Chinese Investments In US Creating Jobs, Cotton Demand

Economy

Chinese Investments In US Creating Jobs, Cotton Demand

China's Shandong Ruyi is investing in a gigantic textile factory in Forrest City, Arkansas, in USA. The Chinese industrial giant will create 800 jobs, and create massive demand for local cotton. In fact, the project will consume nearly all the cotton the state grows each year.

The project was announced in May by the Arkansas Economic Development Commission and production is projected to begin in mid-2018. Shandong Ruyi officials said the company expects to process 200,000 tons of Arkansas cotton annually, and Arkansas cotton farmers produced about 840,000 bales in 2016.

A cotton bale is 500 pounds. How will that affect other commodities grown in Arkansas? How will it affect land use? In other Chinese-textiles-in-Arkansas news, Bloomberg Businessweek recently profiled the factory to be opened in Little Rock in 2018 by apparel manufacturer Tianyuan Garments Co. That deal was announced last fall by AEDC.

The state is giving economic incentives to both Shandong Ruyi and Tianyuan Garments, which will create about 400 jobs at its Little Rock plant. Why exactly are Chinese companies opening plants in the US when labour in China costs so much less than labour in America? The answer could be automation.

The US produces robots that can do the job cheaper, and with fewer complaints, than any human, Chinese, American, Mexican or otherwise. "Around the world, even the cheapest labour market can't compete with us," Tang Xinhong, the chairman of Tianyuan, told the China Daily about the factory in July. The company, one of the biggest apparel makers in China, supplies Adidas, Armani, Reebok, and other major brands. "The Tianyuan story shows that the labour cost for each T-shirt in the Arkansas plant is unbeatable," says Jae-Hee Chang, a researcher in advanced manufacturing at the International Labour Organization (ILO) in Geneva.