Guangzhou’s largest garment manufacturing village, Kang Le Lujiang, once gathered tens of thousands of small and medium-sized handicraft factories and garment factories with about three to four hundred thousand workers. However, now with the economic downturn, garment business has plummeted, and the market is becoming increasingly sluggish.
Online videos show that in Guangzhou’s largest wholesale garment market, which should have been bustling in October, there are few people, with some stalls even covered with curtains and no vendors renting them. On the main road of Kang Le Lujiang, there are many advertisements for garment factories for transfer, and very few advertisements for hiring workers can be seen.
Industry insiders say, “Golden September and Silver October, supposed to be the peak season, is not prosperous.” The garment village with tens of thousands of garment workers is facing a severe off-season, and the once brilliant clothing industry is a thing of the past. “Can’t find work, just paying rent here every day, struggling to make ends meet. Can’t stay in Guangzhou anymore, just consuming savings here, paying rent, and feeding the landlords.”
According to a factory owner in the video, garment processing factories are a traditional industry squeezed for profit. If the workers’ unit price is too low, they won’t work; if the customers’ unit price is too high, they won’t accept orders. Rent increases every year, and the profit margins are getting lower. During the off-season, facing losses of tens or hundreds of thousands; during the peak season, wages need to be increased; when some customers disappear, the processing factory becomes the one left to pick up the pieces, working for years with little to show for it. Unless it’s a big factory with super customers, ordinary factories are busy from early morning till late at night, barely getting by.
He suggests that people who haven’t come to Guangzhou yet should wait and see. At this moment, the clothing wholesale markets don’t have any business, and clothes made there aren’t being worn. In the garment village of over three hundred thousand people, one person can produce 100-1000 pieces of garments a day during the busy season. Nowadays, most people can’t even wear out the clothes they have before they buy new ones, which can last for several years.
He introduced that the area is being renovated and only some factories in Lujiang, Kang Le, and Jiuzhou are still operating. Garment factory owners are waiting on the roadside for customers, but finding customers is difficult; some wait for a day, ten days, or half a month without success, occasionally snagging a customer like fishing.
The factory owner revealed that for the piecework laborers, the current unit pay is too low. In the past, they could earn 6-7 yuan for making a shirt, now it’s 4 yuan and still attracts a crowd; for making a collar used to pay 60 cents, during the peak season it would be 1 yuan, but now can’t negotiate down from 80 cents.
As for the employers, the situation of hiring is “many wolves with little meat,” with daily wage below five to six hundred yuan, many people won’t work, and under three hundred yuan, they can’t find workers at all. Workers don’t want to work, and factories can’t find employees, creating a difficult situation for both.
Journalists randomly dialed the factory numbers in the video, some showing as unreachable. A garment factory owner told the reporter that they’ve been in business for about ten years, and due to the poor market conditions, they are not busy now. Currently, there are thirty cutting table workers in the factory, and the positions are stable, so they don’t need to recruit externally as the daily wage for piecework is high.
“The cutting table workers have been working for many years, mostly on monthly wages without insurance. Clothes are usually exported, to foreign clients from Russia, Amazon, and domestic markets like Guangzhou stalls, Shisanhang, Wanjia wholesale markets, mainly relying on exports,” he said.
The owner of a sweater and T-shirt manufacturing factory in Kang Le, Guangzhou, told the reporter that there are too many clothing factories closing down now. “In the past, we worried about not having enough orders, but now with too many orders, new worries arise. Workers need monthly wages, customers demand credit terms for a month, and we need loans to pay salaries. It’s tough, many orders have low profit margins, rent can’t be covered, going down to zero profit. We focus on business with the Middle East, where the prices offered by customers are very low. There are higher prices available, but can’t attract them, the whole industry is in a similar state.”
Guangzhou’s Kang Le and Qiaonan Xinjie were once the “paradise” for migrant workers, where some worked fifteen to sixteen hours a day, but with daily wages, workers could earn money. Some could earn over 500 yuan a day in technical positions. Nowadays, people are looking for jobs that could earn them 500 yuan in the morning, then settle for 400, 300, or even 200 yuan in the afternoon. Job opportunities are scarce, with few recruitment notices attracting a crowd, making it challenging to find employment.
A worker from Kang Le Lujiang garment village in Guangzhou told the reporter, “Now there are too many people looking for jobs, many can’t find work and end up unemployed, just hanging around here. Many people this year haven’t made money, can’t afford meals, can’t pay the rent. They don’t want to come back next year, preferring to find work in their hometown where at least there’s a hot meal waiting.”
“To the job site (where many garment workers look for jobs), only a few are hiring pieceworkers, with very low pay, only a few cents per piece. After the Mid-Autumn Festival, it’s also hard to find people making clothes anymore. I make pants and hope to find a stable position for two months, then I’ll go home for the New Year.”
Internet personality “Brother Jie,” who used to work as an extra in Beijing before coming to Guangzhou garment village to work and film videos for views, says he worked nine hours to sew seams on a garment and earned 225 yuan. In May this year, “Brother Jie” announced his unemployment, mentioning the severe market situation. Even with ten thousand people coming out daily looking for work in Guangzhou’s largest garment piecework market, the visible hiring bosses are few, probably just around fifty or sixty.
“If each boss hires fifteen people, only around 300 can find work, and 97% can’t integrate into the piecework lifestyle. Ten people are crowded around each position, struggling to get in.”
“Brother Jie” reveals that piecework in Guangzhou is his main income source. With no work, there’s no guarantee of food and clothing. When unable to find work, he feels lost, hanging around in Guangzhou just wearing himself out. “This kind of work is a precarious livelihood.”
Recently, he finally chose to escape Guangzhou and go to Vietnam to seek opportunities. “The piecework bosses in Guangzhou garment village can’t support me anymore.” “Brother Jie” said that piecework in Guangzhou is an illustration of the current economic situation – with a downturn, “many people but few jobs to find.” The constant struggle between looking for work and not finding any, internal struggles and anxieties only on the edge of subsistence…
The aforementioned industry expert analysis believes that live streaming with high return rates, as well as unseasonably warm weather, are contributing factors to the severe decline in garment business. Quality is also a major issue, with no quality checks, completing tasks fast, with no other significant advantages.
Social observer Qiao Feng (pseudonym) in an interview with Da Ji Yuan said that the difficulty in finding jobs now is widespread, as companies lack orders, lay off workers, and shut down. If this continues, the phenomenon of workers being unable to find jobs will only increase. With the economy deteriorating to this extent, it is the consequence of economic recession, compounded by a large outflow of foreign investments.
“At present, finding jobs in any industry is difficult, facing risks, doing foreign trade is slightly better, but the domestic circulation is basically stuck, even the catering industry is closing down. Many of the restaurants around me have closed, factories have shut down, and people have gone back home,” he said.
Qiao Feng believes that the temporary truce in the US-China trade war is just that – temporary. In the long run, this is not a solution, as the domestic circulation is dead, relying solely on a bit of foreign trade. If foreign trade also becomes obstructed, there will be no way forward.