Voice of America reported yesterday on the gigantic textile factory soon coming to Forrest City, courtesy of Chinese industrial giant Shandong Ruyi. It’s expected to create 800 jobs, potentially transforming the Delta town.
We noted the project when it was announced back in May by the Arkansas Economic Development Commission. But the VOA story highlights one remarkable figure that bears repeating: “Ruyi’s project will consume … nearly all the cotton the state grows each year.”
A single factory will absorb all the cotton farmed in the state? Indeed, the company said it 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?
AEDC communications director Jeff Moore said the Shandong Ruyi plant is projected to begin production in mid-2018.
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 U.S. when labor in China costs so much less than labor in America? Bloomberg has the answer: automation. The U.S. 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 labor 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 labor 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.
Capital. It does remarkable things. It’s also fickle.