By Devin Steele
CHARLOTTE, NC The Bush Administration will make or break the U.S. textile industry with its actions on trade over the next 3-1/2 years, according to Cass Johnson, president of the National Council of Textile Organizations (NCTO).
They are fully capable of breaking this industry and not shedding a tear, said Cass Johnson, NCTO president.
So its imperative that textile interests work as an ally, not an adversary, with the White House to push its agenda, keynoter Johnson told members of the Textured Yarn Association of America (TYAA) during their Winter Conference at Lowes Motor Speedway on March 15.
They are fully capable of breaking this industry and not shedding a tear, he said. This is a very tough administration. It has a Republican Congress behind it. It is willing to work with the textile industry. But it is insisting that we work with them, too, that we not be a constant thorn in their sides.
Johnson added that his organization likewise wants to work with the administration.
NCTO has said, we want to be constructive with you, and we realize we cannot get everything we want but we need to get some important things, he said. So we have established a very constructive but frank dialogue. I have seen this administration turn its back at times on this industry, with devastating results. We cannot let that happen again. Its an essential opportunity for us to establish some ties and get some results out of this administration.
Johnson was among five conference speakers, whose presentations covered the Dominican Republic-Central American Free Trade Agreement (DR-CAFTA), the nonwovens market, the China polyester market and textured yarns in automotive fabrics.
The NCTO head spent a good amount of time on the elephant in the room, or in this case, the dragon China, of course.
Calling it China, Inc., he noted that Chinas textile and apparel sector employs directly or indirectly 90 million people. Its apparel sector makes 20 billion garments a year and, citing Chinas government, is capable of clothing every person in the world with five garments, he added.
It is an astounding development and it has not happened by chance, Johnson said. It is a planned development. Nearly 15 years ago, China began a series of three five-year plans, at the end of which its aim was to become the dominant textile and apparel supplier in the world.
It was a government-motivated plan. It directed immense resources from the government into the industry. Suffice it to say they are now near the end of their plan and, for all intents and purposes, it is working very well. Their production expanded 27 percent last year and they were already the largest textile and apparel producer in the world.
Much of its plan to dominant the world in manufacturing is through nefarious means, such as pegging its currency about 40 percent below the dollar, he added. So the need for action is clear, he stressed.
Steve Charron (L) of PAF Sales and Jennifer Pearce of Universal Fiber Systems examine a garment made from nonwovens fabrics, passed around by speaker John Hagewood of the Nonwovens Cooperative Research Center.
The goal of NCTO and allied groups is to try to keep China restrained in the post-quota world through 2008, when the World Trade Organizations textile safeguard mechanism expires. Longer term, the group wants to initiative permanent safeguard development in the WTOs Doha Round.
He also updated attendees on currently filed safeguards, saying the textile industry has urged the administration to self-initiative safeguards based on import data already released.
The NCTO has three strategies for success, Johnson said: 1) to develop worldwide coalitions; 2) to motivate Congress to get involved; and 3) to reach out to the administration. He urged TYAA members to get involved in the NCTO by joining, becoming engaged with legislators and initiating or participating in grassroots efforts.
Jane Johnson, manager of governmental relations for Unifi, Inc., offered a brief update on certain trade deals and an in-depth look at DR-CAFTA, which is expected to come up for a vote in Congress this year. She concurred with Johnson that the tone in Washington is changing, vis a vis its relationship with the domestic textile and apparel industry.
They really want to work with the textile and apparel industry, she said. They want our support. They feel like they have been negotiating these agreements with yarn-forward and fabric-forward provisions. And they have taken a very tough, new stance of wanting our support if theyre going to continue with the yarn-forward provisions in future free trade agreements.
They have a free trade agenda and theyre going to have it for the next three years and I dont see anything standing in the way of that other than the U.S. trade deficit.
As such, DR-CAFTA is the administrations top trade priority, Johnson said, adding that it is the linchpin for future trade deals. She also explained exceptions cumulation, trade preference levels (TPLs) and single transformation that have made much of the U.S. textile and apparel industry hesitant to get on board with the deal.
