Chinese companies boost US textile industry

By Zhang Lulu, July 8, 2014

As many as 17 Chinese companies have invested in South Carolina, the U.S., as of 2013 to help boost the local textile industry.

Lancaster County of South Carolina used to be a textile powerhouse in the United States. Twenty companies were once operating in the county and two in neighboring counties during its peak time, but they had virtually shut down by 2007.

Since the end of last year, China's Keer Group has invested US$218 million in South Carolina, the local textile industry became active again. The Zhejiang Province-based Keer Group is the first Chinese textile company to set up a manufacture factory in the U.S.

Sixteen other Chinese textile companies followed suit later and arrived in South Carolina in 2013, with an investment totaling US$656 million, making China the second largest investor in the state.

Lancaster's economy used to depend largely on Springs Global, a Brazil-based textile company that owned 25 factories in the county and in neighboring counties. But when it relocated to South America in 2007, the economy in Lancaster went downhill. The financial crisis and economic recession that followed dealt a further blow to the local economy, leading to an unemployment rate of up to 18.6 percent in 2009.

The arrival of the Keer Group was welcomed and brought hope to the local textile industry, said Keith Tunnell, president of Lancaster County Economic Development Corporation. He led a commercial delegation to China this April, attracting three more mainland Chinese companies to invest in Lancaster.

Robert M. Hitt III, secretary of commerce in South Carolina, described Chinese companies' investment as "an emerging rebalance." Both labor and transportation costs in China and Southeast Asia have increased compared to what they were 20 years ago.

"Thus, some textile companies may want to produce and sell their products directly in the United States," Hitt said.

Keer Group CEO Zhu Shanqing said, "Cotton in the U.S. is of high quality and cheap. The energy and capital Keer needs in the U.S. is relatively low. With the advanced logistics and readily available cotton there, the storage cost is considerably lower."

Southern U.S. is the traditional textile center with advanced textile technologies as well as skilled and cheap labor force; thus, the region appeals to the Chinese companies, Zhu Shanqing added.

The United States is the world's largest market, and has low energy costs and skilled workers. Additionally, the United States has signed free trade agreements with about 20 countries, enabling companies there to export products and services exempt from tariff, said Francisco J. Sánchez, former Under Secretary of Commerce for International Trade at the U.S. Department of Commerce.

"Chinese companies are trying to ‘go global,' so they have many reasons to invest in the United States," he added.