IV. 如果没有，中国的纺织品和服装行业是否会面临像美国汽车行业那样的算账？

 文章摘要：中国的纺织品和服装业遭受了严重的困境。以下一些或全部因素可以被归咎为原因：1. 政治关系和持续的关税；2. 中国以廉价和质量差的产品闻名，这至少在一定程度上是有证据支持的；3. 由于中国的封锁和糟糕的经济状况，国内需求疲软；4. 由于上述某些或所有原因，中国大量将生产资源转移到越南等其他国家。

在本文中，我们建议中国唯一的长期解决方案是重建其优质产品和时尚创新的声誉，就像日本在20世纪50年代借鉴W.爱德华·戴明的教诲所做的那样。除此之外，中国工厂需要打造自己的品牌，这些品牌既不会大肆宣扬廉价，也能在风格和质量上与其他国际品牌媲美。

然而，中国工厂主们正在抵制变革，开始感到恐慌，并且除了找到可以代售他们产品的人以外，他们对任何解决方案都束手无策。但是，除了"廉价中国"，他们还能销售什么呢？

最后，我们预测如果一些工厂不引领中国走向新的方向，中国纺织工业将面临崩溃，充其量只能沦为TJ Maxx和沃尔玛等大众市场的供应商。这部分原因是由于美国零售经济的分化和整合：中等级别的百货商店正在消失，只剩下为大众市场竞争的极低价格或通过直销或在Net-A-Porter和FarFetch等平台上销售的高端奢侈品牌。此外，几乎每天都会出现许多新颖的品牌，而中国的在线替代平台只有SHEIN和TEMU，这些平台的产品天然廉价且质量较差，创新的中国品牌很少被海外客户所见。

中国纺织工业将不得不经历一场算账，就像美国汽车工业在20世纪70年代和80年代经历的那样（正如大卫·哈伯斯塔姆在他获得普利策奖的1986年著作中所描述的）：世界已经改变；过去你所做的事情和你所逃脱的事情已经一去不复返。如果你不面对当今世界的现实，你也将会灭亡。

IV. 如果没有，中国纺织和服装行业是否会面临像美国汽车工业那样的算账？

什么是“算账”？

根据柯林斯词典的定义，“算账的日子”指的是未来的某一天或某个时刻，人们将被迫面对一个他们一直回避的不愉快局面。美国汽车工业在大卫·哈尔伯斯坦的同名著作中就经历了这样的后果。

那时发生了什么？

正如哈尔伯斯坦在开篇章《麦克斯韦尔的警告》中所描述的那样，在1973年，查理·麦克斯韦尔试图警告底特律的汽车制造商，石油价格的剧变即将到来，因此他们那些油耗巨大的大型汽车将无法与日本和德国的汽车相比经济实惠。他得出结论，世界“已经发生了变化，而且还将继续变化。” 他们不仅没有听从他的警告，而且他从未得到与决策者会面或引起决策者的关注。用哈尔伯斯坦的话来说，“他甚至没有跨过护城河。底特律是底特律，而且比大多数商业中心更甚，它只倾听自己的声音。”

这是一种严重的否认现象，导致了美国许多标志性企业的衰落，直到今天，如西尔斯和玩具反斗城。哈尔伯斯坦告诉我们：“他们相信明天会和今天一样，因为历来就是如此，而且他们希望（我强调）明天也会如此。”

这种态度导致了美国国内汽车工业市场的前所未有的损失，以及以日本为首的外国品牌的巨大增长故事。让我们将其与2023年中国制造商的情况进行类比，特别是纺织业。首先，让我们阅读哈尔伯斯坦书中的结尾段落（用中国替代美国）。他谈到了移民的出现，尤其是亚洲移民，他们看到了在美国可能获得再生生活的机会，而不是把这个机会视为理所当然：

“美国在新的世界经济中最不准备的方面是对期望的认识。没有一个国家，包括美国在内，可能会像从1945年到1975年那样富裕（我的评论：中国呢？），其他国家正效仿日本进入中产阶级生活，这意味着对大多数美国人来说，生活势必变得更加艰难。但是到1986年中期，似乎很少有人意识到这一点，更别说关心了。很少有人讨论如何最好地调整国家以适应一个稍微降低期望的时代，或者如何调动其丰富的资源以在一个严酷、无情的新世界中生存，或者如何公平地分配必然的牺牲。”

这些就是美国在1980年代面临的算账的结果，而且情况很糟糕。请看下面的数据：

由于外国汽车公司将大部分在美国的生产转移到了美国本土，而且约25%的国内汽车产量来自北美自由贸易协定（NAFTA）合作伙伴，这对美国经济来说并不完全是一种损失。尽管如此，这仍然是美国曾经占主导地位的汽车工业的一个非常悲伤的故事，中国可以从中吸取教训。

中国纺织制造商在5年后会是什么数字？世界的发展速度比20世纪快得多，因此不需要等待50年，甚至不需要等待20年来看结果。

这是否意味着中国制造商必须在美国、北美自由贸易协定或其他西半球自由贸易协定伙伴开设工厂？也许是的。这种行动将与我之前提到的建议一致：做一些与过去不同的事情，因为你意识到情况已经改变，永远不会再回到过去；因此，你需要彻底改变你的战略。主要涉及效仿丰田、三星、LG等品牌的做法，它们不仅主导了美国市场，还使其外国起源成为一个无关紧要的因素。这包括在美国雇佣能力强的人，他们能够理解并恢复公司和消费者对中国产品的信心。

那么中国货币呢？曾经有一段时间，中国被称为汇率操纵国，因为它有意将货币与美元挂钩以促进出口。当时的赌注是，如果人民币获得自由浮动，它将大幅度升值对美元。我想知道如果人民币今天被放任自由浮动会发生什么？也许恰恰相反，这对中国来说将是一场更大的灾难。你会买单吗？

最重要的教训就是本文所讲述的教训。由于没有像戴明那样的人来教导和激励我们，中国工厂需要借鉴他的教导和那些遵循了他教导的人的成果，例如日本，以引领一场为未来成功奠定基础的巨大变革。这将是对中国来说一种有益的变革。

再次强调，戴明的两个主要教训是：1.质量控制达到零缺陷的标准；2.采用PDCA的哲学和方法论，这意味着信号性的范式转变，制造客户想要的产品，而不是销售你手头现有的产品。这意味着一种哲学的转变，但正如前面所说，这并不是在中国和中国文化中不存在的。这实际上意味着回归到中国的创新黄金时代。中国仍然有一些公司，如张小泉（优质刀具和餐具）和景德镇（精美杯子），它们拥有不妥协的质量标准，并获得相应的高价。如果这意味着它们无法达到最高销量，它们也乐意接受。这应该成为所有希望以可持续方式发展业务的中国生产商的范式。

最后一个词应该是莲花（Lotus）喜欢提及的区别，它适用于20世纪70年代和80年代的日本汽车公司，甚至可能在今天仍然适用：企业家与商人之间的区别。

当日本开始在美国市场上产生影响时，距离戴明去那里已经过去了大约20年，他们是企业家，按照PDCA系统进行营销。他们测试市场，相应地修改他们的产品和服务，并不断完善他们的产品，直到今天。

相反，美国的汽车公司是“企业家”和“商人”的结合体。他们主要是商人，以卖车为目标，而不是提供客户所需的产品。这是一种短视的策略，导致了衰落。

我希望中国纺织和服装行业能够从这些教训中受益，并采取适当的措施来确保其可持续发展。通过坚持高质量标准、采用PDCA的哲学和方法论，以及培养企业家精神，中国制造商可以继续在全球市场上取得成功。

IV. If not, will there be a Reckoning for China textile and apparel like there was for the US Auto Industry?

Article Abstract: Textile and Apparel business in China is suffering badly. Some or all of the following factors can be held responsible: 1. Political relations and the continuing Tariffs; 2. China’s reputation for cheap and poor quality product which is, at least partially, justified by evidence; 3. Sluggish domestic demand due to the lockdown and poor economy in China; 4. Due to some or all of the above, significant resourcing to alternative countries such as Vietnam.

