Two years after opening his garment factory in Myanmar, Li Dongliang is on the verge of closing down and laying off his 800 remaining workers.
Business had been struggling because of the COVID-19 pandemic, but after a Feb. 1 coup that sparked mass protests and a deadly crackdown, during which his factory was set alight amid a surge of anti-Chinese sentiment, orders stopped.
His story is emblematic of the perilous situation facing a sector critical to Myanmar’s economy, which accounts for one-third of its exports and employs 700,000 low-income workers, UN data showed.
Illustration: Yusha
“We would have no choice but to give up on Myanmar if there are no new orders in the next few months,” said Li, adding that he has been operating at about 20 percent capacity, surviving only on orders placed before the coup, and has already shed 400 staff.
Li said that he and many of his peers are considering moving to other low-cost garment hubs such as China, Cambodia or Vietnam, as big fashion brands such as H&M and Primark have stopped trading with Myanmar due to the coup.
Chinese nationals like Li fund nearly one-third of Myanmar’s 600 garment factories, and are by far the largest investor group, the Myanmar Garment Manufacturers Association said.
At least two other Chinese-funded garment factories in Myanmar, employing a combined 3,000 workers, have decided to close, said Khin May Htway, managing partner of MyanWei Consulting Group, which advises Chinese investors in Myanmar.
She said the two firms were her clients, but declined to identify them citing privacy.
Foreign investment in garments surged in Myanmar over the past decade as economic reforms, an end to Western sanctions and trade deals helped establish the sector as the greatest symbol of its nascent emergence as a manufacturing hub.
Garment shipments from Myanmar rose from less than US$1 billion in 2011, about 10 percent of exports, to more than US$6.5 billion in 2019, about 30 percent of exports, UN Comtrade data showed.
However, the sector has been rocked by the pandemic, which plunged the world into recession and choked consumer demand, resulting in tens of thousands of garment factory jobs lost in Myanmar and elsewhere in Asia.
Then the coup happened.
In the weeks that followed, many garment workers joined protests or could not get to work as streets became battlegrounds. The turmoil also jammed the banking system and made it difficult to get goods in and out of the country, factory owners said.
With international condemnation of the coup growing, European and US fashion brands last month issued a statement through their associations saying they would protect jobs and honor commitments in Myanmar.
However, many have recently halted orders there, including the world’s second-biggest fashion retailer, Sweden’s H&M, the UK’s Next and Primark and Italy’s Benetton.
Next said it would split its orders previously going to Myanmar between Bangladesh, Cambodia and China, while Benetton said it would mainly move business to China.
H&M and Primark have not commented on how they plan to redistribute orders.
In Vietnam, garment factory owner Ravi Chunilal said he was starting to receive more business from European buyers diverting from Myanmar.
“They don’t want to abandon Myanmar ... but it’s being forced upon them,” said Peter McAllister, executive director of Ethical Trading Initiative, a labor rights organization whose members include high-street European brands.
McAllister said it would be very difficult for Myanmar’s garment sector to recover if Chinese investors left.
Anti-China sentiment has risen since the coup, with opponents of the takeover noting Beijing’s muted criticism compared with Western condemnation. It was against this backdrop that several Chinese-funded factories, including Li’s, were torched by unidentified assailants during a protest last month.
Rights groups have repeatedly raised concerns about exploitation in Myanmar’s garment sector, where mostly female workers earn as little as 4,800 kyat (US$3.41) a day, the lowest rates in the region.
Yet it has provided an escape from poverty for many, as workers have migrated from rural areas to the factories, mainly around the commercial hub of Yangon, and send money back to their families.
Khin Maung Aye, managing director of Lat War garments factory, which employs 3,500 people, said the sector faces collapse if the military does not restore a democratically elected government.
That would result in “terrible outcomes of poverty,” he said, adding that he was staying afloat on orders placed before the coup, but feared orders for next season, normally due later this month, would dry up.
The US, which has imposed targeted sanctions on Myanmar’s military, late last month suspended trade talks with it, and said that it was reviewing its eligibility for its Generalized System of Preferences scheme, which reduces tariffs and provides other trade benefits for developing countries.
That could “portend future disruption” for Myanmar’s garments sector, said Steve Lamar, president of the American Apparel & Footwear Association, which represents more than 1,000 fashion brands.
Yet some unions representing garment workers have called on the international community to impose tougher sanctions to press the military, even though it might further damage their industry.
“I accept orders moving away,” Myo Myo Aye, founder of the Solidarity Trade Union of Myanmar, said through a translator. “Workers would face difficulties and hardship because there would be no jobs. On the other hand, we simply don’t accept the military regime.”
Donald Trump’s return to the White House has offered Taiwan a paradoxical mix of reassurance and risk. Trump’s visceral hostility toward China could reinforce deterrence in the Taiwan Strait. Yet his disdain for alliances and penchant for transactional bargaining threaten to erode what Taiwan needs most: a reliable US commitment. Taiwan’s security depends less on US power than on US reliability, but Trump is undermining the latter. Deterrence without credibility is a hollow shield. Trump’s China policy in his second term has oscillated wildly between confrontation and conciliation. One day, he threatens Beijing with “massive” tariffs and calls China America’s “greatest geopolitical
US President Donald Trump’s seemingly throwaway “Taiwan is Taiwan” statement has been appearing in headlines all over the media. Although it appears to have been made in passing, the comment nevertheless reveals something about Trump’s views and his understanding of Taiwan’s situation. In line with the Taiwan Relations Act, the US and Taiwan enjoy unofficial, but close economic, cultural and national defense ties. They lack official diplomatic relations, but maintain a partnership based on shared democratic values and strategic alignment. Excluding China, Taiwan maintains a level of diplomatic relations, official or otherwise, with many nations worldwide. It can be said that
Chinese Nationalist Party (KMT) Chairwoman Cheng Li-wun (鄭麗文) made the astonishing assertion during an interview with Germany’s Deutsche Welle, published on Friday last week, that Russian President Vladimir Putin is not a dictator. She also essentially absolved Putin of blame for initiating the war in Ukraine. Commentators have since listed the reasons that Cheng’s assertion was not only absurd, but bordered on dangerous. Her claim is certainly absurd to the extent that there is no need to discuss the substance of it: It would be far more useful to assess what drove her to make the point and stick so
The central bank has launched a redesign of the New Taiwan dollar banknotes, prompting questions from Chinese Nationalist Party (KMT) legislators — “Are we not promoting digital payments? Why spend NT$5 billion on a redesign?” Many assume that cash will disappear in the digital age, but they forget that it represents the ultimate trust in the system. Banknotes do not become obsolete, they do not crash, they cannot be frozen and they leave no record of transactions. They remain the cleanest means of exchange in a free society. In a fully digitized world, every purchase, donation and action leaves behind data.
RSS