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Chinese Textile Mills Move to America

By Liu Rong (People's Daily Online)    00:05, August 05, 2015
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On Monday, the New York Times published a long story about a Chinese Textile Company outsourcing to the United Sates, drawing the attention of many Chinese readers.

Textile production in China is becoming increasingly unprofitable after years of rising wages, higher energy bills and mounting logistical costs, as well as new government quotas on the import of cotton, the New York Times reported.

At the same time, manufacturing costs in the United States are becoming more competitive. In Lancaster County, where Indian Land is located, Keer has found residents desperate for work, even at depressed wages, as well as access to cheap and abundant land and energy and heavily subsidized cotton.

Twenty-five years ago, Ni Meijuan earned $19 a month working the spinning machines at a vast textile factory in the Chinese city of Hangzhou.

Now at the Keer Group’s cotton mill in South Carolina, which opened in April, Ms. Ni is training American workers to do the job she used to do.

Outside the factory of Keer Group in the U.S., sign of "NOW HIRING" can be seen.

“They’re quick learners,” Ms. Ni said after showing two fresh recruits how to tease errant wisps of cotton from the machines’ grinding gears. “But they have to learn to be quicker.”

According to New York Times, politicians, from the county to the state to the federal government, have raced to ply Keer with grants and tax breaks to bring back manufacturing jobs once thought to be lost forever.

Keer’s $218 million mill spins yarn from raw cotton to sell to textile makers across Asia. While Keer still spins much of its yarn in China, importing the raw cotton from America, that is slowly changing.

“The reasons for Keer coming here? Incentives, land, the environment, the workers,” Zhu Shanqing, Keer’s chairman, said on a recent trip to the United States.

“In China, the whole yarn manufacturing industry is losing money,” he added. “In America, it’s very different.”

Since Beijing and Washington resumed trade relations in the early 1970s, the United States has mostly run a huge trade deficit, as Americans consumed billions of dollars in cheap electronics, apparel and other Chinese goods, the newspaper said.

But surging labor and energy costs in China are eroding its competitiveness in manufacturing. According to the Boston Consulting Group, manufacturing wages adjusted for productivity have almost tripled in China over the last decade, to an estimated $12.47 an hour last year from $4.35 an hour in 2004.

In the United States, manufacturing wages adjusted for productivity have risen less than 30 percent since 2004, to $22.32 an hour, according to the consulting firm. And the higher wages for American workers are offset by lower natural gas prices, as well as inexpensive cotton and local tax breaks and subsidies.

 Today, for every $1 required to manufacture in the United States, Boston Consulting estimates that it costs 96 cents to manufacture in China. Yarn production costs in China are now 30 percent higher than in the United States, the newspaper quoted reports by the International Textile Manufacturers Federation.

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Editor:Luxiao Zou,任建民)

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