by Ms. Qiu is down on a day market for workers in Panyu, an urban village on the outskirts of Guangzhou. She is looking for a local factory that she will set for the day to sew down to sewing and dressed tops and dresses that are bundled on China’s e-commerce platforms or for export to western buyers. But she is not very lucky.
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“The entire industry is fighting a high tariff for Chinese goods due to the trade war. Many foreign customers have reduced their orders from China,” she says, refusing to give her first name.
Guangzhou, China’s southern metropolis and the capital of the province of Guangdong, houses almost 20 million people. It is also the buzzing, buzzing and buzzing heart of the global fast fashion industry. In his urban villages, dilapidated settlements that were included in the spread of the city, millions of workers effort and night in informal workshops for the production of cheap clothing. In a small, crowded factory, women sit behind sewing machines next to the mountains of strengthened black tutus. In another case, pink denim jeans, which are to be determined on the almost fashion website Shein are stacked on every available worktop.
Every morning, the workers gather in informal labor markets such as those in Panyu to see if they find work for the day, hundreds of buttons are sewn or iron hundreds of collar. Depending on the complexity of the task, the workers earn between one and 10 yuan per object that tested for a long time under cramped conditions.
“This is hard earned money,” says a worker in the sixties in Datang, another urban village about ten miles north of Panyu. Ironed jackets at 8 a.m. before she had packed it to export, and the man who refused to name his name was partly due to a layer that had started at 11 p.m. the night before. He earned two Yuan per jacket, he said. More than a dozen clothing workers who were interviewed by the Guardian said that a normal working day was 10 to 12 hours, and some said they had only taken a day off every month.
“Small room for profit”
While the domestic e-commerce market of China has been booming in recent years, it is overseas that the factory lights stop. Around a quarter of the more than $ 100 billion textiles and clothing came from China last year. According to the global commercial and industrial growth laboratory, Guangdong alone exported more than 7 billion USD.
But in April Donald Trump, the US President, started a trade war with China, who sent shock waves through the global economy. The tariffs for Chinese goods reached 145%, with China reacting with similar tasks and trade restrictions before the two countries agreed in a 90-day break in May. With a deadline on August 12, which stretches to achieve a deal, the workers in Guangzhou wonder whether they will be able to sell clothing to Americans or not.
In Panyu, Yang Ruiping has had his small clothing factory for two decades, which specializes in tops and employs around 20 people. About 30% of his orders are exported to Shein and Amazon of more than 50% before the pandemic. Although the break in the trade war has made pressure on his business easier, it still has “little confidence in the United States”.
“In the most recent US China trade war, when the tariffs rise, we have to reduce production costs to combat them,” he says. “It leaves little space for profit”. Without space to make wages lower, Yang says, he already loses money at every top that he sells. He always accepts the orders to keep the factory open, but since the domestic market is becoming increasingly competitive, he is aware that it may not be able to work much longer.
Shein is everywhere in Panyu. The company founded in China with the headquarters of Singapore revolutionized the clothing industry in Guangzhou, so that small manufacturers like Yang sell directly to western customers and offer buyer prices. While Big High Street brands operate larger, dedicated factories, Shein sets small batch orders directly with independent manufacturers and increases the production for the designs that sell well online. The flexibility of this model has fueled the company’s meteoric increase. According to Bloomberg Second Measure, a data analysis company, Shein accounts for around 50% of the US FASHION sector.
The company’s growth was also thanks to the gaps in the US customs regime, which made it possible to import free of charge. In 2022, more than 30% of all small packages that were imported under the so-called exceptional “de Minimis” came from Shein and Temu, another Chinese e-commerce company. On May 2, Trump closed this gap for goods from China and Hong Kong. This week he expanded this ban on goods from all countries, which means that suppliers cannot avoid the tariffs through shipping via third countries. A recently carried out analysis of Reuters showed that the prices for Shein rose by an average of 23% between April 24 and July 22.
The US market is “volatile and risky,” says Peng Jiersshen, the head of a medium-sized denim clothing in Zengcheng, another city villages in Guangzhou. “When the tariffs suddenly increased, the entire US production stopped. Nobody dared to continue.”
Experts say that the uncertainty of the trade war could have a negative impact on working conditions and encourage employees to increase their already criminal classes.
“When we talk about the clothing industry in China, the workers generally have no rest days,” says Li Qiang, founder of China Labor Watch, a NGO -based NGO. “You are paid after the unit price. So you work as much as possible if the orders are still there.”
But the factory bosses in Guangzhou say that the trade war is only the latest in a number of problems with which their industry is faced. Global conflicts and low consumer expenses in China mean that it is difficult to move away from the USA and other markets.
Li jun, a chain smoker factory boss, carries out a jeans clothing factory that sells jeans to Russia. He says that the economic effects of the war in Ukraine and the fact that many of his potential customers were confiscated for the fight in the conflict were bad for business. “The economy is not going well anywhere,” he says. “Many factories are closed.” At his climax, he exported 100,000 pairs of jeans per month, with more than half going to Russia, but now it is 30,000 to 40,000 pairs a month, which means that he brings just to break.
Manufacturers in places like Guangzhou have long been the machine room of China growth. But in recent years, Beijing, which the label of the global factory is handing over, has poured all its political and economic support in hi-tech industries such as artificial intelligence and semiconductors. “The Chinese government no longer supports this type of light industries or small sole proprietorship,” says Li. “It is really difficult to keep things going”.
Additional research by Lillian Yang