She pointed out that the pact already has been ratified by the governments of three participating countries, so the likelihood of a renegotiation is unlikely.
Meanwhile, John Hagewood of NC State Universitys Nonwovens Cooperative Research Center (NCRC) presented a close look at the nonwovens sector, noting that it is a $50 billion market, including $11 billion in roll goods. About 60 percent of nonwovens are disposable, which helps make the U.S. their largest market, as Americans are more likely to throw away products, he said.
John Hagewood of NRCR
The U.S. leads the world in technology and investment in nonwovens, he said. More than 550 nonwovens manufacturers are based in the U.S., employing more than 160,000 people and with annual sales of more than $40 billion, he added. North Carolina leads the nation with 32 nonwovens producers.
Nonwovens are resistant to import pressures because shipping costs exceed production costs, in most instances, he added.
In his report on Chinas polyester market, Alasdair Carmichael of PCI Fibres & Raw Materials reported that China experienced a difficult 2004, with prospects for 2005 no better. The rate of capacity expansion has exceeded the need for production, he said, noting that the utilization rate is less than 70 percent.
Carmichael showed data indicating that U.S. producer shipments of synthetic fiber was only 10 percent lower last year than its peak year of 2000.
Chris Heard of Milliken & Co.
That tells me that there is still a business out there, he said. There is going to be a synthetic fiber business particularly for nonwovens, carpet, industrial fabric and automotive products.
Chris Heard, director of Development for Milliken Automotive Fabrics, Milliken & Co., reviewed applications of textured yarns in automotive upholstery fabrics. He offered a ranking of major auto manufacturers and a forecast for 2008.
For textured yarn makers and others, innovation is the only sustainable business strategy, he said. As such, producers should stay engaged with the world at its evolution and develop innovations with a number of key attributes, such as cleanable surfaces, safety, a soft touch, stretch and eco-friendliness.
WASHINGTON, DC In response to the doubling of major apparel products imported into the U.S. from China with the Jan. 1 expiration of quotas on textile and apparel products, a coalition of industry interests called on the U.S. government to self-initiate the World Trade Organizations safeguard mechanism.
The U.S. textile industry, the fiber-producing sector and a labor union made the announcement on March 11. They were represented during a teleconference by members of the American Manufacturing Trade Action Coalition (AMTAC), the National Council of Textile Organizations (NCTO), the National Textile Association (NTA), the National Cotton Council (NCC) and UNITE HERE.
The coalition is seeking to limit the very real and severe damage being inflicted by China to the U.S. industry, they said in a statement.
(Chinas) ability to overrun the market does not come from the fact that they are more efficient or higher-quality producers, but that they have created an absolute advantage through artificial pricing, John Emrich, CEO of Guilford Mills Corp., said during the conference call. We just dont get why the government wont act, and it must act now on these safeguards to protect the balance of the industry.
In January, the first month following the expiration of quotas on textile and apparel products, imports from China in major apparel products doubled compared to January 2004, according to the U.S. Office of Textiles and Apparel.
Some particularly sensitive products such as cotton trousers saw import increases of as much as 1,001 percent.
In the month of January, China took a 35 percent share of the U.S. import market for textiles and a 22 percent share for apparel. Total Chinese share of the U.S. import market was 29 percent, the highest share of any single country in history.
At the same time, textile and apparel job losses have accelerated sharply with over 12,000 jobs lost in the combined sector in January. At least seven textile plants have already closed in the U.S. this year.
Because Jan. import numbers contain a significant amount of goods shipped from China while China was still under quota, the January figures are considered only a portent of what is to come.
U.S. Secretary of Commerce Carlos M. Gutierrez announced March 21 the initiation of a new system to monitor imports of textiles and apparel products. The system will allow the department and the public timely access to preliminary textile and apparel data from U.S. Customs and Border Protection, aggregated on a category basis, allowing decision makers to more quickly analyze the impact of imports on the U.S. market.
CLARKTON, NC Gildan Activewear Inc. and Sanford, NC-based Frontier Spinning Mills, Inc. have formed a joint venture that will include the opening of a new yarn-spinning plant here and the hiring of 134 people over the next three years, NC Gov. Mike Easley announced.