In this article, we suggest that the only long-term solution for China is to rebuild its reputation for quality product and fashion innovation, just as Japan did in the 1950’s using the lessons of W. Edwards Deming’s teachings as a platform. Combined with this, China factories need to build their own brands which a. don’t scream Cheap and b. stand up to other international brands in style and quality.

But, China factory owners are resisting change, starting to panic and are lost for any solution except to find someone who may sell their product for commission. But, what would they be selling other than “Cheap China?”

Finally, we predict that, if some factories don’t lead the way to a new direction for China, the Chinese textile industry will crash and burn or, at best, be relegated to the mass market in such outlets as TJ Maxx and Walmart. Part of this is due to the bifurcation and consolidation of the US retail economy: The middle level department store base is disappearing, leaving only either competition for the mass market at rock-bottom prices or premium and luxury brands sold DTC or on platforms like Net-A-Porter and FarFetch. In addition, many new and innovative brands are appearing almost daily. The only Chinese online alternatives to those platforms are SHEIN and TEMU, which are by nature cheap and poor quality, and the innovative Chinese brands are rarely seen by overseas customers.

The Chinese textile industry will have to have a Reckoning, just as the American auto industry did in the 1970s and 1980s (as described by David Halberstam in his Pulitzer Prize-winning 1986 book): The world has changed; the way you did things and the things you got away with in the past are gone. If you don’t face the reality of the world today, you will also be gone.

IV. If not, will there be a Reckoning for China textile and apparel like there was for the US Auto Industry?

What is a “Reckoning?”

According to Collins Dictionary, it is “if someone talks about the day of reckoning, they mean a day or time in the future when people will be forced to deal with an unpleasant situation which they have avoided until now.” 

It is the same consequence the US Auto Industry faced in the 1970’s, according to the great book by David Halberstam of the same name.

What happened then? 

As Halberstam describes in his opening chapter, “Maxwell’s Warning,” in 1973 Charley Maxwell tried to warn the automakers in Detroit that a sea change in oil prices was coming, thus their gas-guzzling big cars would be uneconomical compared to Japanese cars and German cars. He had concluded that the world “had changed and was going to continue to change.”  Not only did they not heed his warning, but he never got and audience with or the attention of the decision makers. In Halberstam’s words, “he had not even gotten across the moat. Detroit was Detroit, and more than most business centers, it was a city that listened only to its own voice.” 

It was a serious case of denial that has brought down many iconic businesses in the US even until today, such as Sears and ToysRUs. Halberstam tells us, “They believed that tomorrow would be like today because it had always been like today and because they wanted (emphasis mine) it to be like today.” 

This attitude resulted in an unprecedented loss of market for US domestic auto industry, and a great growth story for foreign brands, led by the Japanese. Let’s make a corollary here with the situation in 2023 for Chinese manufacturers, especially the textile industry. To begin, let’s read the ending paragraph of Halberstam’s book (substitute Chinese for American). He speaks of the emergence of immigrants, especially Asian immigrants, who saw the possibility of a regenerative life in the US, as opposed to native Americans who took it for granted:

“The other respect in which America was ill prepared for the new world economy was in terms of expectations. No country, including America, was likely ever to be as rich as America had been from 1945 to 1975 (my comment: China?), and other nations were following the Japanese into middle-class existence, which meant that life for most Americans has bound to become leaner. But in the middle of 1986 there seemed little awareness of this, let alone concern about it. Few were discussing how best to adjust the nation to an age of somewhat diminished expectations, or how to marshal its abundant resources for survival in a harsh, unforgiving new world, or how to spread the inevitable sacrifices equitably.” 

These are the results of the Reckoning that America faced in the 1980’s and they are terrible. Take a look at the following numbers:

Since foreign-owned auto companies relocated most of their US production to the US itself, and approximately 25% of the domestic auto production comes from NAFTA partners, it has not been a total loss for the American economy. That said, it is still a very sad story for the once-dominant American auto industry and one China can learn from.

What will be the number for Chinese textile manufacturers in 5 years? The world moves much more quickly than it did in the 20th century, so it is not necessary to wait 50 years, or even 20, for results.

Does this mean that Chinese manufacturers have to open factories in the US or NAFTA or other FTA partners in the Western Hemisphere? Maybe. This type of action would be in line with what I suggested earlier: doing something different than what had been done before because you recognize that the situation is changed and will never be the same again; therefore you need to radically change your strategy. Mostly it involves following the example of brands like Toyota, Samsung, LG etc. that have not only dominated the US market but have made their foreign origin a non-factor. This includes hiring capable people in the US who understand and can restore companies’ and consumers faith in Chinese product. 

And what about the Chinese Currency? There was a time when China was called a currency manipulator because it intentionally pegged its currency to the USD to promote exports. The bet then was that the currency would materially strengthen against the USD if it were freed. I wonder what would happen if the RMB were left to free float today? Maybe just the opposite, which would be a further disaster for China. Would you buy in?

The most important lesson to be learned is that which this article is about. Since there is no Deming to teach and inspire us, Chinese factories need to look to his teachings and the results from those that followed them, like the Japanese to lead to a sea change that lays the groundwork for success in the future. This would be a productive change for China.

Again, two main lessons from Deming are: 1. Quality control to a standard of zero defects; 2. Adopt the PDCA philosophy and methodology, which signals a paradigm shift to make what the customer wants, as opposed to selling what you have. It means a change in philosophy, but, as said earlier, not one that is non-existent in China and Chinese culture. 

It actually means a spiritual and actual return to China’s Golden Age of innovation. There are still companies in China, like Zhangxiaoquan (knives and cutlery of the finest quality) and Jingdezhen (beautiful cups) that have uncompromising quality standards and command a commensurate price. If this means they don’t reach the pinnacle of volume, they are happy to accept. This should be the paradigm of all Chinese producers who want to grow their business in a sustainable manner.

The last word should be the distinction that Lotus is fond of making, which applies to the Japanese auto companies in the 1970’s and 1980’s, and maybe still today: Between entrepreneurs and businessmen.

When the Japanese started to make an impact on the US market, some 20 years after Deming went there, they were entrepreneurs, marketing according to the PDCA system. They tested the market, revised their product and service accordingly, and continued to refine their offering until today.

We hope that system can be widely adopted in China, which would indicate a sea change in mindset. From our knowledge of many factories, the current owners, spawned from the Deng Xiao Ping era and China’s record growth, are “old school” and cannot pivot; it will have to be their sons and daughters, maybe even their sons and daughters, who understand and implement the change in a widespread fashion. This is the game changer we are looking for.

Problem is, by that time the situation will continue to erode and textile and apparel manufacturers will find themselves with a permanent loss of market share, just as the American auto manufacturers have; or worse, with the same fate as Sears and ToysRUs.

What we need and what we are looking for are a few souls to start the fire. 

Then, in the future, the Great Reckoning can be called the Great Awakening.

