The West says China is making too much. His employees disagreed

The West says China is making too much. His employees disagreed

Ren Wenbing refuses to leave the perforated brick shell of what was once a thriving factory in China’s manufacturing hub of Dongguan.

“All the workers were amazed,” the 54-year-old said, pointing to where he used to assemble furniture and where everyone gathered for lunch.

The company’s owners have moved production to Southeast Asia to reduce costs. Mr Ren said he was owed more than 80,000 RMB ($11,000; £8,800) in back wages, which could take years to collect.

“We’re disappointed, and we’re sad,” he added, as a machine brought a sledgehammer to the window.

Mr. Ren is not just mourning the loss of a furniture firm. He lamented the departure of China’s once unstoppable economy, which has made it difficult for millions of workers to find work.

For people like him, now it’s not enough made in China.

But the West has accused China of doing too much – it was the dominant message during US Treasury Secretary Janet Yellen’s recent visit. He chided Beijing for “unfair economic practices,” for producing more than is needed or the world can absorb.

The “Made in China” brand engraved, sewn or branded on t-shirts, tables and TVs in many homes around the world is changing. It is now at the center of electric cars streaming into Germany, and solar panels powering Europe’s renewables policy. And that worries the West.

Rising trade tensions with the United States, strict Covid lockdowns and the global downturn mean some producers who once flocked to China’s shores are looking elsewhere. Foreign investment in the country is at a 30-year low.

But now that the old industrial pillars of furniture, clothing and electrical goods are struggling, Beijing is looking for “new productive forces”: solar panels, lithium batteries and electric cars.

“We export to the UK, Belgium, Germany, mostly European countries, but also to Africa, Australia, South America, North America and even Southeast Asia,” said salesperson Yan Mu, pointing to the company’s storage batteries.

His was one of the booths at an exhibition held by hundreds of green energy storage companies at a refurbished and repurposed steel factory on the outskirts of Beijing.

“I think Chinese companies lead the whole energy storage market. With innovation, with new technology, battery sales, PCS [power conversion system]… well, everything. Now, I think 80% to 90% of energy storage equipment is designed and manufactured in China.”

A few hours’ drive from Dongguan, there are more signs of the scale of this industry: there are solar panels as far as the eye can see.

China installed more solar panels last year than the United States has managed to build in a decade, the mass manufacturing taking place here has brought costs down to half of last year’s prices.

Manufacturers across Europe are struggling to compete. In 2023, 97% of the solar panels installed across Europe will come from China.

But China’s new industries are far less labor-intensive than those that once fueled its spectacular growth – and they require specialized, highly skilled workers and, increasingly, robots. While China’s youth unemployment has made bigger headlines, the city’s overall unemployment rate is still above 5%.

The US and the European Union believe this is how China is trying to save its economy – producing cut prices and state-subsidized green technology to sell abroad. They say this is a tactic that drives down the cost of solar panels and emerging technologies and drives Western firms out of business.

China says its success depends on innovation, not state subsidies, and there is demand for their exports as the country transitions from fossil fuels to more climate-friendly energy sources.

Out with the old
But Mr. Ren couldn’t find a job in China’s new success story.

He left his family’s farm in Henan as a teenager and moved to Dongguan, a city on the southern coast of Guangdong province with so many manufacturers that it is known as the “factory of the world”. At one point, he did not return home for 11 years.

He is one of the nearly 300 million migrant workers who have moved from villages across China to major cities in search of work. Most left their families behind: Mr. Ren’s children were raised by their grandparents while he and his wife lived in Dongguan, where three-quarters of the city’s 10 million residents are considered immigrants.

“My children certainly miss me,” he said,adding that he and his wife had “no choice”.

“We don’t get much. After daily living costs, money we send home for our parents, money for our children’s education… we don’t have much left.”

“All foreign workers face this,” he continued. “If we want to support our parents and children, we have to live far from our loved ones and work in other regions. This is the reality.”

Now, as China’s future is at a crossroads, so are their lives.

Ren and his wife now live in a room that can only fit one bed and a side table. There he sat scrolling through his phone looking for job ads. Most factories offer less than 16RMB ($2.50; £2) an hour minimum wage. One ad is offered for only 13RMB per hour.

He needs the extra money and has gone to court to get it. But the owner appears to have left the country, leaving him and about 300 of his former colleagues in limbo.

“We witnessed the changes in Dongguan and have strong feelings for this land. This is our second home. We will feel very sad and lost if we have to leave here. We will never forget what the local government tried to give us. more benefits. It’s because of the government’s policies that give us jobs and we can earn a living.”

From around the mid-1980s, shortly after China opened up to the world, Dongguan became the country’s leading export and manufacturing base. It produces cheap clothes, toys and shoes.

At that time, tens of thousands of workers would line up at the entrance to begin their shifts making shoes for export to the United States.

But in recent years, workers began demanding higher wages, while companies began cutting prices to win contracts, squeezing profits further. Then Donald Trump arrived in the White House, imposing tariffs on Chinese products – including shoes. Firms – seeking lower operating costs and protection from the US-China trade war – began looking elsewhere.

Now in an almost abandoned quarter of Dongguan, there are miles of empty low-rise buildings that look like ghost factories. Its only occupant was a lone security guard waving to anyone who wanted to know.

The constant hum of the sewing machine has been replaced by a chorus of birds and stubborn banyan tree roots have worked their way under the concrete frame of the building. The warm and often humid southern climate helps nature take over what humans have left behind.

In with the new
Dongguan isn’t giving up though: it’s trying to transform itself as a high-tech hub to try to recapture some of its former glory. On the edge of Songshan Lake, tech giant Huawei has built a campus to house 25,000 employees. There are new science parks and hotel chains.

Alan Lee is sleeping in his freshly painted office as he tries to capitalize on the city’s new direction. The 32-year-old – having survived the economic downturn to start his business – has set his sights on exporting high-tech machinery to Europe.

“Many people have lost their jobs in recent years. People are in debt and forced to sell their properties. We see many companies experiencing a drop in demand in exports. Managers face a lot of financial pressure and even have to close their factories. We chose to focus on trade so that we have no pressure on production.”

But these jobs require knowledge of new technological skills that people like Mr. Ren have yet to acquire. His hope of receiving the money owed is fading.

He thought about what he would tell his children about why their father stayed away.

“I don’t know how to give a good answer. I can only say – your mother and I left because we want to give a better life and a better education. We hope you can learn something so that in the future you don’t have to work so hard like us.”