On July 26, 2012, David Pierson writes in the Los Angeles Times that Li Guilian has built Dayang Trands into a $300-million company that tailors clothing for some of the world’s most famous brands and powerful people.
If Horatio Alger had spoken Mandarin he would have loved the rags-to-riches tale of garment maker Li Guilian.
A farmer’s daughter who got her start stitching aprons in the countryside, she has built a $300-million company that’s listed on the Shanghai Stock Exchange. Now 66, Li employs 10,000 workers sewing fine clothing for some of the world’s most famous brands and powerful people.
Over the past few weeks she’s watched the American backlash over those uniforms’ made-in-China labels with a mixture of astonishment and dismay.
“I have a simple question,” said the bespectacled, raspy voiced Li in an interview at company headquarters in this industrial seaside city in northeastern China. “Can America really make the suits we make? We have cheaper costs here so you can have cheaper prices in America.”
Most garment manufacturing left U.S. shores long ago. Low-cost Chinese goods, they reason, have helped American families stretch their dollars.
Nearly half the clothing in the U.S. today is made in China, while nearly all the rest is manufactured in other countries such as Vietnam and Bangladesh, said Daniel Ikenson, an economist at the CatoInstitute in Washington.
China’sapparel exports in 2010 were worth $121 billion. Despite rising wages and competition from other developing nations,China’smanufacturing infrastructure remains unrivaled, experts say.
“Whether the U.S. could ever do again what China is doing now, it seems highly unlikely in the next decade or two,” said Ken Perkins, President of esearch firm Retail Metrics in Swampscott, Mass. “There are virtually no firms that would be willing to invest in new plants, spinning and weaving infrastructure in the U.S.”
It would be hard to compete against companies such as Dayang, whose founder Li is the embodiment of China’seconomic miracle.
Descended from a long line of farmers, the country girl spotted opportunity 33 years ago as Communist China was beginning to test free-market reforms. She opened an apron and tablecloth factory in her home village of Yangshufang, gradually shifting to more complex garments.
Today the company makes 5 million suits a year — a good portion of them for American brands including Macy’s, DKNY and Banana Republic.
Li said her skilled workers earn $6,300 to $9,500 a year — good by local standards, but a fraction of American labor costs. Elevator music piped into the factory floor to soothe the workforce is all but drowned out by the relentless hum of sewing machines.
If the United States is ever to restore our once mighty economic power then we need to fully embrace the “machine age” and unleash the full productive power of the non-human factor of production embodied in our business corporations––intelligent machines, superautomation, robotics, digital computerized operations etc––the assets of which are broadly owned privately and individually by ALL American citizens.
One actionable policy should provide that any government contract or loan guarantee be only awarded to American companies who, through the government award, expand their ownership to their employees.
Still another short-term action, to reinvigorate “Make It In America” and “Made In America,” is the government should create financial incentives and tax provisions to reward American companies that bring manufacturing back to the United States from abroad, promote manufacturing investment, and incentivize more investment by foreign companies, all with the condition that the employees will share in the ownership benefits generated by the new capital formation projects. The result will be more broadened employee ownership and in-sourcing of jobs created by the new capital formation projects, and make America self-reliant.
The government should impose robust import levies and tariffs (tax) on particular classes of imports that are determined to be manufactured outside the United States and exported back to the United States that do not qualify as “Fair Trade” and unfairly undercut an American-make equivalent. At present, American business corporations are increasingly abandoning the United States and its communities to invest in productive capital formation outside the United States, particularly in China, Mexico, India, and other parts of Asia. As a result, America is experiencing the deindustrialization of America. This has forced policy makers to adopt a redistributive socialist solution rather than a democratic capitalist one whereby democratic economic growth of the earning power of the citizens would flourish simultaneously with new, broadly-owned productive capital formation investments in the United States. Such overseas operations have the advantage of “sweat-shop” slave labor rates relative to American standards, low or no taxation, supportive infrastructure provisions, currency manipulation, and few if any environmental regulations––which translate to lower-cost production. Thus, producing the same product or service in the United States would be far more expensive. For most people, economic globalization means a growing gap between rich and poor, technological alienation of the labor worker from the means of production, and the phenomenon of global corporations and strategic alliances forcing labor workers in high-cost wage markets, such as the United States, to compete with labor-saving capital tools and lower-paid foreign workers. Unemployment is high and there is an accelerating displacement of labor workers by technology and cheaper foreign labor, resulting in greater economic uncertainty and unstable retirement incomes for the average American citizen––causing the average citizen to become increasingly dependent on government wealth redistribution programs.
We need a policy change, which assures truly “Fair Trade” and that exponentially reduces the exodus of our manufacturing prowess and invigorates America’s entrepreneurial exceptionalism and competitive spirit to create products and services in the spirit of “the best that they can be.” We need policies that will de-incentivize American multinational corporations and others from undercutting “American Made,” while simultaneously competitively lowering the cost of production through expanded capital worker ownership. At present, the various incentives in place do not broaden capital ownership but instead further concentrate ownership.
http://www.latimes.com/business/la-fi-china-olympic-uniforms-20120726,0,3380378.story