 

 

第三部分：中国纺织和服装行业2023：派对结束，中国需要邀请一位戴明（Deming）参加下一个派对——为了重建中国的声誉、尊重和业务，需要做出哪些改变？

 中国的纺织和服装行业正面临严重困境。以下是导致这一情况的一些或全部因素：1. 政治关系和持续的关税；2. 中国以廉价和劣质产品闻名，这在一定程度上是有据可查的；3. 由于封锁和中国经济疲软，国内需求不振；4. 由于上述原因，许多企业开始转向越南等其他国家寻求资源。

本文建议，中国唯一的长期解决方案是重建其优质产品和时尚创新的声誉，就像日本在20世纪50年代借鉴威廉·爱德华·戴明（W. Edwards Deming）的教导后所做的那样。除此之外，中国工厂需要打造自己的品牌，既不会散发“廉价”气息，又能在风格和质量上与其他国际品牌媲美。

然而，中国工厂业主们对于改变持抵制态度，他们开始感到恐慌，并且无法找到除了寻求代销商以外的任何解决方案。但是，除了“廉价中国”之外，他们能卖出什么呢？

最后，我们预测，如果一些工厂不能引领中国朝着新的方向发展，中国纺织工业将会崩溃，或者充其量只能退居于TJ Maxx和沃尔玛等大众市场。其中一部分原因是美国零售经济的分化和整合：中档百货商店正在消失，只剩下在底价大众市场竞争或通过直销或Net-A-Porter和FarFetch等平台销售的高端奢侈品牌。此外，几乎每天都有许多新的创新品牌涌现。中国唯一的在线替代平台是SHEIN和TEMU，它们的性质是廉价和劣质的，而创新的中国品牌很少被海外客户看到。

中国纺织工业将不得不面对严峻的局面，就像美国汽车工业在20世纪70年代和80年代所经历的那样（正如大卫·哈尔伯斯塔姆在他的获得普利策奖的1986年著作中所描述的）：世界已经变了，你过去做事和逃脱惩罚的方式已经不存在了。如果你不面对当今世界的现实，你也将会消失。

III. 重建中国的声誉、尊重和业务需要做出哪些改变？

首先，让我们先做两件事：1. 看看中国目前的情况；2. 研究文化基础，看看是否有一个强大的传统或基础可以借鉴，或者我们是否被困在了现在。

中国目前处于何种状态？正如我在2017年在我的博客www.isourcerer.com上在文章《中国质量-够好并不够好》中所写的那样，除了顾客所设定的标准外（我参观了许多工厂），大多数工厂没有自己内部生成的质量标准。通过检验并发货只需要“够好”。

那么这有什么问题？主要问题是它服务于“廉价中国”的评价。其次，它阻碍了对更好产品的内部投资。工厂主人们认为：“如果买家接受我目前发货的产品，我为什么要花钱改进呢？”下面是对这个问题的回答，再提出另一个问题：如果你的买家接受垃圾，因为他们期待垃圾，这对你来说够好吗？买家不会为垃圾支付溢价，当其他工厂或国家出现更便宜的垃圾时，你就会失去竞争力。一些公司，如Temu和Shein，已经准确地诊断出美国消费者只要以垃圾价格购买，他们就会接受垃圾。这种情况延续了下来。因此，廉价中国接受了成为垃圾的主要供应商的头衔，因为这是他们了解的与低劳动力成本的其他国家竞争的唯一方式，并且这也是他们在你可以发货任何形式的垃圾并且取得成功的时间内一直在做的事情。

这种理念可能会带来一些订单，只要没有其他工厂或国家提供更便宜的垃圾。

价格是向底线比赛。

中国一直是世界上最大的垃圾提供商吗？它是否有像日本那样的传统工艺和质量可依靠？

日本能够使Deming的教导制度化，因为这与一个被称为“物作り”（Monozokuri）的古老传统相吻合。直译过来，它意味着制造（zukuri）事物（mono）。然而，这个翻译丢失了很多意义。一个更好的翻译应该是“制造；工艺；或手工制作事物”。

在我们的生活中，有很多故事可以看到和理解Monozokuri。它印在我们购买的每一个日本产品上。例如，一瓶750毫升的12年老山崎威士忌的售价为210.99美元；而一款像巴尔文尼双木桶这样的不错的苏格兰单一麦芽威士忌的价格只有山崎的三分之一。那么为什么人们购买山崎？它是不是比巴尔文尼好三倍？根据个人经验，我可以说，这是因为：1. 事实上它更好，接近单一麦芽威士忌的完美；2. 饮用那种特别的东西的愿望。

那么，中国，作为世界上最古老的文明之一，是否缺乏像物作り那样的质量传统？还是它在今天的制造垃圾的竞争中被吞噬了？

当你在由Royal Copenhagen、Wedgwood、Villeroy & Boch等制造的盘子上享用晚餐时，它被称为“精美瓷器”。事实上，除了产品起源地是中国（唐朝、清朝等时期他们制造了部分由牛骨制成的骨瓷、以及红色如血的、青花瓷器等），这些餐具与中国没有任何关系。然而，正如我妻子张雨婷在她2018年发表在我自己的博客I, sourcerer (www.isourcerer.com)上的文章中所哀叹的那样，“名字叫做精美瓷器，为什么没有中国品牌？”当今市场上的所有高端中国产品实际上都不是来自中国。

背后的答案是令人悲伤的，但它指引着我们解决这个问题的正确方向。实际上，中国有一个传统，叫做“造物”，它是负责我们在今天的世界上理所当然地认为的许多事物的传统。ChatGPT将这一传统与物作り进行比较：

“值得注意的是，虽然“物作り”一词通常与日本的制造哲学和文化联系在一起，但中国自己的工艺和制造传统与精确性、注重细节和追求卓越的类似原则相一致。中国的“造物”一词捕捉到了这一传统的本质，强调创作和精湛工艺，这在中国的历史上一直受到重视。”

这段历史是在何时发生的？早在汉朝（公元前206年至220年），指南针、火药和造纸术等创新就已经出现；宋朝（960年-1279年）创造了可移动的活字印刷术；明朝（1368年-1644年）见证了伟大的舰队和长城的建造；清朝（1644年-1912年）见证了疫苗的首次使用，农业工具的改进和数学知识的进步。

那么发生了什么？这些发展被一个陈旧而分裂的政治体系所掩盖，这个体系把自己与世界隔离开来，并且失去了对西方列强的控制，这些列强唯一的成就就是部署海上船只和先进武器。另一方面，日本在1868年的明治维新中实现了国家的统一。

然后，邓小平，怀着良好的意图，而不是回到中国独特的传统，鼓励人们实用主义，去做其他国家成功的事情。“能抓住老鼠的猫是好猫。”太多、太快。许多原来生活在贫困和无名之中的中国人看到了一个比以往更快脱离他们的阶级的机会，至少在经济上是这样。而且，有了美国和欧洲作为乐于购买的顾客，这一切变得容易起来。所以，就这样吧，全速前进，质量被速度和贪婪所压制。

所以，我们现在就在这里，Temu和Shein通过他们似乎无穷无尽的资金大包大揽获得了巨大的国际知名度，并成为了“Cheap China”的旗舰。而成千上万的工厂（可能包括那些在Temu和Shein上销售的工厂）则遭受了业务或利润或两者同时急剧下降的困境。

需要发生什么变化？从这一方面来看，我们的立场是需要改变一些东西（如果不改变会发生什么将在下一节中讨论）。由于中国的劳动力成本上升，劳动人口老龄化和减少，恢复过去二十年的幼稚历史的机会已经没有了。但是中国可以成为国际市场的一个重要参与者，并从中获得巨大的利益。

首先，中国的工厂需要提高质量标准。不再满足于只是“够好”。与此同时，政府和企业需要提供资金和支持，以帮助工厂进行技术升级和改进，以提高产品的质量和竞争力。

其次，中国需要加强知识产权保护。这是一个长期存在的问题，对中国的声誉造成了负面影响。中国政府应该采取更加严厉的措施打击侵犯知识产权的行为，并加强对知识产权的保护和执法。

此外，中国还应加强对环境保护的重视。中国是全球最大的碳排放国，应该采取更多的措施减少污染并转向可持续发展。通过推动清洁能源和环保技术的发展，中国可以提高其环境声誉，并为全球可持续发展做出积极贡献。

最后，中国应该积极参与国际合作和对话。通过加强与其他国家的合作，中国可以改善其国际声誉，并促进共同发展和繁荣。这包括在贸易、文化交流、教育和科技合作等领域展开更广泛的合作。

总之，要重建中国的声誉、尊重和业务，中国需要改变其质量标准，加强知识产权保护，关注环境保护，并积极参与国际合作。这些改变将有助于提高中国产品的质量和竞争力，树立中国作为负责任和可持续发展的国家的形象，从而重塑中国的声誉和尊重。

Part III: China textile and apparel 2023: The Party’s Over and China needs to invite a Deming to the next party--What needs to change in China to rebuild China’s reputation, respect and business?

