China’s Foreign Trade Collapses! Century-Old US Textile Giant Pulls Out, 90% of Factories Close

It's hard being a boss these days. The first thing you ask is how much you get paid a day. You want me to guarantee your pay? Who's going to guarantee mine? China's economy keeps sliding, investment is slowing, consumer spending is weak, and exporters are under enormous pressure. To stay afloat, business owners are cutting jobs and wages. Some simply disappear. Just after the National Day holiday, workers return to their factories to find the equipment gone and their bosses unreachable. Their supposedly guaranteed pay vanished overnight. After the National Day holiday, many people went back to work and found their companies gone. On the very first day back, the company had already moved out. Don't ask me why. This happens every year. But this year is definitely the worst. It's very clear where things are headed. No business is viable anymore. Guys, we came back from the National Day holiday and everything was gone. The boss ran off. This National Day is different. It's a wave of businesses shutting down together. A whole bunch of companies disappeared over National Day. I posted a video late September, saying that many bosses simply couldn't hold on anymore. A lot of them would run off during the holiday so they wouldn't have to settle unpaid wages. I know this because a friend told me outright that he was going to do it. The hole they were in was so deep that paying wages was no longer possible. Now the holiday isn't even over, but I came to our business park early to take a look. As far as I know, seven companies have already moved out during this holiday. That's outrageous. Imagine how many companies have disappeared across all of Guangzhou. So, if you're an employee, you'd better check on your company. Otherwise, by the time you find out, you'll have nowhere to turn. Especially live streaming companies. Most are barely hanging on, and they're the most likely to run off. Factories today are fighting for their lives. Here's the reality. It's 2026 and anyone still keeping a factory running is no ordinary person. Just look at the market. Price competition has reached the point where companies take orders at a loss. That might sound foolish, but it really isn't. If they don't take the orders, they have no way out. They still have to pay workers and rent. If the machines stop, they're just waiting to die. Taking an order at least gives them a little breathing room. But do the math. Raw material prices haven't fallen at all. Wages and social insurance costs rise every year. While customers keep pushing prices down, squeezed from both sides, there's no profit left. Sometimes, they're really working for nothing. Yet these factory owners, who complain all day, still show up at the factory on time the next morning. Without this work, they wouldn't know what else to do. After running a factory for more than a decade, you can't just walk away. To put it bluntly, people still in manufacturing aren't staying because they're so successful. They're staying because they simply can't let go. Foreign investment has been leaving China faster in recent years. Even a century-old American textile giant can no longer hold on. On September 3, Cone Denim announced plans to close its Jiaxing factory by the end of 2026 and consolidate production in Mexico. The U.S.-owned premium denim producer is based in Jiaxing Economic Development Zone in Zhejiang Province. No entry signs have already been posted in the factory's production area. More than 1,000 employees face changes to their jobs. One person familiar with the situation said severance would follow the N plus 1 formula, one month's pay for each year of service, plus one additional month's pay. Some long-term employees could receive substantial payouts of more than 100,000 yuan. Many long-term employees have worked at Cone Denim for eight or nine years, or well over a decade, and are deeply reluctant to see the factory go. More than 1,000 employees will face job changes, and some will lose their jobs outright. The Jiaxing factory was U.S. denim giant Cone Denim's only manufacturing base in China. In 2005, it invested 800 million yuan in approximately 35 hectares in the Jiaxing Economic Development Zone. It built a fully integrated factory handling spinning, weaving, dyeing, and finishing. Cone Denim, the American denim brand under its parent company, was founded in 1891. It supplied Levi's in its early years and became a household name in the United States. Over the past few years, it has been consolidating operations in Mexico, where it has factories in Paracho and Yikapikla. Jiaxing was its only directly operated weaving and dyeing base in China. Now, after two decades in China, Cone Denim's local operations are coming to an end. For Jiaxing, the departure of a flagship foreign company will certainly have consequences. Tax revenue, jobs, and supporting businesses will all be affected. The closure of Cone Denim's Jiaxing Factory is no isolated case. Since the start of 2024, reports of long-standing textile factories shutting down have kept coming, revealing a sweeping reshuffle of the global textile supply chain. On June 1, Exquel Group, a leading contract manufacturer of premium shirts of 33 years in Ningbo, officially halted all production. Backed by Hong Kong's Exquel Group, the long-standing company mainly serves global mid-range and premium brands, including Ralph Lauren, Tommy Hilfiger, Hugo Boss and Nike. It exported a million shirts a year and was once flagship of export garment manufacturing in the Yangtze River Delta. One industry insider said with resignation, it's no longer about