The new venture, Cedartown Manufacturing, LLC, will operate in a plant vacated by Harriet & Henderson in 2003.
The 210,000-square-foot plant is expected to open around May 1, according to company officials.
The announcement was made possible in part by a $175,000 grant from the One North Carolina Fund, Easley announced in a press release.
North Carolina is a global leader in the textile industry and this announcement by Cedartown Manufacturing shows that we continue to be a strong competitor for related jobs and businesses, Easley said. Our highly-skilled work force, excellent education system and sound investments in infrastructure continue to pay off.
The new jobs will pay an average weekly wage of $562 plus benefits, the governor said.
Company officials said they chose to open the Clarkton facility because of the incentives offered by the state to locate a facility in that area, along with the available trained work force.
The One North Carolina Fund helps the state recruit and expand quality jobs by providing financial assistance to businesses or industries deemed by the governor to be vital to a healthy and growing state economy. Through use of this fund, more than 13,000 jobs and more than $1.8 billion in investment have been created since 2001.
Other contributors include the N.C. Dept. of Commerce, the N.C. Rural Economic Development Center, Bladen County, the town of Clarkton, NCs Southeast Partnership and Progress Energy.
By Sally Kay
CHARLOTTE, NC Its an exciting time for The Hosiery Association. Were 100 years old and its time to honor our heritage, pioneer our present and form our future.
So expect us to have a great deal to talk about at our 2005 Annual Convention on Hilton Head Island, April 7-10.
As is our tradition, the convention will convene with our Executive Committee and Board of Directors meetings on April 7. We are fortunate to have a dedicated roster of notable executives from our industry participating in our leadership forums to steer THA in successful directions for the future.
Also in keeping with tradition, our chairman, Fritz Schulte, will open and close the professional sessions with some brief remarks.
Speaking of the future, do you have some trouble seeing the forest for the trees? Join us on April 8 to hear Marshal Cohen from The NPD Group, a global leader in sales and marketing information, discuss ways to clear your path to success.
In his engaging and thought-provoking manner, Marshal will help us understand whats happening inside and outside our marketplace, offer suggestions on how to overcome challenges and even grow our businesses. It will be a presentation not to be missed.
There are things to be learned from other industries, too. Jay Craft, vice president of Product Development for VF Jeanswear Limited Partnership, will be on hand to discuss the denim industry and what we can learn from its experience.
Jay will comment on the all-important issue of global trade and its impact on various sectors of the jean business. He will also provide recommendations for the hosiery industry to help us preserve our domestic work force.
Well also be offering a World Trade Organization and trade agreement update. There will be an overview of the impact of the removal of quotas in the first four months of 2005 and a presentation on future agreements and provisions that may be on the horizon and what they mean for our industry.
We will also be presenting discussions on the changing dynamics of the natural and manmade fiber markets. Gaylon Booker, a consultant and former CEO of the National Cotton Council, and Billy Lawson of Nilit America Corporation will consider the impact of globalization on the entire hosiery industry value chain.
Be sure to join us for these informative sessions to learn how these fibers will be priced and made available in the domestic and international marketplaces in the future.
With an eye towards tomorrow, Dan St. Louis of The Hosiery Technology Center (HTC) will be on hand to provide highlights from the FAST show in Italy and what HTC is currently working on. This session will review the latest in machinery, fibers, yarns, packaging and other services applicable to the hosiery industry.
I think these discussions will provide a sufficient basis for our closing presentation, THA Celebrating 100 Years. This session will feature highlights of the association throughout its years of service.
We will also pay homage to those who have enabled us to Honor Our Heritage, Pioneer Our Present and Form Our Future.
During the convention, we will debut our dynamic book by the same name. We are incredibly proud of this publication, which is the culmination of months of hard work and careful research. The book covers the evolution of our association in its first century and provides an inspiration for the future.
I hope you treasure it as much as we enjoyed compiling and designing it; it is a true labor of love.
