When the world gets closer.

We help you see farther.

Sign up to our expressly international daily newsletter.

Economy

China’s Once Mighty Garment Industry Is Starting To Unravel

The clothing factories of Shenzhen have been hit by a perfect storm, battered by rising labor costs, unstable prices for raw materials, currency appreciation and dipping demand. By year’s end, more than half of the once bustling businesses could be shutte

Hard times have befallen China's once booming clothing industry
Hard times have befallen China's once booming clothing industry
Yang Xingyun

SHENZHEN - One by one, the garment factories of Shenzhen are shutting down. Industry analysts say that by Christmas, 60% will be gone. A business that was once worth 150 billion RMB (23 billion dollars) per year has been battered on all sides: rising costs of labor and raw materials, an appreciating currency, inflation, and a slump in demand.

I went down to Shenzhen's Luohu District to see what could be seen. Where thousands of small factories had been in production, most are now boarded up. Of the few hundred that do remain open, many operate just a handful of days per month.

I talked to one factory boss, Mr. Wang, a man who used to receive massive orders to supply brand-name retailers. He invited me onto his empty factory floor. He said the greatest difficulty the business faces is the continuing appreciation of the Chinese currency, RMB, which intimidates factories from taking orders. He now accepts only urgent and short-term contracts.

Wang pointed to the hundreds of automatic sewing machines sitting idle, noting that his garment production capacity used to be hundreds of thousands of pieces annually. Since January this year, production volume has not even reached 5,000 pieces. The factories used to hire thousands of workers. Now they employ just a few dozen. And even with these workers, the factory is only in operation for less than 10 days a month.

Wang told me that if the situation does not improve, his factory will eventually collapse altogether. For now, he is one of the luckier ones, able to maintain a skeletal operation; large numbers of smaller enterprises are already doomed no matter what happens.

Another factory boss, Liu Quande, confirmed the predicament of the business. He said that, since last year, the zone's once prosperous industry has been reduced to sporadic operations for a few surviving factories. Mr. Liu says that in addition currency woes and growing labor costs, there is also the problem of sharp price fluctuations for raw materials. Last year, the price of cotton shot up from 20,000 RMB per ton to 30,000 RMB per ton. Many garment factories then opted for synthetic fabrics to reduce costs. But the inferior garment quality was thought to be responsible for sluggish sales. Others hoarded cotton stock, but then the price of cotton dropped so much these businessmen went broke.

Liu says the Chinese garment industry is at a crucial point, and he is not particularly optimistic. The small enterprises are badly positioned in a competitive global environment, while the bigger ones will be difficult to restructure. He reckons that maybe 10% to 20% have a chance to survive.

The secretary-general of the Apparel Industry of Shenzhen, Shen Yongfang, said the region's garment export industry used to sell more than 100 billion dollars worth of goods per year. Now, at the best, it can generate just a few billion. Shen said that most of the entrepreneurs are eager to rebuild their businesses, except they don't know how.

Read the original article in Chinese.

Photo - Marc Oh

You've reached your monthly limit of free articles.
To read the full article, please subscribe.
Get unlimited access. Support Worldcrunch's unique mission:
  • Exclusive coverage from the world's top sources, in English for the first time.
  • Insights from the widest range of perspectives, languages and countries
  • $2.90/month or $19.90/year. No hidden charges. Cancel anytime.
Already a subscriber? Log in

When the world gets closer, we help you see farther

Sign up to our expressly international daily newsletter!
Geopolitics

Women, Life, Freedom: Iranian Protesters Find Their Voice

In the aftermath of the death of 22-year-old Mahsa Amini, who was arrested by the morality police mid-September for not wearing her hijab properly, many Iranians have taken the streets in nationwide protests. Independent Egyptian media Mada Masr spoke to one of the protesters.

Students of Amirkabir University in Tehran protest against the Islamic Republic in September 2022.

Lina Attalah

On September 16, protests erupted across Iran when 22-year-old Mahsa Amini died in custody after being arrested and beaten by morality police for her supposedly unsuitable attire. The protests, witnesses recount, have touched on all aspects of rights in Iran, civil, political, personal, social and economic.

Mada Masr spoke to a protester who was in the prime of her youth during the 2009 Green Movement protests. Speaking on condition of anonymity due to possible security retaliation, she walked us through what she has seen over the past week in the heart of Tehran, and how she sees the legacy of resistance street politics in Iran across history.

MADA MASR: Describe to us what you are seeing these days on the streets of Tehran.

ANONYMOUS PROTESTER: People like me, we are emotional because we remember 2009. The location of the protests is the same: Keshavarz Boulevard in the middle of Tehran. The last time Tehranis took to these streets was in 2009, one of the last protests of the Green Movement. Since then, the center of Tehran hasn’t seen any mass protests, and most of these streets have changed, with new urban planning meant to make them more controllable.

Remembering 2009 triggers many things, such as street strategies, tactics and the way we could find each other in the middle of the chaos. But this is us now, almost at the back. Up front, there are many younger people, especially girls. They are extremely brave, fearless and smart.

Keep reading...Show less

When the world gets closer, we help you see farther

Sign up to our expressly international daily newsletter!
You've reached your monthly limit of free articles.
To read the full article, please subscribe.
Get unlimited access. Support Worldcrunch's unique mission:
  • Exclusive coverage from the world's top sources, in English for the first time.
  • Insights from the widest range of perspectives, languages and countries
  • $2.90/month or $19.90/year. No hidden charges. Cancel anytime.
Already a subscriber? Log in
Writing contest - My pandemic story
THE LATEST
FOCUS
TRENDING TOPICS

Central to the tragic absurdity of this war is the question of language. Vladimir Putin has repeated that protecting ethnic Russians and the Russian-speaking populations of Ukraine was a driving motivation for his invasion.

Yet one month on, a quick look at the map shows that many of the worst-hit cities are those where Russian is the predominant language: Kharkiv, Odesa, Kherson.

Watch VideoShow less
MOST READ