In a video call from the Chinese mainland, where he's gone before to make an announcement that a Chinese company is investing in Arkansas, Governor Asa Hutchinson was able to break the news that a Chinese company is to be making clothing for the American market, and will be doing so right here in the Wonder State, which never ceases to be wonderful.
The Chinese will be in the market for some 400 full-time workers at about $14 an hour. The company, Suzhou Tianyuan Garments Co., makes clothes for Adidas, Reebok and Armani at five factories in China.
At a time when both American presidential candidates are making protectionist noises again, free trade is proving the best of deals for both buyer and seller. "In previous decades," Governor Hutchinson noted, "we have lost manufacturing certainly to Mexico, we've lost manufacturing to China. Now we see that same manufacturing wanting to return to the United States of America." And it should be more than welcome, rather than something to be afraid of.
Why did the Chinese pick Arkansas to invest in? For three reasons, in this order: location, location and location. Even though a stronger dollar these days makes it costlier to buy products made in the U.S.A. than back in Shanghai--or anywhere else in China.
To quote Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas at Fayetteville: "Companies are always looking to be in the right place, to have the best access to their market at the lowest cost. The Chinese consumer may not be the the target demographic in the way that they have been in the past." To translate that business-speak into plain Arkinsaw, it's this state that offers the Chinese the best deal in sight, including tax breaks, subsidies and irreplaceable Southern hospitality.
The Chinese aren't the only ones who recognize Arkansas' potential. American companies can also see a great deal when they're offered one. Mike Preston of this state's Economic Development Commission noted that Wal-Mart's Made-in-the-USA campaign is paying off. "That's something that's taking effect over here. It's getting a lot of companies interested in doing business with Wal-Mart, knowing that Arkansas is a good place to have that manufacturing." Why? Productivity.
According to Kathy Deck: "Any time you see job creation in the manufacturing sector, it's very surprising because manufacturing has become so efficient--so amazingly efficient--that we just don't create as many jobs even if manufacturing output is moved to the state. You just don't see the investment dollars creating as many jobs any more because those dollars go toward these very high-tech machines." That observation may hold up in general, but apparently not in Arkansas--which is enjoying the best of both worlds: more jobs and more automation.
"Bringing garment manufacturing back to Arkansas," says Governor Hutch-inson, "is probably met with some initial skepticism because everyone thinks, well, we've lost shoe manufacturing, we've lost some of our apparel industry in the past." And how. Mena, Hot Springs, Salem, Gassville, Morrilton . . . you name it. But it's all turning around now.
Clever people, these Chinese, and our governor is clever enough to join them when it comes to seeing that the Land of Opportunity is just that once again. The more things change, the more they remain the same. Again.
Editorial on 10/25/2016