I look forward to seeing many of you on Hilton Head for a fabulous few days of honoring our heritage, pioneering our present and forming our future.
Sally Kay is president of The Hosiery Association, Charlotte, NC. She can be reached at firstname.lastname@example.org.
NORTH CHARLESTON, SC Nonwovens producer Polymer Group, Inc. said March 22 that it will install a new spunmelt line at its Mooresville, NC, facility to meet customer demand for its products in North America.
The company will install a Reifenhauser Reico IV spunmelt line targeted primarily the hygiene and industrial markets of North America. The company said it expects construction to begin at the existing site by the end of April and commercial production is planned for the second quarter of 2006.
This new line will provide customers with high-quality, fine denier materials that are softer and lighter than products available from conventional technology and have improved barrier qualities, according to PGI.
Additionally, the line will be capable of proprietary processes and will offer advanced treating systems, the company said.
Separately, the company announced that it will increase prices on its products globally due to significantly higher raw material costs.
CLIFTON, NJ Greenville Colorants, one of the largest independent dyestuff suppliers in the U.S., announced the opening of its processing and distribution facility in Greenville, SC.
This technologically advanced 160,000-square-foot plant is situated on more than 15 acres, with excellent logistical access to all its customers. It contains extensive blending equipment for both powder and liquid products, as well as the full-service labs the company requires to support its expanding sales in the textile, paper, leather, plastic and ink industries.
A documentary film that examines the current jobless recovery and includes a report from Kannapolis, NC, is available on DVD.
Greg Spotts, the filmmaker, takes a number of trade issues and their impact on the U.S. as he takes viewers to the former headquarters of now-defunct textile maker Pillowtex Corp. Included are interviews with several laid-off textile employees.
The documentary also takes a look at the outsourcing of information technology jobs from Seattle and Orlando, as well as investigating the battle for the passage of the North American Free Trade Agreement in the halls of Congress.
Spotts, a Yale graduate who lives in Santa Monica, CA, also has written a companion book, CAFTA and Free Trade: What Every American Should Know, which scrutinizes the Central American Free Trade Agreement.
For more information, visit www.americanjobsfilm.com.
CARY, NC Following its annual meeting of members and board of directors on March 29 [TC]2 will host an open house and reception celebrating its 25 years of service to the sewn products industry.
During this event, some of the founders and long-term supporters of [TC]2 will reminisce about how the company began and how it has evolved into the present-day organization.
Sponsors of the event include American & Efird, Asheboro Elastics, Cognis Corporation, Cotton Inc., Eton Systems, Gerber Technology, Lectra Systems, Methods Workshop, New Generation Computing, Paxar Corp. and SPESA.
[TC]2 provides solutions for the soft goods industry specializing in technology development and supply-chain improvement.
GREENVILLE, SC Schmidt Mfg. Co., Inc., based here, announced the sale of another BECA wrapping machine line in the U.S., this time to Russell Corp. of Alexander City, AL.
The new equipment will be installed in early summer as a complete replacement of the existing wrapping system.
The wrapping machine will be available to completely enclose the fabric in a highly resistant poly film wrap by featuring a thermal seal along the length of the bag, and seal the ends of the bag with an ultrasonic welding device.
This machine represents a brand new design, completely integrated and entirely automatic. Customized to the need of the plant, as typical with BECA, it will use less floor space than previous models, but will still allow for future expansions as needed.
BECA, a leading European producer of packing equipment, poly-bagging machines, inspection tables and conveyor systems, is represented in the U.S. by Schmidt Mfg. Co.
Russell Corporation came to us with challenging expectations, said Gino Cara, director of BECA. Our wrapping line of a new design will take care of their present production and will be adaptable to their future needs.
BECA has always focused on customer service and on the quality of its machines that are, for example, equipped with Allen Bradley PLCs and Branson Ultrasonic heads, he added. In the United States we have chosen to work with Schmidt Mfg., who has proven itself very reliable and very customer oriented.
GREENSBORO, NC Dawson Textile Machinery, which represents Dr. Otto Angleitner (DOA) of Wels, Austria, announced that DOA has engineered, built and sold a new thermal bonding oven to complement its sheet forming line.
