INDIAN LAND, S.C.—Jonathan Anderson walked out of the cotton mill and fired up a cigar. His lighter was painted in the red, white and blue of the American flag. Smoke break in patriotic Lancaster County, cotton country, same as it ever was.
Except for another flag just up the hill: the red and gold of China, flying high beside the Stars and Stripes.
Anderson has spent the past three months working for a Chinese company. Since he left an American company located farther away from his Lancaster house, the 28-year-old who hunts, fishes and plays banjo in a bluegrass band has maintained machines at the $218-million yarn production plant opened last year by the Keer Group, a company based in Hangzhou.
South Carolina’s textile jobs were once thought gone for good, lost to China and other low-wage nations. Now, to the astonishment of a community that was devastated by the bust, China is bringing some of them back.
“It’s stunning,” said Jamie Gilbert, the county’s economic development director. “To see that investment come back is very surprising.”
Chinese capital still represents a small chunk of the state’s boom in foreign investment, which has largely come from Europe. But the South Carolina experience offers a handy counterpoint to the simplistic
of Republican presidential candidate Donald Trump.
Chinese companies are not only investing in cheap textiles. Since 2000, when appliance giant Haier became the first Chinese firm to open a U.S. factory, at least 18 more have built South Carolina plants in industries ranging from plastics to auto parts.
The Keer Group yarn factory in Indian Land, part of Lancaster County, S.C. The Chinese company opened the plant last year. (DANIEL DALE / TORONTO STAR)
They have hired more than 3,000 people and invested more than $700 million. That does not include a $500-million, 2,000-plus-job car plant being constructed by Sweden-based Volvo, which is owned by a Chinese company.
Trump, who won the South Carolina primary with 33 per cent of the vote, has depicted international trade as a zero-sum game in which one country “winning” comes at the cost of another country “losing.” Economists on all sides of the debate say the matter is far more complex.
South Carolina has lost more than 100,000 manufacturing jobs to globalization and automation. But more than 8 per cent of its private sector jobs, more than 128,000, are now provided by the U.S. affiliates of foreign-owned companies, tops in the nation.
John McDermott, professor and chair of economics at the University of South Carolina, said the anti-trade rhetoric of the state’s politicians has largely vanished.
“It’s so easy to talk about job losses and jobs being exported. But trade creates jobs, both through exports and through investments, such as the Europeans and Chinese are making in South Carolina,” McDermott said. “There’s a lot of insourcing of jobs as well as outsourcing of jobs. And I think that’s a highly neglected thing in the media.”
Trump accuses China, a noun he pronounces with a distinctive bite, of “stealing our jobs.” In May, he went so far as allege a “rape,” claiming China is perpetrating “the greatest theft in the history of the world.”
There is no doubt that Chinese competition has hurt many American workers. But Trump’s rhetoric is bewildering to undecided voter John Blackwell, 65, a barber for the last 47 years in the small town of Camden.
His shop is six minutes away from the 100-employee, $40-million Haier refrigerator plant just outside town. Last year, the Qingdao-based company announced a $72-million expansion that will add 410 more jobs.
“They’re not stealing our jobs,” Blackwell scoffed. “I’m just glad that we got a plant here in Camden that is employing our people. Because the ones that are employed here are Americans. Some of them didn’t have work. And some of them were able to move back home and get a good job.”
Chinese investment in the U.S. hit a record $18 billion in the first half of 2016, according to research firm Rhodium Group, more than the $15-billion total for all of 2015, which was itself a record.
The turn of events in Lancaster, just south of Charlotte, has been especially remarkable. For more than a century, its economy relied on the Springs cotton empire that employed 14,000 South Carolina workers as late as 1992 and then vanished.
The last Springs mill in the state shut down in 2007. In 2008, Forbes magazine identified Lancaster as America’s single “most vulnerable” town. In 2009, local unemployment hit 19 per cent.
But the county bounced back, luring employers in other industries and reducing unemployment to 8 per cent. And then Keer materialized from thin air. It now employs about 200 people on its way to a promised 500.
One of them is Ashley Kensington, 29, who was shocked when the opportunity arose years after outsourcing cost her a previous textile job.
“I was fussing about all of our work going to China,” she said. She now has the kind of job that seemed like a thing of the southern past: “stuffing machines full of cotton,” turning it into yarn to be shipped to textile and apparel companies in Asia.
The influx of Chinese firms has been prompted in large part by rising wages and other costs in China. South Carolina is attractive to foreign investors because of its savvy labour force, Charleston port, proximity to Charlotte’s airport and U.S. consumers, low unionization rate, and the generous tax breaks its governments have been willing to offer.
Other southern states are now competing fiercely for Chinese investment. Georgia scored its first major Chinese factory in September, when Sentury Tire announced it would spend $530 million on a 1,000-job facility.
The transition for the Chinese companies is not always smooth. Gilbert, who hailed the Keer investment, said the firm is still working through the “cultural differences” between China and America.
Employees complained on condition of anonymity that several of their supervisors do not speak English. One alleged that the company has pushed out American-born employees to hire recent Asian immigrants, unhappy that the locals expect the right to voice their opinions.
Keer America, which has acknowledged a high turnover rate, did not respond to the Star’s questions. After a reporter dropped by the facility, managers distributed a memo that demanded in underlined capital letters that employees “refrain from engaging or answering questions or inquiries from unauthorized personnel or a media reporter” without permission.
Keer need not have worried about Anderson talking.
He has started at $10 per hour, but he said he will soon qualify for a raise to $12, not bad around there. At his last job, at a U.S. car-seat manufacturer, he made $10.35. He said he has had no problems at Keer.
“I feel good,” he said. “They’re treating me like anybody else. They don’t treat me any different coming from a culturally different background.”
Sitting beside Anderson on the smoke break, a colleague from Taiwan could not resist a little joke.
“He’s taking our jobs!” he shouted.
