Marjorie Yang has witnessed firsthand the progress China has made over the last 20 years. It was evident on her way to the Beijing airport for her flight to New York, when she stopped at an electronics factory that had been converted into an art gallery to have a latte with a friend.
"It just didn't feel like Beijing, it felt like I had already arrived in New York," said Yang, chairman and chief executive officer of Esquel Group, the world's largest producer of cotton shirts. "The most amazing thing was the ladies' room. It was incredibly beautiful. If I had time I would have changed these slides to show you those pictures. It's just been amazing."
Yang's awe at China's advances in caffeine and plumbing fade quickly, however, when she considers the challenges facing Esquel and the country's apparel and textiles industry as a whole. She is aware that China's momentum is in danger of slowing if the country fails to take the next step and transform itself into something other than the world's low-cost manufacturing hub.
"The perception that China is the world's factory in turning out low-value products is largely true," said Yang. "However, this certainly gives rise to trade friction as well as questions of sustainability."
According to Yang, China accounts for one-third of the world's fiber production and is the largest consumer of cotton in the world, a fact that has played to the advantage of the U.S. cotton industry. "In fact, China imports more than 1.5 million tons of cotton annually from the U.S.," said Yang. China's textile mills also have 70 million spindles, more than one-third of the world's total, according to Yang.
The end result is China is responsible for churning out 42 billion pieces of apparel annually and, as Yang noted, more than half of that production is for its domestic market. Large brands are in the process of hooking those consumers, said Yang, and are a major force fueling changing attitudes.
"Brands such as Nike are capturing the hearts of the Chinese consumer," said Yang.
She is now in the position of making sure Esquel doesn't get left behind, which involves adopting a different set of business philosophies and practices.
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