Can China’s textile industry clean up its supply chain?

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By Racheal Meiers, Director, Inclusive Economy

Image: Shutterstock
Image: Shutterstock

As part of BSR’s Business Leadership for an Inclusive Economy initiative, we are running an interview series with thought leaders from business, government, civil society, academia and philanthropy.

Their voices and perspectives will help deepen our conversation on how we can build a more inclusive economy and how business most effectively can contribute to that vision.

We spoke to Liang Xiaohui, head of social responsibility for the China National Textile and Apparel Council (CNTAC), about striving for good jobs in textile manufacturing, technology changes and impacts on workers and an inclusive future for the industry in China.

Racheal Meiers: What does it mean to be included in the economy? How does the textile industry make the economy more inclusive?

China National Textile and Apparel Council

Liang Xiaohui, head of social responsibility for the China National Textile and Apparel Council (CNTAC).

Liang Xiaohui: To be included in the economy fundamentally means to share the results of social and economic development by creating an equal opportunity for everybody to be active in economic activities and decisions.

Specifically, the textile industry creates jobs for people without a lot of education and skills — that’s why manufacturing is quite important in an economy, especially in developing countries.

To achieve an inclusive economy, it’s very important for businesses and also governments to think about how the interests of employers and employees can be balanced — and the voices of workers can be heard and their concerns can be addressed. As we look toward the future, this balance will be even more important.

For instance, if we can upgrade technologies and equipment and, at the same time, educate workers and let them upgrade themselves so that they have opportunities for better, higher paid, higher skilled jobs, that will be a big step toward achieving an inclusive economy in our sector.

Meiers: Given where things are in China right now, with changes in the labor force and competition from other countries in manufacturing, how do you see inclusion as fitting into this context?

Liang: In this context, we can no longer rely on lower wages or lax environmental practices to be competitive; we have to evolve to a higher stage of the supply chain to compete.

Getting there will take two critical elements: The first one is to be innovative, such as upgrading technologies in manufacturing; and the second is building a workforce of people that can effectively work with and work for innovations. To support our efforts to upgrade our industry, we have to build up our human resources potential and give people, especially existing textile workers, more opportunities to learn expertise and skills.

Meiers: How are your member companies approaching technology upgrades and related labor force engagement?

Liang: That’s really a big question, and I cannot give you a general answer because we have almost half a million textile and garment companies in China. But I do see that many companies are working hard to incorporate technology tools for different purposes, such as reducing pollution and increasing efficiency.

A very popular idea in our industry now is to exchange human power with machines, which is in part driven by the lack of skilled workers, and even a shortage of low- and unskilled workers in China in recent years.

At the same time, there are factories that are working to invest in their workforces. They are calling on government and associations like ours to improve education and vocational training to support upgraded skills in the industry. Some factories are also taking these steps themselves.

For example, one factory I recently visited is investing a lot of money to purchase very advanced equipment from Europe. To support these technology upgrades, they have also started their own academy, a professional training school where they can train their workers and future employees on how to work with the new equipment.

This factory sees investments in the expertise and skills of their workers as part of the process of upgrading their technology hardware. And they also understand it will be important to pay higher wages to the workers who become capable of operating the new machines.

Meiers: That’s an encouraging example. How is the Chinese government getting involved in these issues of workforce skill development, to support technology upgrades in the manufacturing industry?

Liang: The government has been monitoring this issue for many years. Recent policies from 2014 require that a minimum of 30 percent of local additional fees on education shall be used for vocational education, and the enrollment of vocational schools should raise from about 30 million in 2012 to more than 38 million in 2020, almost a 30 percent increase.

This will help transfer more young people into vocational schools, making them advanced industry workers with skills and expertise. The young people see where the economy is going and understand that to be included in that future economy, they need to know the skills required by it.

For example, there was a story last year of a young man who quit Peking University to enroll in an occupational school to become an auto mechanic — he did this because he liked the work, but he also knew that the auto maintenance industry in China is very underdeveloped for the demand that is coming.

Meiers: Shifting gears a little bit, let’s talk about the current workforce in textile manufacturing. Who are some of the most vulnerable people that are taking these jobs, and how do you work with your CNTAC members to identify these groups of people and put in place mechanisms to support them?  

Liang: I think the most vulnerable group in the industry is migrant women workers in their 30s and 40s. In the labor market, in the factory, they are not in a very good position. They have very low representation in management, and they have low levels of training and education as compared with male peers. The reason for this is that most of them come from villages and underdeveloped regions, where women have a very low status and so don’t receive as much education and opportunity.

We are actually doing some work with BSR to support these women, and all women workers in the industry. Though more than 65 percent of workers in the industry are women, they hold very few positions in management. Working with BSR, and learning from your expertise and experience supporting women’s empowerment in China, we are hoping to build up the potential of individual women to expand their skills and advance to these positions, while at the same time working to expand management’s understanding of women workers’ potential.

Meiers: In these collaborations, what opportunities do you see? How can we expand partnerships to support a more inclusive economy?

Liang: I think the greatest opportunity from our collaborations is that we are a national business association and you are an international business association, of sorts. And this is critical, because we are working at both ends of the supply chain. A lot of your members are buyers of our members.

So in working together, we can try to mobilize both ends of the international supply chain. So many issues can be addressed in this way.

Read perspectives on the inclusive economy from The Rockefeller Foundation’s Zia Khan, Western Union’s Talya Bosch and GlaxoSmithKline’s Clare Griffin.

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