China-US Trade Tensions: Chinese clothing factories brace for impact

World
Europe

03:04

As the China-US trade spat gets uglier, the two sides have imposed steep new tariffs on billions of dollars of each other's goods. Chinese companies are quickly adjusting their overseas strategies to brace for the impact. CGTN's Han Peng reports.

China used to sell hundreds of millions of shirts to earn enough money to buy a US aircraft. This strenuous, sweaty labor of making daily items was once China's competitive edge in the global trade.

ZHOU GANG, FOREIGN BUSINESS MANAGER HODO GROUP "We have over 1,000 workers on our assembly lines. In a full capacity, they produce about 2,000 suits every day."

Now the model faces tough challenges. Labor costs are rising, and Washington threatens more rounds of tariffs on Chinese-made goods. Hodo Group is China's leading clothing firm.

American tariffs have not yet hit them directly. But the company's foreign business manager says they never know if they'll wake up tomorrow to a new tweet from US President Donald Trump.

ZHOU GANG, FOREIGN BUSINESS MANAGER HODO GROUP "35 percent of our exports go to the United States. Some clothing material is already included in the latest tariffs list, so we need to prepare for the worst. Many take the trade war as a risk, but we take it as a chance to change our business model."

In their headquarters, these newly hired designers are the company's future. He Minhui majored in fashion at a prestigious university in Paris. Her job is to DESIGN clothes for foreign clients.

HE MINHUI, DESIGNER HODO GROUP "Designing increases the added value of our products. We are trying to change China's image from a manufacturing giant to a design powerhouse."

But He admits it will take a while for Chinese designers to catch up with the world's fashion gurus. Meanwhile, the company is also aggressively embracing the domestic market, with China going through an unprecedented trend of consumption upgrades.

HAN PENG WUXI, JIANGSU PROVINCE In the past, the highest quality of these made-in-China clothes were often sold to the Western countries. Domestic customers bought the same brands, with lower prices and lower quality.

Today, Chinese customers are having a much stronger purchasing power because of the rising middle class, and they have become the new targets of these export-oriented firms.

The company's vice CEO says uncertainty is the nature of foreign trade for any firm.

DAI MINJUN, VICE CEO HODO GROUP "Because you can never control or predict what the market will look like tomorrow. We have gone through many downturns before, including the 2008 US financial crisis and the following Eurozone crisis. Each hit exports hard, but we focused on what we can do."

Resilience of Chinese firms and the no-quit attitude of Chinese workers are powering the nation's fight in the trade war. Han Peng, CGTN, Wuxi, Jiangsu Province.