The oven was developed not only to handle the extremely high production of DOA sheet forming lines, but also to be able to apply up to 250 kilos pressure per cubic meter, Dawson said.
This enables customer to produce new products, the U.S. representative added.
PATERSON, NJ Glenro Inc., based here, and TRCM of Maysville, KY, have consolidated operations.
The name of the consolidated entity is Glenro Inc. and the manufacturing operations in Maysville will be the TRCM Division of Glenro Inc.
Since 1988 TRCM, a contract manufacturing company, has built hot air dryers and thermal oxidizers that Glenro has sold, designed and engineered. More recently, TRCM has also been manufacturing Glenro flatbed laminating machines.
Glenro has manufactured infrared heaters and ovens in New Jersey since 1958 and in Paterson since 1979. TRCM is now expanding and manufacturing some of Glenros infrared heaters and ovens.
Dr. Kay Obendorf, professor of textiles and apparel at Cornell University, has been elected president of the Fiber Society, being elevated from vice president.
Dr. Phil Gibson, materials research engineer with the U.S. Army Soldier Systems Center, is the new vice president.
Dr. Subhash Batra of the College of Textiles at North Carolina State University, has retained his position as secretary.
Dr. Bhuvenesh Goswami of Clemson Universitys School of Materials Science and Engineering continues as the Societys treasurer.
Obendorf stepped into the presidents position at the conclusion of Dr. Bill Hailes term at the end of last year.
Obendorf devotes herself to research in the field of fiber science, specifically in the areas of protective clothing, morphology, dye diffusion and detergency. She serves as associate dean for research in the College of Human Ecology at Cornell University and is active in numerous textiles-related professional organizations.
Before joining the U.S. Army Soldier Systems Center as a materials research engineer, Gibson served in the U.S. Air Force as a senior rocket propulsion engineer at the Air Force Astronautics Laboratory, where he conducted research on solid rocket propellants.
Gibsons work for the army has included research on computational and experimental heat and mass transfer through porous materials, on ballistic protection, on the develop ment of novel chemical protective uniform materials and on blast protection. He has written or contributed to more than 200 publications and three patents.
Additional members assumed positions on the Societys Governing Council. They include: Dr. Kyung-Ju Choi, AAF International; Dr. Mike Ellison, Clemson University; Dr. You-Lo Hsieh, University of California-Davis; Dr. Thomas Godfrey, U.S. Army Soldier Systems Center; Dr. H. Young Chung, Donaldson Co., Inc.; and Dr. Gajanan Bhat, University of Tennessee.
FORT MILL, SC Springs Industries, said March 16 that it will close two fabric weaving plants, consolidate another plant and invest $10 million in its remaining weaving plant in Chester County, SC. About 700 jobs will be affected.
Despite last years good performance and the investments Springs has made to stay competitive, recent events have affected expectations for our bedding business, said Tom Gaffney, executive vice president and president of the companys bedding business.
He said the removal of quotas on Jan. 1, has created significant pricing pressure as new suppliers throughout the world now compete for access to the U.S. marketplace.
As a result, world prices for products like those we make are falling significantly, which means we must act now, Gaffney said.
The company will add new technology and relocate equipment from other Springs facilities to Katherine Plant as part of its strategy to adapt to a smaller number of highly flexible facilities that can compete in a global environment, the company said.
Springs will close the Elliott and Frances plants in Fort Lawn, SC, on or about May 15 and July 1, respectively. The facilities weave bedding fabrics and together employ about 250 people.
At Grace Complex, about 450 employee jobs will be affected as fabric finishing and sewing capacity is reduced in phases, mostly during the summer and into the fall. Normal turnover and attrition during this time frame will create some job openings, Gaffney said, and the company will try to find opportunities for all affected employees.
About 3,000 people will be employed by Springs in Chester and Lancaster counties after the layoffs take effect.
In December, the home textiles giant said it would shutter close plants in Lyman, SC, and Anderson, SC, early this year, putting 540 people out of work.