 Article Abstract: Textile and Apparel business in China is suffering badly. Some or all of the following factors can be held responsible: 1. Political relations and the continuing Tariffs; 2. China’s reputation for cheap and poor quality product which is, at least partially, justified by evidence; 3. Sluggish domestic demand due to the lockdown and poor economy in China; 4. Due to some or all of the above, significant resourcing to alternative countries such as Vietnam.

In this article, we suggest that the only long-term solution for China is to rebuild its reputation for quality product and fashion innovation, just as Japan did in the 1950’s using the lessons of W. Edwards Deming’s teachings as a platform. Combined with this, China factories need to build their own brands which a. don’t scream Cheap and b. stand up to other international brands in style and quality.

But, China factory owners are resisting change, starting to panic and are lost for any solution except to find someone who may sell their product for commission. But, what would they be selling other than “Cheap China?”

Finally, we predict that, if some factories don’t lead the way to a new direction for China, the Chinese textile industry will crash and burn or, at best, be relegated to the mass market in such outlets as TJ Maxx and Walmart. Part of this is due to the bifurcation and consolidation of the US retail economy: The middle level department store base is disappearing, leaving only either competition for the mass market at rock-bottom prices or premium and luxury brands sold DTC or on platforms like Net-A-Porter and FarFetch. In addition, many new and innovative brands are appearing almost daily. The only Chinese online alternatives to those platforms are SHEIN and TEMU, which are by nature cheap and poor quality, and the innovative Chinese brands are rarely seen by overseas customers.

The Chinese textile industry will have to have a Reckoning, just as the American auto industry did in the 1970s and 1980s (as described by David Halberstam in his Pulitzer Prize-winning 1986 book): The world has changed; the way you did things and the things you got away with in the past are gone. If you don’t face the reality of the world today, you will also be gone.

III. What needs to change in China to rebuild China’s reputation, respect and business?

Let’s do two things first: 1. Look at the situation in China now 2. Look at the cultural foundation and see if there is a strong tradition/basis to fall back on or are we stuck with the now.

Where are we now in China? As I wrote in 2017 on my blog www.isourcerer.com in the article, “China Quality- Good Enough is Not Good Enough”, there is no internally-generated quality standard for most factories (I have visited many hundreds), except for that which is generated by customers. Passing inspection and shipping the product only requires “good enough.”

So what is the problem with that? Mainly, it serves the evaluation of “cheap china.” And secondarily, it discourages investment in something better which is internally generated. Factory owners think, “Why should I spend money to improve if the buyers accept what I am shipping now?” Here’s the answer to that question with another question: IF your buyers ACCEPT shit because they EXPECT shit, is that good enough for you? Buyers don’t pay premium prices for shit, and when some factory or country comes along with cheaper shit, you lose. Some companies, like Temu and Shein, have correctly diagnosed that the American consumer WILL accept shit as long as they pay shit prices. This perpetuates the story. So cheap china ACCEPTS the title of chief purveyor of shit, because It is the only way they know of to compete with other countries with lower labor costs AND it is what they have been doing all along during the time you could ship any form of shit and be successful.

That philosophy may get some orders, as long as there isn’t another factory or country with CHEAPER shit.

Price is a race to the bottom.

Was China always the world’s leading provider of shit? Does it have a tradition of craftmanship and quality to fall back on as Japan does?

Japan was able to instititutionalize Deming’s teaching because it aligned with an ancient tradition which is called Monozokuri. “ Literally translated, it means to make (zukuri) things (mono). Yet, there is so much meaning lost in translation. A better translation would be “manufacturing; craftsmanship; or making things by hand.” 

There are so many stories in our lives to see and understand Monozokuri. It is stamped on every Japanese product we buy. For example, a 750L bottle of 12 year old Yamazaki Malt Whiskey sells for $210.99; a decent Scottish Single Malt like Balvenie Double Wood can be had for 1/3 of the price of the Yamazaki. So why do people purchase the Yamazaki? Is it three times as good as the Balvenie? From personal experience, I can say that it is because: 1. It is, in fact better, as near to perfection as single malt gets and 2. The aspirational dimension of drinking something that special.

So is China, one of the world’s oldest recognized cultures, devoid of a quality tradition like Monozokuri? OR has it been swallowed up in today’s race to make shit?

When you serve dinner on plates made by Royal Copenhagen, Wedgwood, Villeroy & Boch etc. it is sold to you as “fine china.” IN fact, this dinnerware has nothing to do with China except the origin of that product was China—during the Tang, Qing, dynasty etc. where they made bone china (partially from cow bone) like blood red, Jihong or blue and white porcelain antiques from those eras. But, as my wife Yuting Zhang bemoaned in her 2018 article published on the I, sourcerer (www.isourcerer.com) blog, “The Name is Fine China; so Why is there no Chinese Brand?” none of the premium China on the market today is actually FROM China.

The answer behind this is sad, but points us in the right direction for solving this problem. There is, in fact, a tradition in China called "造物" (zào wù) which translates to “creation.” It was this tradition which was responsible for much of what we take for granted in today’s world. ChatGPT describes this tradition as compared to Monozokuri:

“It's worth noting that while the term "Monozukuri" is often associated with Japanese manufacturing philosophy and culture, China's own tradition of craftsmanship and manufacturing aligns with similar principles of precision, attention to detail, and the pursuit of excellence. The Chinese term "造物" captures the essence of this tradition, emphasizing the act of creation and skilled craftsmanship that has been valued throughout China's history.”

When did that history take place? As early as the Han Dynasty (206 BCE- 220 CE, innovations like the compass, gunpowder and papermaking took place; The Song Dynasty (960-1279) created advancements like movable type printing were created; the Ming Dynasty (1368-1644) saw a great fleet and the Great Wall built; the Qing Dynasty (1644-1912) saw the first use of vaccines, improvement in agricultural tools and advance mathematical knowledge. 

So what happened? These developments were overshadowed by an antiquated and fractured political system which isolated itself from the world and lost its control to the Western powers whose only achievement was the deployment of seagoing ships and advance weaponry. Japan, on the other hand, united the country during the Meiji Restoration in 1868.

Then, Deng Xiao Ping, with all good intentions and rather than fall back on China’s unique tradition, encouraged people to be practical and do what worked for other countries. “The cat that catches mice is a good cat.” Too much, too fast. Many Chinese, who had been mired in poverty and anonymity, saw an opportunity to move out of their class, at least financially, quicker than ever. And it was easy, with the US and Europe as willing customers. So it was damn the torpedoes, full speed ahead and quality was crushed under the need for speed and greed.

So here we are, with Temu and Shein gaining huge international popularity through their seemingly endless pocketbooks and becoming the flagship of Cheap China. And thousands of factories (Probably including those that sell on Temu and Shein) suffering precipitous drops in business or profit or both.

What has to happen? From this end, our position is something needs to change (what will happen if nothing does will be discussed in the next section). Since labor costs are increasing in China and the working population is aging and shrinking, there is no chance to revive the naïve history of the last twenty years. But China can be two important things to the international marketplace: 1. The JIT (Just In Time) resource with still huge capacity for materials and production and 2. The location for growth of artisanal production in the spirit of zao wu.

It is the last one that we believe is what needs to be the focus of all, but especially textile and apparel manufacturers in China: Create their own brands that stand up to international competition, yet fully utilize the resources that are still strong in China: skilled labor, quality materials, coupled with fast and efficient production, short transportation leadtimes.

