Wednesday, February 17, 2016

Chinese textile firm opens up in South Carolina to reduce costs

Comparative advantage can shift both ways also proving some people will never be happy (WSJ):

But Keer executives said they realized that the gap in wages between China and the U.S. was narrowing, plus South Carolina had cheaper land, energy and raw cotton than China. Keer opened its first plant in South Carolina last year and now employs about 180 people, said Lilian Chang, a sales executive at the South Carolina plant. Over time, it wants to add four more factories and build up its workforce to 500.

“What we lack (in South Carolina) is professional technicians” to run the company’s automated spinning machinery, Ms. Chang said. One reason the U.S. textile industry had such big layoffs, economists say, is that the industry became so automated that it needed far fewer workers to run computerized assembly lines.

For some in the Palmetto state, the investment by the state’s one-time archrival is worrying, despite the jobs the companies bring. The Chinese investment “is a sign of weakness,” said Jim Jamborg, a Little River, S.C., postal worker. “The Chinese are coming in and American businesses are moving out.”

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