WP,pg1: China Bristles at Textile Trade Backlash

[DeepModem Mom]

China Bristles at Textile Trade Backlash
Calls for Limits on Exports Seen as Unfair Restriction in Global Market

By Peter S. Goodman
Washington Post Foreign Service
Thursday, May 5, 2005; Page A01


....Chinese officials argue that their country is the scapegoat for the inevitable demise of American manufacturing: If American closets were not full of Chinese-made clothes, they would instead be occupied by goods from some other developing country.

Despite a two-thirds jump in overall shipments of textiles and clothes from China since quotas were lifted at the beginning of the year, imports from all countries have climbed by only 15 percent, and those from Mexico, South Korea and the Philippines have dropped, according to the foreign trade division of the U.S. Census Bureau. In other words, much of the increased Chinese production is coming not at the expense of American producers, but from those in other countries.

The head of global procurement for Wal-Mart, which last year bought more than $1.5 billion worth of apparel in China, scoffed at the notion that American jobs are at risk because of increased Chinese clothing imports. "The only apparel that's left in the U.S. is sweatshops in Chinatown," the procurement chief, Andrew Tsuei, said during an interview last year.

(Li Suiming's) factory lends some credence to claims that China's textile boom is driven in part by labor exploitation. He said seamstresses earn about $125 per month and work nine hours per day, with overtime very rare and always paid. But four seamstresses, all of whom spoke on the condition that they not be identified, said they were paid about $75 per month and must routinely work 12 hours per day without overtime compensation. No air conditioners cut the furnace-like summer heat.

Still, the very existence of Li's venture and thousands of other private factories together undercut one of the key arguments for protectionism -- that the textile trade in China remains in the clutches of a Communist Party-run state....


http://www.washingtonpost.com/wp-dyn/content/article/2005/05/04/AR2005050402120.html

[kodi]

1. chinese texttile factories recieve govt subsidies US manufactuers don't

approximately 1/2 of their exporting textile plants are operating at a loss, their govt pays for employee health care, electicity and other utilities, and capitial expenditures such as buildings and machinery are highly subsidized by the government as well. also, non-government approved unions are illegal there, so wages remain low (that is if the employees are not prison laborers).

how in the hell this is free market capitialism is beyond me.

i work in the textile industry and compete with many chinese manufactuers. for the most part, their goods are cheap and shoddy. fabric that arrives in the US usually is off spec, but there is nothing the importers can do since the letters of credit are already released. major upholstery importers are pullng their hair out from the off-color, poorly fabricated materials they contracted to be made in china and there is already a movement away from high-end chinese goods until they can deliver quality material to the west.

I was at the big furniturem arket show in hgh point, nc last month and heard horror stories at almost every both i visited about thee things.

the major issue is that a large segment of the chinese textile industry is government owned or highly subsidized and it competes with US txtile companies who are not.

in essence, the chinese government has used export potentials to embark on a program that subsidizes the chinese textile industry as if it were a "works projects administration" or WPA to render higher empoloyment to its 1.3 billion people.

[DeepModem Mom]

2. Thanks for your inside view, kodi -- n/t

[Tempest]

4. U.S. textile manufacturers do receive government subsidies

In the form of tax breaks.

They do not complete on a level playing field when compared to other industrial nations. It is hypocritical to pretend they do.


>>for the most part, their goods are cheap and shoddy<<

For the most part, their goods are made by cheap labor in AMERICAN company owned factories.

[idlisambar]

5. Inconsequential

The relative degree of protection between industrialized nations means very little as apparel making has migrated to the developing world. The issue all industrialized nations face is how to handle this development.

[Tempest]

7. Inconsequential is relative

When Bush cut back on textile subsidies, many companies either went out of business, relocated outside the U.S. or stopped manufacturing and became importers.


If Bush was concerned about U.S. manufacturers, he would have never lobbied to get China into the WTO.

[orwell]

6. Thanks Kodi

In the end it is consumers that will accept the price/quality trade off that chains like WalMart depend on. For cash strapped consumers that demand "the latest" in fashion, furniture, electronics, quality is evidently not a consideration. They are speaking loudly with their wallets.

Japan used a similar strategy post WWII to build up their own industry and eventually take market share from US manufacturers. At first (heavily subsidized) Japanese products were shoddy. But over time, they have become synonymous with quality. Who views Sony TV's or Toyotas as shoddy? But now, Japan is "competitive" with some of the highest labor rates of any industrialized nation.

China is doing all the right things, roughly following the Japanese model, because they are no longer wed to an ideology. They tried that and failed miserably. When will the US give up the "free market" religion and adopt progressive solutions to highly complex trade realities. The free market, especially in the US, is a destructive myth promulgated by global elites who use it to pad their own decidedly "unfree market" business, political, and social practices. To these eleite ministers of propaganda, the free market is for the "little guy".

There has never been such a thing as a true free market, at least in my lifetime. In recent history the quasi "free market" ended with the Federal Reserve Act.

All markets have rules. It's time we all stopped kidding ourselves.

[NewJeffCT]

8. Good post

Our economy definitely needs some high level direction, and we need to think long-term as well - rebuild the infrastructure, improve the public schools, etc, etc.

I remember what you are saying. I was born in 1966, and I remember toys from when I was very young and if they said "made in Japan", it meant it was low quality. Then, as Japan became better quality stuff, it was "made in Taiwan" that meant low quality. And, by the time I was in high school, much of the best stereo equipment (save the really high end stuff) & cars were Japanese, again save the really high end stuff.

Now, it is "made in China" that is low quality, but they are rapidly getting better. It won't be long before people are buying a Chinese brand TV instead of a Hitachi or Sony.

[kodi]

11. nicely done. & those demanding a national economic policy aren't heard

.

[NewJeffCT]

9. I have family in China...

While I agree with most of what you are saying, the government most certainly does not provide health care for its citizens. It's part of the reason why so many there want to work for American, Japanese or European companies - it's so cheap for them to provide health insurance that it's usually a minor perk added to an already lower labor cost.

Unless you're in a high level job there, you either buy your own health insurance or go without.

[HereSince1628]

3. Yes, the industry has left the US...so now its ok to scoff

rather than lament and fear which industry is next.

Little do idiots like this realize that it is frustration and disillusionment that leads to left-wing revolution.

They should contemplate upon the concept that everything the few have can be taken away by the many.

[Kagemusha]

10. I hear it contemplated by right wingers a lot.

That's why they support law enforcement.

This feeds that approach perfectly.