The how and why of this strategy depends on the industry but, as strange as it may seem in the red ocean of digital players, there are still huge holes and opportunities because most of the products online are echoes of each other, ho-hum and not worthy of customers’ attention. So the factories will ask, what can I do? The answer:

1. First, STOP. Put your ego away for a while. 

2. Understand and accept the fact that the situation has changed; the days of easy money and good-enough quality are gone; 

3. Adopt a quality standard that is great, not just “good enough,” based on your pride as an artisan, not a wholesaler of cheap goods; something you can be personally proud of.

4. Don’t expect to pay someone commission to sell what you made; make what your customer wants to buy;

5. Accept the fact that you need to spend some of the money you made so easily on future growth;

6. Don’t be in a hurry; it will definitely happen, but not tomorrow or the next day;

7. Call on the spirit of zao wu and the team efforts of talented people (not just in China, especially in the target market countries like US) to create a Unicorn;

8. Understand that you should be making a product whose price is determined by its value, not the other way around;

9. Let the product speak first so the fact whether it was made in China or not becomes invisible, as is the case with Samsung and LG made in Korea or Kia or Toyota etc.

10. Operate under the main goal of Blue Ocean Strategy: Make the Competition Irrelevant

11. Remember that your brain is your moat; even if competitors want to copy you (Good! Sun Tzu—Shape Your Opponent), they can’t copy your creativity.

12. Obey the (Chinese) strategy of Salami Slicing or The Frog in Warm Water- By the time the competition realizes that you are a threat, it is too late.

13. Read the next section for the consequences if you don’t heed the above.

This is not just a paradigm change, but a game changer, for Chinese entrepreneurs and manufacturers. There is a unique history,  tradition and an infrastructure to support this change. If you were a manufacturer in say, Bangladesh, you wouldn’t have any of this to lean on, so your road to success with this strategy would be that much harder. 

Most important, as the Japanese did, there has to be an emerging national spirit of pride in Chinese Manufacture as the site of the world’s oldest tradition of creativity and innovation. This has to be an initiative of the people, not Beijing. This is people, not government.

Further, these changes require investment and patience. They will not happen overnight and they will not happen if the only thing in the manufacturers’ mind is to sell what they make and pay some poor soul commission to try to peddle it. They need paid apostles: those who are also passionate about the goals but who are fairly paid for their work; no risk, no reward.

What will happen if nobody pays attention and nothing changes? There will be a Reckoning.

(Chinese translation of this article available on this blog)

(请使用英语语言写作)

Part II: 中国纺织服装业2023年：派对结束了，中国需要邀请一个戴明来参加下一个派对 莲花与迈克尔的观点2023年：四个部分的改变者

 II. W. Edwards Deming是谁，他在1950年告诉了日本人什么？

（有关Deming及其遗产发展的更多细节，请观看此视频。）

在第二次世界大战期间，Deming向美军讲授了关于质量控制的战时课程后，他应日本科学家与工程师联合会（JUSE）的邀请，前往日本讲授统计质量控制课程。他的讲座促进了日本有效的基于统计的质量过程体系的发展，也为现在被称为PDCA（计划-执行-检查-行动）的创新框架奠定了基础。

Deming进行了一系列六次讲座，其中包含了许多改变了日本的概念和理解，并且至今仍在遵循的内容。同样是JUSE从1951年开始授予“Deming奖”给杰出的企业。

以下是该系列讲座的一些亮点：

他的开场白：“我们正处于一个由统计原理和技术主导的新工业时代。我将尝试解释这些原理和技术如何帮助日本增加出口贸易。”

非常重要且简单的观点：“质量必须在生产的每个环节中发生。” 这意味着，将质量控制基于最终检验，等到产品已经存在问题且不符合要求后再进行价值增加的环节，是一种浪费时间和金钱的做法。

Deming的著名的14个观点之一是“改善竞争地位”，赋予客户在质量管理和改进中的关键角色。

Deming改变了旧有的“设计-制造-尝试销售”的方式，采用了PDCA的方法：

设计产品（包括适当的测试）。

在生产线和实验室中进行制造和测试。

把产品投放市场。

通过市场调研在服务中测试产品。了解用户对产品的看法，以及为什么非用户没有购买。

根据消费者对质量和价格的反应，重新设计产品。

不断重复以上循环。

我将这个概念称之为“生产可销售的产品，而不是试图销售已经生产的产品”。这也是亚马逊的模式，并对其成功做出了巨大贡献。

以下是Koiesar的文章中的两个图表，对此具有重要意义：

请注意，这里的质量过程是基于过程而不是结果的。这意味着在产品完成并准备好发货之前，已经对材料进行了测试，并在制造过程中的不同阶段进行了测试。因此，最终检验在很大程度上只是一个形式上的步骤。

为什么这样更好？因为问题可以在更多材料和人力投入之前被识别出来，并且可以隔离问题流程或工人。（请注意，绝大多数服装供应商和买家使用的是AQL，这是一个在80％产品准备好发货时进行的基于统计的最终检验过程。）

我尝试在90年代初从中国进口汽车报警器时实施了Deming的控制方式，并且在作为GoldToe Moretz公司采购副总裁时与每家工厂合作时也是如此。这就像试图教一只鸡跳芭蕾舞一样困难。最后，我访问了一家在编织后进行完整检验的印度工厂。袜子的制作过程中，90%的生产集中在编织上，之后只需完成封口、整理和包装。当然！为什么要花费金钱、时间和人力来加工袜子，然后只在整个过程完成后进行检查呢？这就是Deming质量哲学的核心。

接下来是PDCA循环或“设计循环”的图形表示：

这是我之前提到的区别的核心，即制造可销售的产品，而不是销售您能制造的（或已经制造的）产品。

还请注意，这是一个持续循环，所以为了使该过程成功，必须长期致力于这个过程。

那么为什么不是每个人都这样做呢？这么简单并且有很大道理。主要原因是：a. 它需要更多时间，b. 它成本更高，c. 它需要对这个过程有耐心和承诺。大多数工厂（不仅仅是中国的）和买家都不愿意遵循这个过程，或者管理层不会推动它，而是选择随意尝试并发货。

Deming在1950年的第一次讲座中指出，应该“将供应商融入到生产系统中，并共同对其质量负责，而不是将他们视为外部人员和对立者。” 这是一个重大问题，不仅局限于中国，而且是买家普遍存在的一种态度，他们把“工厂”看作是一种非生命的物体。

当工厂生产出品质无可争议、无可指责的产品，并且不为了订单而妥协时，这种态度才会停止。

Deming的系统逻辑而且有效，因此他仍然被研究。那些从未听说过Deming，只听过“统计质量控制”和“全面质量管理”这些词，却对Deming本人和他的原则一无所知的人会错误地将其误解为一种依赖于统计数据的方法论；这是非常错误的。是的，Deming相信统计在质量和改进管理中起着重要作用，但他决不是数字的盲目追随者；相反，他强调“控制图不能替代大脑”，并且“在制造厂进行质量控制时，结合接受抽样是最好的保护措施。检查很多并只挑选最好的产品是不经济的。”

我有幸在20世纪70年代中期在纽约大学斯特恩商学院（NYU Stern）上过Deming的一门课。尽管现在我后悔没有更多地吸收他的言论，但我清楚地记得他的教学和他的信息之所以引人注目，是因为你实际上并不需要记笔记，因为他的教学都是那么通俗易懂。

日本制造商吸收并融入Deming的教训的结果就是历史。今天，日本产品不再代表廉价产品，在许多领域都有资格竞争“世界最佳”的称号。材料和制造产品无疑是优秀的，并且能够取得较高的价格。顾客愿意为质量付费，这增加了产品的价值，并且对提供质量的品牌充满热忱。我可以根据自己的经验列出一份清单，但我相信你知道我的意思。

对于中国是否也是如此？它是否应该如此？它能否如此？如果应该并且能够，为了使其成功，需要进行哪些改变？

Part II- China textile and apparel 2023: The Party’s Over and China needs to invite a Deming to the next party

 II. Who is W. Edwards Deming and what did he tell the Japanese in 1950?

(For more details about Deming and the development of his legacy, watch the video here.

