A Light Christmas for China's Factories

As U.S. Consumers Slow Down Their Spending, Chinese Manufacturers Adapt or Shut Down

(CBS)  It's been a hectic year for Edward Kang. The head of one of China's biggest textile manufacturers relied on American customers like Eddie Bauer and The Gap to fuel his $70 million business. But now, CBS News correspondent Celia Hatton reports, flat-lining U.S. orders mean he's hustling to keep his sewing machines humming.

“We had to reorganize ourselves to adapt to this situation,” Kang said through a translator.

Normally, these workers would be rushing to finish clothes that would fill American stores this coming holiday season. But instead, they’re working overtime on jackets that will be sold in China. A 25 percent drop in U.S. retail orders means this company is switching more of its business to Chinese labels. Other manufacturers are following suit.

Kang's also opened LaGogo - a chain of stores across China that's breaking the company's dependence on foreign exports.

It is something toy manufacturer Peter Lee wishes he'd done earlier. His factory was busy with U.S. orders last December, but now it's on the verge of closing.

“We already finished Christmas items for America,” Lee said through a translator. “I only have a third of my workers left, just waiting to make things for Easter and Valentine’s Day.”

It's the same all over China. U.S. shoppers used to be the Chinese economy's salvation. Now, after years of double-digit growth, exports to America dropped almost 17 percent, compared to the first nine months of 2008 -- almost a $32 billion difference.

Even factories with solid order sheets are affected. Philip Cheng makes half the world's sports helmets, but he's been forced to invest more to keep his company running.

“Lots of our suppliers have closed,” Cheng said through a translator. “We have to hire more workers and get more materials to cover for them.”

And how will these changes impact U.S. Christmas shoppers this season? If China's any indication, the malls won't stock more than the basics, since store buyers are only ordering the bare minimum.

“The quantities that we saw a year ago, or two years ago, or three years ago are not there,” said David Dayton, the CEO of Silk Road International. “I would guess they are about half.”

So Chinese factories continue to adapt or close down while they wait to see if, come Christmas time, Americans will reopen their wallets.

[erasmus111]

"But now, CBS News correspondent Celia Hatton reports, flat-lining U.S. orders mean he's hustling to keep his sewing machines humming."

And that's a bad thing?

Maybe people are coming to their senses and have stopped buying things made in China.

[marshanwill]

It was Bill Clinton's free trade policies that open our boarders to the influx of foreign trade,but the Republicans went along with it. Our issues goes beyond Democrats and Republicans because neither party seems to represent the needs of the working class American. Our problem comes from our own inability of putting any effort in stopping the influx. Reseach the stores you shop in and the Companies that provide the merchandise. Send e-mails or letters to both when you see anything other than "Made in the U.S.A". We need to stop being lazy and start being more proactive with the few spending dollars we have left.

[bzzpd]

No one is obligated to shop at stores anymore. The department stores expect us to give them our paycheck every Holiday season like clockwork. I'm through with that. I owe Wal-Mart nothing. Wal-Mart goes to China and every other third world country and outsources american jobs to the lowest bidder. They tell China...Bangladesh....Thailand etc....etc... What they will pay per unit for producing the goods in Wal-Marts stores. Then they flood the stores in the United States with these goods, and mark them lower than every other retailer, to put the other retailers out of business.
Wal-Mart does the same thing to the American worker....They put your children out of work, to keep the third worlds populations in a job your child could be doing. Why should we pay for our kids to be unemployed every Holiday season anymore? This whole game to destroy all the other retailers and our job market in the United States by the Wal-Mart ilk, needs to come to an end. We need not support any of these retailers who won't even try to keep employment in the United States anymore. Wal-Mart can keep the toys that keep our children unemployed.
What will Wal-Marts new toy be next year? A box with a roll of toilet tissue....with instructions on how to live under an overpass?
The, "Be a Bum work kit?" Sponsored by the good people who bring you cheap goods at any price....especially your job.

[american_artist]

An entire generation of Americans have grown up conditioned to shop for the lowest possible prices. Lower prices mean that products are manufactured by workers who are virtual slaves in the world's poorest countries. American-made products mean paying higher prices at the register to pay workers decent salaries, local taxes, rents, etc. How many Americans are willing to do that? They show their disdain for the small businesses who contribute to the betterment of local communities by choosing the mega-merchants and chain stores. Americans can't claim they want their jobs back while supporting the companies that are only interested in being featured in Forbes magazine.

[saturns_seagoat]

I agree with you 100% and have seen this comming for years.But I was gald too see some of the fat clerks at;Ace Truevalue and the likes that would charge $30bucks for an $8.00 Plumb 16 oz.hammer and the same goes for the sub-contractor paid $23,000.for a $4,000.bath remodel.So enter Wal-mart and The Home Depot who shifted to buying foreign products.We did it to ourselves as a collective consumer organism.

[rightbehind]

I have nothing against the Chinese people but it's wrong that they can't afford the very products they make. I check the label if I need something and try to buy from economies similar to our own. Those that send US jobs to third world countries should have been charged with treason.

[lmartink]

"A light Christmas for China...." What is the author talking about. They don't even celebrate Christmas. Thay are atheistic Communists.

[rightbehind]

Christmas is kept alive by retailers. People run out to buy things they can't afford for people who don't have the need. Next time you go shopping look at the carts pushed against the walls full of items. Those are the rejected credit cards. As for being Christian I highly doubt Christ would approve of Christmas as we practice it here.

[juiceblog]

Made in China = crap! Don't buy it. We want goods made by Americans on American soil!

[rightbehind]

You can thank the republican free trade policies and wallstreet for shipping these jobs out of the country.

[Patriot1964]

What a tragedy! First American workers lost all their manufacturing jobs, now CHINESE workers are losing American jobs. I guess I better go spend my entire unemployment check buying made in China crap so they have a profitable season. Typical load of crap from what once was a good network.

[ToolMangler1]

What goes around, comes around, Get use to it China. As you sew,so shall you reap. (kinda the same, right???)