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Talk of tariffs leaves factory floor unfazed

The textile industry may be in for a rude shock but with jobs aplenty, few behind the machines care

For garment worker Lin Lin, strange words like 'safeguard quotas' and 'export tariffs' are irrelevant to her busy life.

The Hubei native has little time to follow world affairs. To eke out a meagre living in an increasingly expensive Shenzhen, the 20-year-old has to toil for 11 hours a day, six days a week before the knitting machine at a garment factory in suburban Longgang.

At the end of each month, Ms Lin gets 880 yuan, or US$110, from the paymaster - barely enough to buy one of the Puma jackets which she helps put together every day.

But the young woman still counts herself lucky. Her employer, Tian Huang High-Tech Garment, which sells clothes to German sportswear giant Puma, is known for its generosity to workers.

'Some more experienced colleagues can make 1,000 yuan or 1,500 yuan a month. Every Wednesday we get a special meal. Compared with other garment workers with the same experience, I think my treatment is good,' she said.

Absorbed in her busy world, Ms Lin is oblivious to the news which is bound to have a serious impact on China's booming garment and textile industry.

Last Friday, the central government announced it would impose tariff increases of up to 400 per cent on 74 categories of textile exports. The move came two days after the US Department of Commerce said it would widen the scope of its 'safeguard quotas' to limit the growth of mainland textile imports. The European Union is also prepared to slap new quotas on Chinese textiles.

Washington and Brussels are blaming China for surging imports of cheap garments and textiles which have flooded their markets and threatened their local textile industries.

Commerce Minister Bo Xilai said quotas the US had imposed on three categories of Chinese textiles would cost the mainland US$1.26 billion a year in lost exports. Millions of jobs may be lost. But for Ms Lin, that prospect looks distant and unreal. She said she had no fear of losing her job.

'I'm not a bit worried. I think the boss knows what to do. In any case, I'm leaving and I will go back to my home town to get a new job. They are hiring everywhere,' she said

As economic prosperity is spreading from the coastal region to inland provinces, more migrant workers are heading back to their home towns.

Wang Fang , a colleague of Ms Lin's who is also from Hubei , said her friends in Wuhan now earned about the same as she did.

'The pay difference is not as big as before and the living expenses here are rising every year. If I go back, I can find a better job and can stay with my family,' she said.

'Working in a garment factory is very exhausting. I get regular back and shoulder pains. Our boss is nice but he told us he could not afford to raise our salaries too much as the competition is stiff.'

Factories in the Pearl River Delta have to fight for skilled workers as workers pack up and leave. Huge, red recruitment notices can be seen outside every factory door.

While the volume of mainland garment exports is surging, the lion's share of the profits is going to foreign importers, retailers and investors.

It has been estimated that one job is created on the mainland for every US$10,000 worth of exports, but that job, on average, only pays about US$100 a month.

Shen Yongfang, secretary-general of the Shenzhen Garment Industry Association, said self-imposed tariffs and foreign quotas were not the biggest threat to the industry.

'There would be some impact, but nothing too big. It's not a fatal blow,' she said. 'Most enterprises have already prepared for this as the rumours [of foreign quotas] have been flying around for quite some time.'

She expected most garment and textile factories in the Pearl River Delta to weather the storm.

'The increase of exports from January to March was a bit abnormal. Many exporters knew the quotas were going to be removed so they stocked up on a lot of products last year,' she said. 'That explains why we had such a huge increase in the first three months. Things are slowing down again now.'

Ms Shen said the garment industry would look to new markets and move up the production chain to offset the negative effects.

'We will explore new markets in other parts of the world. We have a huge domestic market as well. The most important thing is that we need to establish our own brand names to widen our profit margin,' she said.

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