who earns more, it's about who can hold on longer. The broader economic data show a shocking pace and scale of companies being driven out of the industry. Export garment factories face pressure from orders moving elsewhere, rising overall production costs and stagnant growth in textile manufacturing alone. From January to May, China had 1,100 fewer textile and garment-related companies above the designated size than a year earlier. The number of textile manufacturers above the designated size fell by almost 400. A manager at a foreign-owned manufacturing company in the Yangtze River Delta, Miss Li, said multinational companies may close a production base as part of changes to their production lines. When orders fall, some companies in Jiangsu and Zhejiang move production to Vietnam or other countries. Others close a production line but keep their sales and technical services. Many upstream businesses have now shut down too. Next year's business environment will probably be worse than this year's. The Chinese Communist Party's National Bureau of Statistics released the figures on August 27. From January to July 2026, textile companies above the designated size recorded revenue of 1.24 trillion yuan, that was up 2% from a year earlier. Total profits reached 32.7 billion yuan, up 8%. Over the same period, textile garments and apparel companies recorded revenue of about 560 billion yuan, down 3%, and total profits of 16.8 billion yuan. Ms Lee said those figures were polished up for the officials. The textile industry's decline began long ago, she said, making claims of rising profits implausible. She said, that's pure fantasy, complete nonsense. In recent years, market forces in China's economy has been suppressed as politics increasingly take over. A wave of nationalization has returned, and private businesses face systematic repression. What is called policy guidance really means putting politics above markets, security above efficiency, and control above development. In this environment, Foreign companies are leaving faster. Multinationals no longer trust the system to be predictable, property rights to be secure, or policies to remain consistent. Investors are voting with their feet and leaving. The withdrawal of foreign investment is not only draining quality jobs, it is also directly hitting export supply chains. Businesses upstream and downstream of exporters are being shaken as well. The outlook is increasingly bleak for small and mid-sized private companies that survive by supplying parts and components their upstream businesses. What follows is a deterioration across every part of business operations. Sales are falling, profits are shrinking, financing is hard to obtain and inventory is piling up. With awful indicators worsening at once, companies are fighting for survival. Small and mid-sized businesses fall first, but large companies are not spared. A wave of closures becomes inevitable, followed by a wave of unemployment. Workers lose more than wages and jobs. They lose hope for the future. Sales are falling, profits are shrinking, financing is hard to obtain, and inventory is piling up. With awful indicators worsening at once, companies are fighting for survival. Small and mid-sized businesses fall first, but large companies are not spared. A wave of closures becomes inevitable, followed by a wave of unemployment. Workers lose more than wages and jobs. They lose hope for the future. A woman with a master's degree recently broke down in tears on social media while describing how she had lost two jobs. She was laid off from her first job during a restructuring. At her second job, she was asked to leave because her performance fell short of expectations. To keep her job, she even offered to work without pay. She worked to become more efficient and was willing to learn and improve, but she was still asked to leave. Now she feels lost. I don't even know what I should do next. On September 29, a Bilibili content creator posted a video about her friends looking for work in Guangxi. Most jobs the friend found paid around 3,000 yuan a month, with no social insurance. They required 9-hour workdays and offered only 3 or 4 days off a month. She said she had thought 3,000 yuan a month was just an internet meme. The reality shocked her even more. She asked another friend in Guangxi who earns 3,000 yuan a month and took home about 2,500 after social insurance deductions. That friend had 4 days off a month and 2 children to support. She said she could accept low pay, but not low pay combined with long hours. Her older sister had once told her that any company that paid on time was a good company. She pushed back, that's what we're owed, this is money I've earned through my work. She added, I feel like we've been trained to be far too obedient. The creator's account struck a chord of viewers. One person said, at the steel mill, we work 12-hour shifts on a two-shift rotation, with no days off, for just over 6,000 yuan a month. I plan to stick it out a little longer, save some money and leave. I'm not asking for two days off a week anymore, or even one. I just want an eight-hour day. Another person said, I earn 3,000 yuan a month and work eight and a half hours a day. Sometimes I have to work overtime. With no overtime pay, there's no social insurance. Right from the start, the boss tried to make me handle both support work and design, two jobs, one paycheck. Young people face unprecedented pressure to find work. even signing up to be worked like a mule is this hard. One 25 year old woman looking for a job said she held a bachelor's degree from a premier university she had studied design and graphic art she said she was unmarried