Chinese exaggerate speed of garment production shift

It’s hardly world-shattering. But the sloppiness of news coverage coming from the Chinese government strikes me as providing a disturbing insight into how its officials view the world.

In an article at the beginning of February, the International Business Daily – the business newspaper produced by the country’s Ministry of Commerce – reviewed what it describes as the reduction in Japanese investment in China. Its analysis is hopelessly shoddy: it believes Japanese companies decided to reduce production after anti-Japanese demonstrations in autumn 2012, and believes moving production elsewhere is partly because free trade between SE Asia abd China will make it cheaper for Japanese businesses to manufacture in Indonesia or Vietnam, then export the goods to China than to manufacture in China.

Nonsense, of course:  Japanese apparel companies decided to reduce production in China four years ago – and started discussing it eight years ago. And Japanese production in China goes to Japan: Japanese garment retailers are trying to extend their business in China, but the overwhelming majority of their sales are at home in Japan. It’s sadly typical of the self-obsession of all Chinese journalism we ever see to misunderstand so fundamentally the process by which China’s most loyal foreign investors have decided to start moving elsewhere.

But lots of journalism is insular: the problem with the International Business Daily is that its insularity is downright wrong as well. The article – or at least our translation of it  - says that “Ito Yokado also plans to reduce garment production in China to three percent in the current year”, and that “Uniqlo also plans to transfer the production line from China to other lower-cost countries.” In fact, Ito Yokado announced in February it was going to cut its sourcing of private label garments from China from the 80% China accounted for in 2012 to 60% this financial year and 30% next financial year. Fast Retailing – Uniqlo’s parent – has made no announcement about its plans for Uniqlo production. But it announced in late 2012 that it sourced about 70% of its garments from China and intended moving just one-third of this elsewhere. Both Ito Yokado and Fast Retailing are working to exactly the timetable of withdrawing from China that was announced in 2009

Why does the Chinese government distort this? Well, partly because it employs badly trained journalists: there’s no obvious political or propaganda reason for exaggerating the reduction of garment production commissioned by Japanese retailers. Partly, though, because there is a less obvious political agenda: the Ministry of Commerce is uncomfortable with the stridency of much anti-Japan feeling in China, and wants to stress the damage nationalism can do

But it’s also part of China’s official worldview. The article is titled “Does the slowdown in Japanese investment show Japan’s unreliability?” In China, the world outside is full of foreigners, and you can’t trust them. Which brings us to another apparently trivial example of sloppy Chinese journalism.

In June 2012, Bosideng opened a trial store in London. Acquired for £21 mn, and rebuilt for another £8 mn, Bosideng didn’t get much change out of $50 mn for a shop that’s turning into the quietest place in London’s West End: it must be the only shop in London that cost $50 mn to set up, but thinks getting 500 visitors a day is an achievement (around 100,000 people a day walk past it). In discussing this extraordinary example of the silly things businesses will do if they’ve got more money than sense, Zhu Wei the CEO of Bosideng Corp UK told China Daily how odd foreigners are. “It's very difficult to do business in Europe” observed Zhu, who went on to describe his puzzlement on discovering neighbours objected to his rebuilding his shop in such a way it cut off their light.

Obviously it’s an everyday occurrence for rich gits in China to cut off their neighbours’ light. And if you’re used to a society where consideration for your neighbours is strictly for wimps, it might seem odd for those neighbours to object. , "Our neighbours came to ask for compensation under the Rights of Light", says Zhu.” "But unfortunately, we didn't know anything about it."

Only Zhu did. According to Zhu’s solicitors (whom Zhu says “understand our business and we trust their judgement”), “a rights to light surveyor was engaged early and worked closely with it to identify adjoining owners most likely to obtain injunctions citing interference”.

Who knows whether Zhu listened to his lawyers’ advice, or whether he ignored it as some silly local pedantry until the injunctions started piling up on his desk – demanding not compensation but the cessation of building works? The fact that matters for the purpose of this blog iks that China Daily’s account of the event is almost certainly wrong: another example of bad journalism from a country where facts don’t matter: just the spin the ruling party puts on them.