After teaching wartime courses to US forces on quality control during WWII, Deming was invited to lecture on Statistical Quality Control in Japan by the Union of Japanese Scientists and Engineers (JUSE). His lectures gave rise to development of effective statistically-based quality process systems in Japan and the framework for innovation now known as PDCA (Plan- Do- Check- Act).

Deming gave a six-part lecture series which contains many of the concepts and understandings that changed Japan and are still followed today. The same JUSE started awarding a “Deming Prize” to the outstanding firms in 1951.

Here are some highlights of the series:

 His opening- "We are in a new industrial age created largely by statistical principles and techniques. I shall try to explain how these principles and techniques are helping Japan to increase her export trade.” 

Super important and super simple: “Quality had to happen at all stages in the "chain

of production.””  This means, quite simply, that basing quality control on final inspections after the damage has already been done and value added to an unacceptable product is a waste of time and money.

What later became part of Deming’s famous 14 points was “improved competition position,” giving the customer a key role in quality management and improvement. 

Deming changed the old way of Design it-Make It-Try to sell it to what is known as PDCA:

1. Design the product (with appropriate tests).

2. Make it, test it in the production line and in the laboratory.

3. Put it on the market

4. Test it in service through market research. Find out what the user thinks of it, and why the nonuser has not bought it.

5. Redesign the product, in light of consumer reactions to quality and price.

6. Continue around and around the cycle.

I would refer to this concept as “make what you can sell, don’t try to sell what you make.” This has been and is Amazon’s paradigm and is a big contributor to their success.

Two illustrations from Koiesar’s article are material here:

  

Note that the quality process here is process-based not result-based. What this means is that by the time the product is finished and ready for shipping, it has already been tested- materials, and at various times during the manufacturing process. So final inspection is, for the most part, a formality.

Why is this better? Because problems can be identified before more material and labor is put into them, and problem processes or workers isolated. (Note that the overwhelming majority of apparel suppliers and buyers use AQL, which is a statistically-based FINAL inspection process that takes place when 80% of the product is ready for shipment).

I tried to implement Deming’s style of control when I was importing car alarms from China in the early 90’s, and in every factory that I worked with as the VP of Sourcing for GoldToe Moretz, a socks company. It was like trying to teach a chicken to dance ballet. Finally, I visited one factory in India that was conducting a full inspection after knitting. The way socks are made, 90% of the production is focused on knitting; all there is after that is closing the toe, boarding (shaping) and packing. Of course! Why spend money, time and labor to process the sock and only inspect after the entire process is finished? This is the essence of Deming’s quality philosophy.

Next is graphic representation of the PDCA cycle or “Design Cycle”:

This is the essence of the difference I mentioned before, making what you can sell as opposed to selling what you can make (or have made).

Also note that this is a continuous loop, so for this process to be successful, it must be something that is committed to for the long term.

So why doesn’t everyone do this? It’s so simple and makes great sense. The main reasons are because a. it takes more time, b. it costs more, and c. It requires patience and commitment to this process. Most factories, not just in China, and buyers are not willing to follow this process, or management won’t facilitate it, opting for throwing shit against the wall and shipping what sticks.

Deming’s first lecture in 1950 stated that there should be: “The integration of the suppliers into the production system and the need to take a shared responsibility for their quality, instead of treating them as outsiders and antagonists.”   This is a big issue that is not relegated to China, but is a prevalent attitude of buyers who refer to “the factory” as if it were an inanimate object. 

When this stops is when the factory produces something whose quality is undeniable and unimpeachable and where they don’t compromise anything for an order. 

Deming continues to be studied because his system is logical and it works. Those who never heard of Deming and heard the words “Statistical Quality Control” and “Total Quality Management” without knowledge of Deming himself and his principles will mistake it for a statistics-dependent methodology; that would be very wrong. Yes, Deming believed that statistics play and important role in Quality and Improvement management, but he by no means was a blind follower of numbers; conversely, he emphasized that “the control chart is no substitute for the brain”  and that "The best protection is afforded by acceptance sampling

done in conjunction with quality control at the manufacturing plant. It is not economical to try to get a good product by inspecting a lot and taking up only the best ones." 

I was lucky enough to have Deming as a professor for a course at NYU Stern in the mid-1970’s. While I now regret not absorbing more of what he said, it is clear to me that the striking aspect of his teaching and his message is that you didn’t really need to take notes because it all made such common sense.

The result of Japanese manufacturers absorbing and incorporating Deming’s lessons is history. Today, rather than representing cheap product, Japanese products justifiably compete for the title of “world’s best” in many areas. Material and manufactured product are unquestionably superior, and command a superior price. Customers pay for quality, which builds value, and are passionately loyal to brands that provide it for them. I could make a list from my own experience, but I believe you know what I mean..

Is that the case for China? Should it be? Can it ever be? If it should and can, what changes need to be made for it to be successful?

(Questions to be answered in next part)

中国纺织服装业2023年：派对结束了，中国需要邀请一个戴明来参加下一个派对 莲花与迈克尔的观点2023年：四个部分的改变者

中国纺织服装业2023年：派对结束了，中国需要邀请一个戴明来参加下一个派对

莲花与迈克尔的观点2023年：四个部分的改变者

（另附的文章已翻译成简体中文）

I. 2023年中国纺织/服装出口商的情况以及原因。中国目前的纺织和服装情况如何？

II. 谁是W. Edwards Deming，他在1950年告诉了日本人什么？

III. 为了重建中国的声誉、尊重和业务，需要做出哪些改变？

IV. 如果不这样做，中国纺织和服装业会像美国汽车业一样面临清算吗？

文章摘要：中国的纺织和服装业正面临严重困境。以下一些或全部因素可能负有责任：1. 政治关系和持续的关税；2. 中国以廉价和劣质产品的声誉，这在一定程度上是有事实依据的；3. 中国国内需求低迷，受到封锁和经济疲软的影响；4. 由于上述一些或全部原因，大量资源转向越南等其他国家。

在本文中，我们建议中国唯一的长期解决方案是重建其优质产品和时尚创新的声誉，就像日本在20世纪50年代使用W. Edwards Deming的教导所做的那样。除此之外，中国工厂需要建立自己的品牌，既不是“廉价”品牌，也能与其他国际品牌在款式和质量上媲美。

但是，中国工厂的所有者对改变持抵制态度，开始恐慌，并且除了寻找可能为他们销售产品的人之外，他们对任何解决方案都感到迷茫。但是，他们能销售的又是什么，除了“廉价中国”？

最后，我们预测，如果一些工厂不引领中国朝着新的方向发展，中国的纺织业将会崩溃或者被降级为如TJ Maxx和沃尔玛等大众市场的销售对象。这部分原因是由于美国零售经济的分化和整合：中档百货商店正在消失，只剩下与大众市场以极低价格竞争或高端和奢侈品牌在直销渠道或者Net-A-Porter和FarFetch等平台销售。此外，几乎每天都会出现许多新的创新品牌。中国在线销售平台的替代选择只有SHEIN和TEMU，这两者都是以廉价和劣质为特点，而创新的中国品牌很少被海外客户看到。

中国纺织业将不得不面临一个清算，就像美国汽车业在20世纪70年代和80年代所经历的那样（正如大卫·哈尔伯斯塔姆在他获得普利策奖的1986年著作中所描述的）：世界已经发生了变化，过去的做事方式和过去能够逃脱的事情已经不存在了。如果你不面对当今世界的现实，你也将消失无踪。

