MANUFACTURING

Trump factory jobs sent to China may never come back

Republican accuses mainland of undercutting US manufacturing industry, but as labour costs rise there, many companies are moving elsewhere

PUBLISHED : Thursday, 06 October, 2016, 11:19pm
UPDATED : Thursday, 06 October, 2016, 11:18pm

US presidential candidate Donald Trump has pledged to bring long lost American manufacturing jobs back from China. But he may be too late – even for products that bear his family name.

A Chinese company that makes shoes for his daughter’s fashion line is now moving production to Africa, where labour is much cheaper.

The billionaire tycoon has frequently accused China of stealing US jobs through unfair trade practices and currency manipulation, while simultaneously relying on the country to make Trump-branded goods. But the kind of work that goes into making such products may never return to America, the president of major footwear producer Huajian Group said.

“Some manufacturers can’t even survive in China anymore,” Zhang Huarong said, speaking in his office in the southern factory hub of Dongguan.

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His company has made about 100,000 pairs of Ivanka Trump-branded shoes over the years, ­according to spokesman Liu ­Shiyuan. In August, it filled an ­order for 20,000 – just weeks after Trump accepted the Republican nomination, with a speech vowing to bring jobs back to the US.

It is a goal Trump plans to ­accomplish by imposing a 45 per cent tariff on Chinese-made goods, but his focus could be ­misplaced: Zhang has become one of a growing number of Chinese manufacturers expanding to Africa and Southeast Asia in search of lower production costs.

In 2012, Zhang opened his first factory in Ethiopia. Four years later, he is building a billion-dollar facility there. Its production lines are already humming.

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“My goal is to create 30,000 jobs in Ethiopia by 2020, with exports reaching US$1 billion to US$1.5 billion,” he said.

Low-wage, low-skilled manufacturing jobs like those Zhang is sending to Africa are “being priced out of the Chinese market, which still pays wages far beneath even minimum wage jobs in the United States”, said Christopher Balding, professor of economics at Peking University HSBC Business School.

Labour actions have also exploded across China in recent years, up almost 19 per cent year-on-year to 1,867 strikes in the first eight months of 2016, according to the China Labour Bulletin.

Factory owners have found themselves squeezed between demand for higher wages and ­falling growth, as China’s economy expanded at its slowest rate in a quarter century last year and has continued to slow.

Now, for the price of one Chinese worker, Huajian can hire five Ethiopians, Zhang said.

“It’s a good thing that [Trump] is focused on American employment,” he said. “Question is, does he really want to make shoes?”