Bloomberg News reports today that Wal-Mart is breaking its addiction to Chinese take-out, and ordering Indian instead. The retailer’s purchases of cheap clothing from India is in part a response to the fact that China is thinking about revaluing its currency, and suddenly India looks like a cheaper producer. So, goodbye Chinese sweatshops. Bloomberg says that Wal-Mart has hiked its purchases from India by 30% to $1.5 billion this year. Wal-Mart now has 86 employees working in a purchasing office in Bangalore, India. “We could export a lot more,” boasts Wal-Mart International Chief Executive John Menzer If China revalues the yuan, Wal-Mart’s prices could rise by 10% over the next two years, analysts told Bloomberg. The U.S. government has been urging China to revalue its currency to slow down the importation of Chinese goods into America. Wal-Mart has 45 stores in China, and its international division has much more growth potential than its U.S. stores, where the company is cannibalizing its own units. Last year Wal-Mart imported $18 billion in clothing and other merchandise from China. That’s the equivalent of $49.3 million in Chinese imports daily, or $2 million an hour, $34,246 a minute. That’s almost twice as much as Wal-Mart bought in from China in 2001 ($10 million).Wal-Mart buys more from China than Britain does. India now looks attractive because of its cheap labor. India’s cost of producing clothes is 1% cheaper than China, Bloomberg News reported. Target, which is just Wal-Mart with an attitude, imports goods from India, Pakistan and Vietnam. “So if there is inflation (in China), it’s possible some programs would move,” the CEO of Target said. Wal-Mart last year bought $1.2 billion in Indian goods, mostly clothing.
Third world factories to companies like Wal-Mart and Target are just opportunities of the moment, and in a heartbeat can be dropped. People in China lose their contracts, as workers in Vietnam or India pick up new business. For the American retailers, these factories can be discarded if monetary policies change, or really for any reason at all. There is no job security in the Third World. These factories exist at the pleasure of the American buyers. Shirts that were once made in South Carolina, were shifted to maquiladora sweatshops on the Mexican border, then to China, now to India. The retailer has no liability, because it owns no factories, and can switch and swap contracts on a moment’s notice. We get cheap underwear, the Third World worker gets low wages, no benefits, deplorable working conditions, and absolutely no job security. When we buy Wal-Mart products, we are supporting global exploitation. Just who is getting exploited today may be different than who was exploited yesterday, but the only constant is the exploitation itself. In this case, Chinese workers will lose their livelihood when the Chinese government caves into U.S. pressure and raises the value of its currency against the dollar.