I. 2023年中国纺织/服装出口商的情况以及原因。中国目前的纺织和服装情况如何？

中国的纺织和服装业陷入了困境。自中国加入世贸组织并取消配额制度以来的20多年里，再也没有容纳更多的制造商与美国客户做生意并出口产品，并在此过程中获得财富（无论是相对的还是真实的）。这是一个农业经济，几乎一夜之间转变为全球强国，位居世界工厂的第一位。只要开个工厂，卖点东西（不必太好），你就会有很多客户。

在沃尔玛的带领下，他们从中国购买了70-80%的产品，大量廉价商品充斥在美国的商店和网站上。梅西百货等百货公司也跑去中国，参与到比价格更低的游戏中，而不是坚守中产阶级的本源。因此，似乎转眼间，每个人都想从中国购买东西（这里的“shit”是以质量为评判标准）。消费者们面对到处都是廉价商品的海洋时，他们将价值定位从价格决定价值转变为价值由价格决定。

让我们来看看数据，但需要事先说明：这些数据有误导性。

根据美国商务部报告，2021年的数据如下：

“2021年，中国仍然是美国纺织品进口的主要来源。2021年，美国从中国进口了503亿美元的纺织品，占美国纺织品进口总额的32.6%。”

还有2022年的数据：

“2022年，中国仍然是美国纺织品进口的主要来源。美国进口额从2021年的503亿美元增长了6.7%（34亿美元），达到537亿美元，占美国纺织品进口总额的29.7%。”

看起来一切都好，对吧？但我们发现了几个问题：1. 2022年是非疫情年，进口额应该增加（2018年为5380亿美元，因此总体上才刚刚达到疫情前的水平）；2. 如果中国在2022年保持了相同的美国进口额，那么它本应多做11亿美元的生意；3. 根据给出的数据，美国对这些商品的进口额从2021年增长了18.2%，所以中国的增长确实是占比较小的一部分；4. 这些数据反映的是2022年实际收到的货物，因此根据4-6个月的计划周期，很大一部分商品是在2021年订购的。

无论如何看待这些数据，尽管进口额有所增加，但从2021年到2022年，中国纺织和服装进口明显减少。在2022年收到的订单并在2023年交付的情况下，进口量将进一步减少。

更糟糕的是，很明显中国的工厂正在牺牲价格和利润，只是为了发货。看一下这个数据：

中国的服装进口量占了35%，但只有22.2%的价值。另一方面，越南的进口量占15.9%，但价值却占了18.4%。这对你来说意味着什么？廉价中国正在变得更便宜，而越南则在要求更高的价格。

现在，我们应该对中国纺织和服装行业的情况有了一定了解，以及为什么中国制造商感到迷失和绝望。情况只会变得更糟。

所以，如果你是中国制造商，你会问自己：“我该怎么办？”很明显，这里适用于“疯狂定义是做同样的事情两次，却期望不同的结果”。中国和中国的经济需要不同的结果。纺织和服装所占中国进口的10%，如果有所减少，将对经济和就业产生重大影响。我们可以肯定的是，基于该行业（不仅仅是中国）已经确立的模式，工人将承受减少的冲击，而所有者并不会从自己的银行账户中拿出任何东西。

最后，中国经济增长疲软和不稳定对世界经济产生重大影响。

本文中我们提到了W. Edwards Deming，一个20世纪50年代的美国统计学家和质量控制专家，对日本工业的发展产生了重大影响。在接下来的部分中，我们将探讨他在日本所做的事情，以及中国是否能够借鉴他的经验来重建纺织和服装业。

China textile and apparel 2023: The Party’s Over and China needs to invite a Deming to the next party Lotus & Michael Perspective 5-2023: A Game Changer in four parts

This is part 1 of 4 parts, as outlined below. Each subsequent part will be released separately at a later date. IF you wish to inquire about the next release, email mserwetz@gmail.com

(The article under separate cover is translated into Simplified Chinese) Link to Chinese Translation

I. The situation for Chinese textile/apparel exporters in 2023 and why it is what it is. What is the current textile and apparel situation in China?

II. Who is W. Edwards Deming and what did he tell the Japanese in 1950?

III. What needs to change in China to rebuild China’s reputation, respect and business?

IV. If not, will there be a Reckoning for China textile and apparel like there was for the US Auto Industry?

Article Abstract: Textile and Apparel business in China is suffering badly. Some or all of the following factors can be held responsible: 1. Political relations and the continuing Tariffs; 2. China’s reputation for cheap and poor quality product which is, at least partially, justified by evidence; 3. Sluggish domestic demand due to the lockdown and poor economy in China; 4. Due to some or all of the above, significant resourcing to alternative countries such as Vietnam.

In this article, we suggest that the only long-term solution for China is to rebuild its reputation for quality product and fashion innovation, just as Japan did in the 1950’s using the lessons of W. Edwards Deming’s teachings as a platform. Combined with this, China factories need to build their own brands which a. don’t scream Cheap and b. stand up to other international brands in style and quality.

But, China factory owners are resisting change, starting to panic and are lost for any solution except to find someone who may sell their product for commission. But, what would they be selling other than “Cheap China?”

Finally, we predict that, if some factories don’t lead the way to a new direction for China, the Chinese textile industry will crash and burn or, at best, be relegated to the mass market in such outlets as TJ Maxx and Walmart. Part of this is due to the bifurcation and consolidation of the US retail economy: The middle level department store base is disappearing, leaving only either competition for the mass market at rock-bottom prices or premium and luxury brands sold DTC or on platforms like Net-A-Porter and FarFetch. In addition, many new and innovative brands are appearing almost daily. The only Chinese online alternatives to those platforms are SHEIN and TEMU, which are by nature cheap and poor quality, and the innovative Chinese brands are rarely seen by overseas customers.

The Chinese textile industry will have to have a Reckoning, just as the American auto industry did in the 1970s and 1980s (as described by David Halberstam in his Pulitzer Prize-winning 1986 book): The world has changed; the way you did things and the things you got away with in the past are gone. If you don’t face the reality of the world today, you will also be gone.

I. The situation for Chinese textile/apparel exporters in 2023 and why it is what it is. What is the current textile and apparel situation in China?

The China textile and apparel business is in trouble. After more than 20 years, since China was admitted into the WTO and quotas were abolished, there isn’t room for one more manufacturer to do business with US customers and export their product, getting rich (comparatively or really) in the process. Here is a peasant economy that was transformed almost overnight into a global powerhouse, ascending to the #1 position as the world’s factory. Just open a factory, sell something (it doesn’t have to be great), and you will have lots of customers. 

Led by Walmart, who buys 70-80% of their product from China, immense volumes of cheap goods filled American stores and sold on websites. Department stores like Macy’s ran to China to get into the cheaper-than-thou game, rather than stick to their middle-class roots. So, in what seemed like the blink of an eye, everybody wanted to buy shit from China (that word used qualitatively). What happened on the consumer side was, confronted by a sea of cheap shit everywhere, the average consumer (not just the struggling ones who needed to buy cheap) flipped their value proposition from price is determined by value to value is determined by price.

Let’s look at the numbers, which we will say up front are deceiving:

For 2021, according to the US Department of Commerce report:

“In 2021, China remained the major source of U.S. imports of Textile Products. In 2021, U.S. imports of $50.3 billion of Textile Products from China constituted 32.6% of the total U.S. imports of Textile products.” 

And 2022:

“In 2022, China remained a major source of U.S. imports of Textile Products. U.S. imports increased by 6.7% ($3.4 billion) from $50.3 billion in 2021 to $53.7 billion, constituting 29.7% of the total U.S. imports of those commodities.” 

All good, right? We see several issues: 1. 2022 was the first non-pandemic year so it stands to reason imports should go up (they were $538 billion in 2018 so overall they were just reaching pre-pandemic levels; 2. Had China had the same piece of US imports in 2022, it would have had $1.1 billion more business; 3. Based on the numbers given, US imports of those commodities increased 18.2 percent from 2021 to 2022, so China’s increase was indeed a smaller piece of the pie; 4. These numbers reflect what was received in 2022, so based on the planning cycle of 4-6 months, much of the goods were ordered in 2021.

