In China, the casualties of trade politics

Factory workers lose jobs as word spreads that U.S. might limit textile imports

November 24, 2003|By Gady A. Epstein | Gady A. Epstein,SUN FOREIGN STAFF

QINGDAO, China - Row after row of young women, most of them farmers' daughters, sit every working day in the Qingdao Nannan Co. factory, stitching together with assembly-line determination thousands of bras destined for the U.S. market for $3 to $4 a day, comfortably more than their parents make.

But in the same factory are rows of vacant desks with sewing machines draped in plastic, the work stations of employees laid off in recent months. The workers and officials at Qingdao Nannan, China's third-largest exporter of bras to the United States, are learning a difficult lesson in U.S.-China trade politics.

In recent months, orders from companies such as Victoria's Secret, Maidenform and Target - all customers of Qingdao Nannan - have plummeted as word spread that the Bush administration might limit textile imports from China. The factory laid off 300 workers, roughly a tenth of its work force, in the past two months and plans to lay off at least 300 more.

The layoffs are among the costs of the latest international trade skirmish, a dispute that has been replayed around the world for decades but foreshadows a much larger trade battle between the United States and China. China enjoyed a $103 billion trade surplus with the United States last year, and its entry into the World Trade Organization has enhanced its position as the factory for the globe.

In the past two years, that has become especially true for some Chinese textiles no longer subject to quotas, including bras, dressing gowns and knit fabrics. A U.S. trade panel ruled last week in favor of imposing a limit on China's sales of those specific products to the United States.

It was only one salvo in a larger, intensifying effort by some political, corporate and labor interests in the United States to portray China as a rising economic power unfairly taking jobs from U.S. workers. The textile ruling would affect just a small fraction of each country's economy, but Qingdao Nannan's experience shows how even a minor trade dispute can have a painful effect on the factory grounds.

"It's inconsiderate for the United States to impose a quota on a developing country that relies a lot on labor-intensive industries," said Yu Yantao, manager of overseas sales for Qingdao Nannan, a South Korean-owned company in this port city on China's thriving east coast.

With millions working for the textile industry, Yu said, "What will these people eat if they lose their jobs?"

The transitory nature of workers' lives in China makes the question worth considering. At any given time, China has more than 100 million people looking for work, including millions laid off from struggling state-owned factories and millions more who are migrating to cities from the countryside. Many of the workers in privately owned factories in Qingdao and other coastal cities are migrants who send much-needed money back to their parents and grandparents in rural villages.

"Now we can send money back to our families, but if we lose these jobs, we would not be able to pay even our own expenses," said Chen Haiyan, 24, who left the family farm seven years ago to work an hour's bus ride away at Qingdao Nannan.

Until recently, Chen sewed on about 900 bra fasteners a day; now, with bra orders declining, she sews about 450 clasps onto girdles each day. She said she works eight-hour days, five days a week, earning $60 to $100 a month, more than half of which she gives to her parents. She and five others share a room in a four-story dormitory near the factory. Dorm residents share one large bathroom outside the building; showers are available only at the factory.

"We've adjusted to the environment here," she said. "And the pay's pretty good."

It is a better life than when she was a child, she said. Her parents earn $400 to $600 a year from farming, less than she earns, but flour and meat are no longer unaffordable extravagances. "When we were small, money was always tight in the family," she said. "We often could not afford steamed buns, and it was only at big holidays that we made dumplings."

The trade dispute over textiles underscores the importance of such jobs to a generation of migrants such as Chen, even as it confirms China's emergence as a global manufacturing force. But inconveniently for U.S. trade warriors, experts say, textiles make a less than perfect case that Chen and other Chinese workers are taking American jobs.

The U.S. textile industry has lost more than 200,000 jobs since 1997, according to the American Textile Manufacturers Institute's Web site, which includes a report titled "China: How Big a Threat?" But that job loss doesn't mean 200,000 new jobs have come to China, which has long had a large textile sector and was very limited until last year in how much it could export to the United States.

Since 1998, China has lost more than a quarter of its textile manufacturing jobs - more than 1 million jobs - according to official government statistics, largely because of layoffs from state-owned firms.

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