Join the Socialist Party Join us today!

Printable version Printable version

Facebook   Twitter

Link to this page: http://www.socialistparty.org.uk/issue/406/4623

From The Socialist newspaper, 25 August 2005

China/EU dispute: Crazy logic of the profit system

THE MEDIA has been resounding to waves of denunciation and counter-denunciation over the banning of imports of clothes from China to the European Union (EU) - the so-called 'bra wars'.

Ron Groves

European textile manufactures complained that a flood of cheap imports is ruining their businesses. But clothes retailers were crying that there could be a shortage of bras and trousers in the shops at Christmas. 80 million items of embargoed clothing sat in EU warehouses.

Poised uncomfortably in the middle was Peter Mandelson, Blair's former spin-guru, now EU commissioner for trade. He brokered a 'compromise deal' on 5 September of a temporary stopping of China's clothing exports with around half the blocked items counted against the 2006 quotas.

Mandelson hopes this will be accepted by the EU - he would like to lift the restrictions in line with his neo-liberal Thatcherite economic ideas, but his boss in the EU, Jose Manuel Barroso made him back down.

Barroso came under intense pressure from some EU countries that see their own industries decimated and demand protectionist policies. Manufacturers from countries demanding a ban, mainly from southern Europe and Poland, point to the ballooning of clothing imports from China after 1 January 2005 when the World Trade Organisation (WTO) lifted restrictions. Imports of many clothing items shot up by several hundred percent in a couple of months.

Typical of the anti-embargo camp is Peter Simon, boss of Monsoon fashion chain. He claims boosting profits had nothing to do with his firm's decision to outsource to China rather than use EU-based manufacturers, but a typical blouse made in Britain has a cost price to the retailer of 10, compared to 6.50 for one from China.

Simon hypocritically expresses concern for super-exploited Chinese workers used by his company who will be hit by these protectionist trade measures, and says that the 'ethical' trading initiatives Western firms are supposed to have set up with Chinese firms will also be jeopardised.

However, a recent TV documentary investigating a Nokia supplier in China exposed how managers at the firm blatantly tried to pull the wool over the eyes of the Nokia team sent to check out the Chinese company. Notice was given of the inspection visit, so local bosses had plenty of time to fix things up by coaching workers in what to say and by fabricating documents on hours, pay and conditions.

Slave labour wages

THE BASIS of the Chinese cost advantage is the slave labour wages and conditions suffered by workers there. The workforce is mainly very young women who recently moved from rural areas to the fast-growing industrial regions in southern and eastern China where wages are typically about 2 a day.

The Chinese textile manufacturers are also undermining the clothing industry in ex-colonial countries like Bangladesh. Although manufacturers in both countries pay starvation wages, China has more modern and efficient production methods.

Workers in regions affected by the surge of imports could be sympathetic to demands for protectionist measures to save their jobs, but these would not solve their problems.

EU firms will use any advantage gained from protectionism to boost their profits while keeping relentless pressure on their own workers' pay and conditions. In the longer term, wide-scale protectionism would cut the market and possibly precipitate a 1930s-type economic slump.

On the other hand, free market, neo-liberal policies will be just as bad for EU workers, because whole industries could be wiped out by outsourcing to countries like China, leading to further mass unemployment.

Chinese textile workers should also not believe their bosses' claims that a neo-liberal, free trade approach is in their interests. There are already signs that rising wages are encouraging China's manufacturers to move production to new, poorer areas where they can pay even less and increase their profits.

This is the crazy logic of the capitalist profit-driven system. This system is the real culprit that workers in the EU and China should blame for their plight. That's why we fight for a socialist planned economy internationally.

Why not click here to join the Socialist Party, or click here to donate to the Socialist Party.


In The Socialist 25 August 2005:

Hurricane Katrina exposes Bush's rotten capitalist system

Hurricane Katrina: A disaster made worse by capitalism

Bush lashed over hurricane catastrophe

March against war and terrorism

Iraq 'Constitution' is no exit route for Bush and Blair

Book your ticket now!

TUC must turn defiant words into effective deeds

ISR backs Gate Gourmet workers

Poland 1980: The rise and fall of Solidarnosc

China/EU dispute: Crazy logic of the profit system


 

Home   |   The Socialist 25 August 2005   |   Join the Socialist Party

Subscribe   |   Donate  




Related links:

China:

triangleCampaign against political repression in Hong Kong

triangleKorean peninsula: is nuclear war likely?

triangleHong Kong: mass demonstration against repression

triangleChina: debt crisis, state repression and the prospects for workers' struggle

triangleLambeth Socialist Party: China - political repression and perspectives for workers' struggles

Profit system:

triangleObesity epidemic: end food market anarchy

triangleHistoric demonstration in Barcelona in support of refugees

triangleChile: general strike threat as pensions protests grow

triangleWhy the Socialist Party opposed the EU

EU:

triangleCorbyn's Labour can defeat Tories with socialist programme

triangleTories on the brink - kick them out!

triangleWhat we saw: May on Facebook

Pay:

triangleLocal government pay: fight for the 5% claim, fully funded

triangleDemonstrations by uni students and staff greet Bath vice-chancellor resignation

Profits:

triangleAirwave jobs strike

International

International

6/12/17

US

Trump's tax plan: Robin Hood in reverse

6/12/17

Ireland

Irish capitalist state: rotten to the core

6/12/17

Women

Fighting sexism, violence and capitalism - an international struggle

22/11/17

US

Trump's tax attacks

22/11/17

Australia

Australia: massive yes vote for marriage equality

21/11/17

Zimbabwe

Zimbabwe: Mugabe gone - but his regime remains in power

15/11/17

Minneapolis

USA: Historic vote for Ginger Jentzen campaign in Minneapolis

10/11/17

Minneapolis

US: Historic vote for Ginger Jentzen campaign in Minneapolis

8/11/17

Sweden

Sweden: 'Revolution2017' success

8/11/17

Spain

Spain: Madrid rally celebrates October revolution

8/11/17

Minneapolis

US: Minneapolis Socialist chimes with voters

8/11/17

Ireland

Ireland: rail workers demand share of 'recovery'

8/11/17

Ireland

Ireland: dangerous ideas for the ruling class

31/10/17

Catalonia

Catalonia: Rajoy's furious response to proclamation of Republic

25/10/17

Kurdistan

Kurdish referendum declared illegal

triangleMore International articles...


Join the Socialist Party
Subscribe to Socialist Party publications
Donate to the Socialist Party

triangle8 Dec Local government pay: fight for the full 5% claim

triangle6 Dec Strikers rally in Liverpool

triangle6 Dec Corbyn's Labour can defeat Tories with socialist programme

triangle5 Dec Victory at Glenfield shows people power can save our NHS

triangle5 Dec Labour council Blairites deselected

triangle30 Nov Victory: Glenfield Children's Heart Centre saved!

triangle30 Nov Dramatic retelling of Grunwick strike

More ...

triangle12 Dec Birmingham South East Socialist Party: Can the Labour Party be changed?

triangle12 Dec Liverpool Socialist Party: Fighting council cuts

triangle13 Dec Caerphilly Socialist Party: Are we heading for an era of war?

triangle14 Dec Wakefield Socialist Party: Universal Credit - the Tories' latest assault on the poor

More ...

Socialist Party Facebook page
Socialist Party on Twitter
Visit us on Youtube

Archive

Archives:

December 2017

November 2017

October 2017

September 2017

August 2017

July 2017

June 2017

May 2017

April 2017

March 2017

February 2017

January 2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

Legal

SP RSS feed RSS

Platform setting: = No platform choice

V2