Gaffney said Springs continues to carry out strategies to remain competitive in a rapidly changing environment.
We believe our U.S.-based facilities can be a competitive strength, and we will compete by balancing what we make in our U.S. plants with what we buy so we can deliver products to customers faster than any overseas supplier, he said.
GREENSBORO, NC VF Corporation announced March 21 that it has signed a definitive agreement to acquire all the outstanding stock of Reef Holdings Corporation from an investor group led by majority shareholder Swander Pace Capital. Terms were not disclosed.
Reef is a leader in the growing action sports lifestyle market. The company, a producer of premium surf-inspired footwear, in 2004 launched an authentic surf apparel line.
Reef had sales of $75 million in 2004, excluding royalties, and is looking forward to another year of double-digit growth. Reef is expected to contribute about $45 million to sales, be neutral to earnings per share in 2005 and accretive in 2006, VF said.
Reef will remain headquartered in San Diego and will become part of VFs expanding Outdoor coalition, headed by Eric Wiseman, vice president and chairman of VFs Outdoor and Sportswear Coalitions.
Outdoor coalition sales exceeded the $1 billion mark in 2004, and have grown nearly seven-fold over the past five years, the company said.
RALEIGH, NC Cotton Incorporated, an organization dedicated to the advancement of the cotton industry, announced that it is supporting the commercial development of HueMetrixs Right First Time dyeing systems.
Under the terms of the arrangement, Cotton Incorporated will provide HueMetrix with facilities and equipment at its world-class laboratory and pilot plant facility in Cary, NC. This collaboration will enable HueMetrix to accelerate the commercialization of its dye exhaustion monitoring and shade control systems that optimize the dyeing process, thereby increasing shade consistency and lowering operational costs associated with dyeing cotton-based goods, HueMetrix said.
We are impressed by HueMetrixs technology and believe that it will help the cotton industry by enabling dyers to better control their exhaustion processes to more effectively and efficiently dye cotton products, said Don Bailey, vice president of Textile Research and Implementation at Cotton Incorporated.
HueMetrix is excited about the confidence Cotton Incorporated has shown in our company, said HueMetrix CEO Russell Thomas. It is an industry leader focused on growing the cotton industry through leading-edge research and promotion, and their support of our product development activities enable us to build better systems and get them to market faster.
By Odyll Santos
Exports of U.S. cotton are expected to continue providing support to New York futures prices, which recently experienced a significant drop following gains that have occurred since early February.
Through mid-March, cotton prices appeared to be experiencing a corrective phase following a rally that lasted several weeks. In one trading day during the week ended March 18, May cotton futures fell the 300-point limit after having risen to more than 54.20 cents per pound.
The market moved toward levels that seem more acceptable to mills. In comments written on March 18, cotton marketing specialist O.A. Cleveland noted that the 52.00c level in May futures appeared to be an attractive area for cotton buyers. While higher prices had run some mills out of the market, export demand had been acceptable (to) better-than-expected all the way up to 52.00c. He said that when most of the trading occurred above 52.00c, export sales of U.S. cotton slowed down dramatically.
USDA export data indicate that foreign demand for U.S. cotton remains at a respectable level. Data for the week ended March 10, which were released on March 17, showed that net upland cotton sales were 121,900 running bales. Sales were 33 percent below the previous week and the prior four-week average. China was a notable buyer at 108,400 running bales, including changes in destination from Hong Kong at 52,800 running bales. Other buyers were Pakistan, with 11,500 running bales, Thailand with 8,300 and Mexico with 8,100.
Shipments for the week totaled 297,400 running bales, 13 percent below the previous weeks marketing-year high and 1.0 percent below the prior four-week average. U.S. cotton shipments went mainly to Turkey with 68,000 running bales, Mexico with 55,800, China with 42,700, Indonesia with 25,400, South Korea with 15,300, Pakistan with 14,500 and Thailand with 14,200.
Cotton observers continue to see Chinese demand for cotton as a major supportive factor within the U.S. cotton market, contributing particularly to strong export sales. Cleveland said China would have to continue buying an average of over 100,000 bales per week to support the U.S. cotton market.
