11th November 2020
UK government still hasn’t produced a lorry drivers’ guide
The next set of misguided predictions in 2014 – usually presented as outright facts – were that the world was populated by Chinese garment and textile tycoons desperate to escape their business-unfriendly nation.
Here’s a sentence that could have come from any representative of any country incapable of developing its own garment or textile business. “China’s textile industry is losing its share in the world market and it is very much interested in relocating production facilities to Pakistan to export from here.” It took me just 22 seconds to find among 476,000 similar examples of self-delusion Google returned.
Although it is frequently claimed that most Chinese garment making companies are relocating abroad, it is impossible to find any serious attempt to work out how many have.
In the Clothesource database, there are 17,689 factories in China listing some kind of garment making capability – but just 189 of Cambodia’s 994 GMAC members have any Chinese finance. Our best estimate is that outside Greater China (People’s Republic, Taiwan, Macao and Hong Kong) there are at most 1,000 garment factories in Asia financed by businesses controlled from Mainland China.
We have been unable to find a single significant example of a Greater China garment making business that has gone so far as to close its Chinese operations and open elsewhere in the world. In autumn 2014, though, some other things were apparent:
But Tainan is showing no interest in reducing that formidable Chinese capacity
Yet, five years after moving to Africa, and allegedly now claiming it has a “foothold in seven African countries including Nigeria, Ghana and Tanzania“ Yuemai has just 2,600 African workers – half its claimed global workforce, but fewer than a single serious Chinese factory. It provides no data for African sales or profits.
The official announcement of the development limits itself to a pilot phase of importing equipment from China and training 200 staff, though it quotes the promoters’ “recruiting 200 workers by September 2014.” No-one gave any indication where the $10 mn would come from, or whether C&H Garments actually existed.
Though this project has since maintained an “undead” existence, occasionally being referred to on news aggregation sites as a real factory, September 2014 passed without any evidence of any workers being recruited. No more has been heard of C&H Garments. Ms Hai is now described by a United Nations website as a “Goodwill Ambassador for the UN Industrial Development Organization (UNIDO) and adviser to several African leaders on industrialization.”
Both the Ethiopia/Kenya project and the Rwanda one may have some grounding in reality, and simply be taking longer than anyone expected to show any signs of life. Or they may both be the figments of delusional publicity-seekers, or of journalists seeking a story. It is impossible to tell in these two cases: but the recent story of Ningbo Shantex casts some light on another explanation:
Rarely daunted by boring things like facts, though, China’s state-controlled media waited a couple of weeks (boring stuff like deadlines don’t matter much if you’re a journalist with a government-imposed mandate to tell then people what the dictator wants them to hear) before dreaming up an extraordinarily different story.
According to Ecns.cn, an online version of the Chinese Communist Party’s People’s Daily on February 3, “the international business news is once again dominated by Chinese companies’ overseas investment and expansion plans. ” Because “Chinese textiles group Ningbo Shantex Co Ltd may make a takeover bid for United Kingdom-based apparel chain Phase Eight.”
Maybe I only read specially censored editions of the WSJ, the Financial Times, Bloomberg or The Economist. Maybe in Beijing, where Ecns.cn is based, a one-off, three week old, 15 second piece on Fox TV’s UK sister company Sky, counts as “dominating the international business news.” But somehow I missed the excitement about the possibility a zipmaker in Ningbo with half a dozen staff, no experience of running a shop and a turnover of less than $5 mn (that’s how Ningbo Shantex describes itself) was going to buy a business a real retailer had just spent about $330 mn (or at least 60 years’ worth of Shantex sales.)
But they think differently in China. Six weeks after she’d been due to open her garment factory in Rwanda, with not a hint of those 200 workers she’d said she’d recruit. Helen Hai (a former actuary) was summarising the difference between how Chinese and Europeans see business. “The Chinese are willing to jump at an opportunity, not study it at length from outside like in Europe” she told an audience.
Which of course is our problem. We do insist on things like honouring commitments, hiring staff we say we’re going to hire, raising funds and getting buildings put up honestly, and safely. We do have this quaint belief there’s more to doing business than jumping.
Chinese state apologists, on the other hand, see bold action as a benefit in itself. Whatever the consequences. By the following morning, Ecns.cn’s fantasies were being reprinted around the world by other journalists too lazy to check the claims.
The instinct to show any interest in anything by anyone Chinese as evidence of Chinese gold arriving immediately seems universal: in November an innocent remark by Gao Jung, vice-president of the Chinese Confederation of Associations of Clothes and Textiles, that his members were “interested in importing textiles from Kyrgyzstan” was publicised as “People’s Republic of China to enter the textile markets of CIS through Kyrgyzstan”
Many textile and garment businesses, both in China and elsewhere in Asia, see more scope for new investment outside China than in it: but businesses continued to expand in China as well during 2014. The ideas they are all leaving China, or constitute a soft touch for other countries’ pet schemes, are both equally unrealistic.
As with most of these Next Big Things, there’s more to this than just denying the sillier stories. Ecns.com did get one thing right.
Chinese businesses are looking abroad to make things, to buy things and to sell what they’re making – and doing so will expose their management to all sorts of new influences. That Chinese overseas investment and expansion really will result in a large injection of international business cultures and styles into the way things are done in China – which will probably start with a lot less mindless jumping around and a fair bit more of that studying things at length Chinese like Hai despise so much.
But it’ll probably change the Chinese a lot more than the Chinese will change the places they’re likely to invest in. Especially if they study a few things at length before shooting their mouths off.