Any way you look at it, despite the increase, there is a clear erosion of textile and apparel imports from 2021 to 2022. Orders received in 2022 and delivered in 2023 will show a further erosion. 

Here’s the worst part: Clearly China factories are shipping goods just to ship goods and are sacrificing price and profit. Take a look at this:

 

 Apparel Imports from China were 35% of the quantity but only 22.2% of the value. On the other hand, imports from Vietnam were 15.9% of the quantity and 18.4% of the value. What does that mean to you? Cheap China  is getting cheaper while Vietnam is commanding higher prices.

Now, we should have an idea of what is happening in the textile and apparel sector from China and why Chinese manufacturers feel lost and desperate. This will only get worse.

So the question if you are Chinese manufacturer is (or should be), “What should I do?” It is clear that the definition of insanity applies here: trying to do something the same way twice and expecting different results. China and China’s economy needs different results, especially in the textile and apparel industry. The 10% of imports from China that apparel and textile represents cannot erode without significant effect on the economy and employment. We can guarantee that, based on clearly established patterns of the industry (not just in China) that the workers will bear the brunt of any reduction; the owners are not giving back anything from their bank accounts.

Finally, weak economic growth and disruption in China has a significant effect on the world economy.

The rest of this article will build a case for a sea change in China’s apparel and textile industry, the same sea change that Japan made to transform the tagline of “Made in Japan” from cheap to one of the world’s best. 

Those who read this and know China will wonder whether the culture and experience since Deng Xiao Ping declared that some people should get rich first is so embedded at this point that it minimizes or eliminates the possibility of positive change. We believe it can happen, led by the younger generation, the sons and daughters of the people who got rich first and the easy way. But it won’t happen until the older generation steps aside AND the government lets it happen.

Next, we take a look at what happened starting in 1950 Japan, led by W. Edwards Deming, which led to Japan’s current position on the world’s quality product scale. THIS is the example China should follow.

AI for Dummies? Are we all dummies now? What do we do about generative AI?

 

Here’s my take on AI:

It is positively Darwinian- The WSJ Opinion that inspired this article (by three distinguished fellows, including Henry Kissinger) compared it to the technology that printed the Gutenberg Bible in 1455. I would go a step further and compare it to the meteor that hit Chicxulub in the Yucatan 65 million years ago which left a crater 150 miles wide and changed the civilization of the earth.  (This is a great metaphor- the dinosaurs who had ruled the earth became extinct and what we know as birds survived)(i)

It is Darwinian because only those that adapt will survive. Many will become extinct.

Of course, our natural System 1(ii) reaction is to fear that which we don’t know. Images of The Terminator and 50+ years of Doctor Who scare the snot out of us. Dinosaurs in our society and particularly in Government will try to squash it. Too late. It ain’t going away. The cat is out of the bag.

Bottom line for me: It is a blessing of technology which, if handled well, can reposition our relationship with technology with unknowable positive effects.

AI is not human; it will never be. Its “brain” is more powerful than ours—and it isn’t. The parts of our brain which have developed to handle insight, creativity, empathy, etc. have not been duplicated. If you ask ChatGPT, it will tell you the same.

So how do we dummies deal with generative AI and what will be the result? Answer-as always-depends.

One great result of the advent of generative AI is that we have the opportunity to rethink our relationship with technology. We all know people and companies that accept technology as superior to human effort because it is technology. Countless billions has been spent on Canned Vegetable software (Canned vegetable are already cooked; you can’t change them), with the result often ranging from disappointing to disastrous (I knew a CFO who committed suicide after realizing that he had led the way to an expenditure of millions for a software that just didn’t work). 

Now we have the opportunity to reassess our relationship with technology, understanding that it can’t totally replace us, then figuring out how and what we can gain from this remarkable advance in technology so it serves us without enslaving us.

The authors of the WSJ Opinion offer some remarkable insights regarding humans (they refer to us as Homo Technicus:

First, will we be able to recognize what the technology can and cannot do? This is critical to produce the result of maximizing the software without minimizing ourselves:

“Will we be able to recognize its biases and flaws for what they are? Can we develop an interrogatory mode capable of questioning the veracity and limitations of a model’s answers, even when we do not know the answers ahead of time?” (iii)

Second, what must we do to create and maintain this relationship?

“It is important that humans develop the confidence and ability to challenge the outputs of AI systems.”

“It is urgent that we develop a sophisticated dialectic that empowers people to challenge the interactivity of generative AI, not merely to justify or explain AI’s answers but to interrogate them.”

We will have to learn new behaviors, and shitcan the automation bias:

“Humans will have to learn new restraint. Problems we pose to an AI system need to be understood at a responsible level of generality and conclusiveness. Strong cultural norms, rather than legal enforcement, will be necessary to contain our societal reliance on machines as arbiters of reality. We will reassert our humanity by ensuring that machines remain objects.”

The problem with this, in my opinion, is that there are far too many selfish and even evil dumbasses in positions of authority, both in business and government. There is a huge risk of pollution of what could be a great leap for mankind. (I am willing to bet that most of us can name names if asked—I can)

One of the areas most directly impacted by generative AI is education. So how do we as educators incorporate this powerful tool into our curricula without squashing human insight and creativity?

The authors offer their recommendation:

“Teachers should teach new skills, including responsible modes of human-machine interlocution. Fundamentally, our educational and professional systems must preserve a vision of humans as moral, psychological and strategic creatures uniquely capable of rendering holistic judgments.”

I agree with this. So far, and I know we are only at the beginning of this journey, what has been successful for me as an instructor (NYU SPS, Division of Programs in Business, Integrated Marketing & Communication) is to encourage students to use ChatGPT. Ask it questions (which I phrase so they all get the same answer), then 1. Assess the validity and completeness of the answer and 2. Critique the response by acknowledging what is workable and what is missing.

Up to now the students’ responses to this method are two: 1. A healthy respect for the capabilities of generative AI and 2. An equally healthy skepticism and caution not to accept the responses at face value. ChatGPT is a team member; it does not replace either the professor or the students’ intellect AND emotion (important AND). Our brains can be a healthy combination of System 1 and System 2 which I believe generative AI will have hard road to duplicate, if it ever can.

Of course, as always we have to be wary of bad actors and incapables advertising themselves as saviors of the world of AI and offering to triple quadruple etc. as has been the case with Ecommerce up to now. Even in a short time, there are countless web sites that promise to help you understand and use AI; my reaction to the ones I checked is, other than take my money, what can you do that I can’t? My question is, if so many people can come out of nowhere to build your Ecommerce business or your SEO shouldn’t it be easy enough for you to do yourself? Same goes for generative AI. With some effort, we dummies can learn what needs to be learned to maximize our relationship with this technological tool.

So the answer is that we who question and adapt AI to our needs are NOT dummies; those that enslave themselves to it OR seek to control how we use it are the dummies—and the enemy.

  i New Scientist, “Chickxulub: A Massive Asteroid that hit Earth 65 million years ago” https://www.newscientist.com/definition/chicxulub/#:~:text=asteroid%20the%20size%20of%20a,The%20impact%20was%20devastating.

  ii Decision Lab, “System 1 and System 2 Thinking,” https://thedecisionlab.com/reference-guide/philosophy/system-1-and-system-2-thinking

  iii Henry Kissinger, Eric Schmidt and Daniel Huttenlocher, WSJ Opinion 2/24/2023, “ChatGPT Heralds an Intellectual Revolution,” https://www.wsj.com/articles/chatgpt-heralds-an-intellectual-revolution-enlightenment-artificial-intelligence-homo-technicus-technology-cognition-morality-philosophy-774331c6

(All following quotes from this source)