Shipments and sales were expected to continue to be strong in the following week, ending March 17, amid a higher weekly payment under the Step 2 program, which pays mills and exporters for buying higher-priced U.S. cotton.
In its latest supply/demand report, USDA raised its projection for U.S. exports in the 2004-05 marketing season to 13.2 million 480-pound bales. It increased exports by 200,000 bales based on strong sales.
Looking beyond exports, 2005-06 acreage also is likely to contribute support to the market, particularly to the December futures contract. Many farmers in the Cotton Belt plant their crops in the April to May period. With planting time nearing, the market is edgy as the traders view the weather, demand and the fact that world plantings will be off, Cleveland said. U.S. planted acreage should range between 13.8 (million) and 14.0 million acres.
That is above the 13.66 million acres planted in the 2004-05 season. Cleveland noted that farmers in all U.S. regions, except the West, would not find many crops as good alternatives to cotton and would likely opt to plant cotton, increasing their acreage.
By Devin Steele
IF YOU WERE to design globalization in the form of an NCAA tournament bracket, the China Red Dragons and the United States Eagles would both get No. 1 seeds, but you know where most bettors money would go. Everyone, even the U.S. government, it seems, would likely pencil in the Peoples Republic as the ultimate winner when the shakeout of the world order is complete.
China already has captured the lions share of the worlds manufacturing base, is strengthening its military and is the worlds largest recipient of total foreign direct investment. Indeed, the communist country of 2.3 billion people (yearning to be free, we might add) is the whole package. Especially when it comes to manufacturing. China is the Swiss army knife of production able to cut your sheets, sew your jeans, assemble your circuit boards, mold your Barbies, craft your cabinets and, to celebrate their success, open a bottle of champagne. (Or a can of whoop-butt.)
AND NOT BY accident. As Cass Johnson pointed out this month, Chinas development into a manufacturing super power has been well-planned. Johnson, president of the National Council of Textile Organizations (NCTO), said during his presentation to the Textured Yarn Association of America (TYAA) that China aimed its meticulous strategy, first at foremost, at becoming the dominant textile and apparel supplier in the world. (Mission accomplished.) He noted that:
Chinas textile sector employs directly or indirectly 90 million people;
China has 3,700 textile plants under production; and
Chinas apparel sector makes 20 billion garments a year.
And growing on all fronts. (Appropriately, Johnson titled his speech Surviving China rather than Chicken Soup for the China Worriers Soul.)
In short, Chinas goal is to be the world leader. On all major fronts especially economically and militarily. Period.
AND WERE LETTING it happen despite Chinas means of advancing in the globalization tournament. As Johnson noted as he peeled back the onion, Chinas government pegs its currency about 40 percent below the dollar; extends loans that never have to be repaid; subsidizes energy costs, shipping costs and state-owned enterprises; provides tax rebates for exported goods; offers land giveaways and income tax holidays; engages in intellectual property rights theft ... (As far as we know, Johnson is still trying to peel back that onion. Dont it make you want to just shed a tear?).
And China has won supporters by being masters at sleight of hand. China is like the Harlem Globetrotters beating the Washington Generals again and again and again, dribbling circles around the U.S. (and the rest of the world, for that matter), throwing behind-the-back passes, duct-taping opponents rims, turning up the heat in the gym, goal-tending and hitting audience members (consumers) with nothing more than a pail of confetti (created, perhaps, from shreds of paper on which world-trading rules were printed.)
China easily won allies in the Wal-Martians and their ilk, in spite of the quality of their products (motto: No Worky, Worky). And China has gained advocates around the world with index-and-definitely-middle-fingers-crossed-behind-its-back handshakes. Please, please, please, let us into the WTO, they implored. Well be good boys and play by the rules. We wont transship our products. We wont steal intellectual property. We wont manipulate our currency.
Suckers, they probably added. So now China, which once had its nose pressed against the showroom window, has full access to the world and is looting the place. And the Red Dragons are heavily favored to take home the big prize of this global competition. Wouldnt it be nice if we could tear up our brackets and start over?