitive enough with the Chinese, trying to protect Egyptian markets from Chinese-made imports will not work. "The government has tried many policies to combat cheap imports and promote locally made goods. However, these policies have had negative impacts because Egyptian-made products have deteriorated as a result and their quality has declined."

"Protecting our products from cheap imports is not the answer. Our manufacturers ought to do more in order to compete," he says, adding that there are still far too many obstacles preventing Egyptian manufacturing from flourishing, "be they restraints, customs, red tape, or a lack of training. We should be looking at our problems first and not criticising Chinese success. We should be concerned at the proliferation of Chinese products, but at the same time we should not clamp down on imports or install protectionism."

Abu Shadi believes that the consumer comes first and that he or she has a right to the cheapest and most affordable commodities, as long as these meet certain quality standards. "All imported products should match criteria devised for Egyptian consumers," he says, "something which unfortunately is not always the case, with children's toys for example, because we often don't get the best imports."

Despite concerns about the quality of some Chinese products, many people are fascinated by Chinese success, seeing in it a kind of model for other countries. Abu Shadi, for example, is an admirer of the Chinese. "We have to salute them," he says, "and try to imitate the best of their experience. By doing so, we will be able to compete more effectively."

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