intended to remain child free and had undergone sterilization meaning she would not need maternity leave she would accept alternating five and six day work weeks as well as a 996 schedule 9am to 9pm six days a week she could come in at 3am for overtime and be on call around the clock. She wanted just 3,000 to 4,000 yuan a month. She would resign voluntarily after turning 35 to avoid causing trouble for the company, waive N plus 1 severance and work like a mule for life. And this was in Kunming, a provincial capital. The food delivery rider in this video graduated from the University of Manchester and spent 10 years in Britain. He had also ranked 6th in Shanxi's humanities track on the university entrance exam. After earning a master's degree in Britain, he returned to China but hit one dead end after another while looking for work. Despite his prestigious degree and years overseas, he faced a mismatch between his field and available jobs, a saturated domestic job market, and a lack of local internship experience. Some jobs offered around 3,000 yuan a month. After a long search for a suitable job and mounting pressure to cover living expenses, he was forced to deliver food. Amid China's economic downturn in 2020s. The wave of unemployed migrant workers returning to their hometowns has become a sensitive issue. Official figures show that millions have returned home early. Behind this are not just factory closures and low wages, but a systematic deterioration in the entire economic environment. Behind the wave of returning workers are fractured supply chains, manufacturing is moving abroad, exports face obstacles and capital is leaving, forcing many factories to halt production or cut jobs. Migrant workers, among the most vulnerable, are hit first. They have no stable contracts or social protection. Once a factory closes, their only choice is to pack up and return to the countryside. Today is September 20. So many people are going home. They're all waiting here to go back to their hometowns. There's one coach here, another behind it, and another one. Business has been so bad in September that lots of people are heading home. They're boarding now. Everyone's getting on. The vlogger said a group of workers in Guangdong had already packed up and headed home early. He had left home in March full of hope, determined to make a living. After struggling through to now, business was poor, and little remained of his earnings after rent and food. Staying would just mean wasting more money on rent. Reluctantly, he had no choice but to go home. China's economy is facing more than a temporary slump. It is facing a prolonged decline. Although official figures still show growth, many export business owners say the reality is very different. Trade restrictions in Europe and the United States have dealt Chinese companies a major blow. At the same time, a stronger yuan has reduced orders and profits, businesses are struggling to survive, and employees' incomes have fallen noticeably. On October 9, the head of a Chinese export company spoke to the worldwide Chinese media outlet NTD under the pseudonym Chen Fang. He said the economic downturn had hit investments, consumption and exports. Exchange rate changes, in particular, had caused substantial losses in company profits. Chen Fang said the yuan has strengthened from $7.2 to the dollar last year to $6.7 now. That means a 5% drop in profits for every exports company. This is a major blow to exporters like us, so things are getting harder and harder. Xu Guang is a pseudonym for the manager of a mid-sized export business in a coastal region. He said Chinese export volumes had fallen noticeably following two changes. The United States raised tariffs in 2025, and the European Union began taxing parcels in 2026. Xu Guang said, Our exports are definitely down from a year earlier. Last August, the United States raised tariffs on us. The US market used to account for 30% of our business. Now it accounts for only 15%. In July, the EU imposed a substantial parcel tax too. So the EU's 30% share is basically going to fall to 15% as well. Our overall trade volume is falling massively. Xu Guang said the European and US markets were continuing to shrink, while weak purchasing power elsewhere made it hard to keep doing business. All we have left now are less developed regions, such as Africa. We can't make a work in markets that lack purchasing power to begin with. Looking at the various indicators, my assessment is that exports are declining. As orders shrink, companies are also paying their workers less. Xu Guang admitted, Last year, I paid all my employees 13-month salary. This year, all I can guarantee is their basic wages, and even that's already a struggle. If this continues, everyone's income will definitely fall. The economy is definitely heading downward. According to China's General Administration of Customs, exports totaled 20.2 trillion yuan in the first eight months of 2026, up 14.6% from a year earlier. China's trade surplus approached US$1 trillion, US dollars, a record high. Yet at the same time, thousands of export factories were closing one after another, like falling dominoes. The contrast raises questions about what is really happening. A Chinese exports business owner, nicknamed Zhao Pu, questioned the claims of continued export growth. Zhao said, we shouldn't just look at those figures. Since the pandemic, I haven't believed a single punctuation mark in them. Things were that bad. Empty containers at major ports like Shanghai and Yantian were piled up like mountains. Exports plunged off a cliff, yet the figure still showed growth. There was no sign of where that growth came from.