Cheap Chinese Goods Threaten Iraqi Suppliers

A year or so ago, Ali Hamdi, an owner of a garment factory, found he could no longer compete with the influx of cheaper women’s clothing coming in from China.

While it costs Hamdi’s factory more than 15,000 dinars (10 US cents) to make a dress, a similar one made in China costs significantly less to buy off the shelf. In 2003, Hamdi shut his factory, and now unemployed, has no choice but to “stay at home with the women”.

“After the Chinese goods invaded the Iraqi markets, our customers have gradually left us,” he said.

After the fall of Saddam’s regime, Iraq opened its local markets to goods from abroad. The increase in foreign products, particularly from China, has meant more choice and competitive prices for Iraq’s shoppers. But local manufacturers have not welcomed the changes.

A ministry of trade official, who spoke on condition of anonymity, explained that it’s difficult to track imports from China because most of the products are brought in by individual businessmen or small trading companies.

“The Chinese products flow in from everywhere and it’s impossible to regulate these imports at the moment,” he said.

Sarhan Sagar, who trades electronic equipment, said he believes Chinese products sell well because they reproduce products or make imitation brands that are of high quality. He sells between 35 and 60 electronic goods a day, most of which are made in China.

Economic expert Dr Salam Smesm says that the problem for Iraqi producers is that while Chinese companies receive tax breaks and other incentives allowing them to make their products cheaply, domestic producers are left to fend for themselves. “Iraqi products face unfair competition,” she said.

Iraqis say they prefer Chinese products to Iraqi ones because they cost less.

“[Chinese goods] are cheaper than brands made in other countries, including domestic ones,” said Ahmad Sa’ad.

He says that if he restricts himself to buying Iraqi-made products, 35,000 dinars will only buy a pair of shoes. But if he chooses Chinese goods, the same amount will buy a shirt, trousers and shoes.

Shkriya Salim, a housewife, said the less expensive Chinese goods have enabled Iraqis to afford electric appliances and other products that were too dear before.

“After being deprived of basic goods for so long, we can now get furniture and other things for our house for reasonable prices,” she said. “As long as it works, I don’t mind where it’s made.”

Duraed Salman is an IWPR trainee in Baghdad.