Are You Wearing Communist Clothing?

Look closely at the tags on your clothes. Actually, never mind-they might not be saying much.

The production of skateboarding’s softgoods are part of a larger worldwide trend of U.S./Asia relations that’s really quite interesting. Really, interesting.

What Comes From Where?

The various materials used in softgoods are resourced from various Asian countries, and the list can be long and confusing. “China is ruling the world in 80/20 cotton poly-fleece,” says Sole Technology’s director of apparel research and development Mike Green.

China is also popular for hoodies, shirts, pants, crews-and Satori gets their hemp there, too. Nylons and wovens are generally manufactured in Vietnam, Taiwan, and Korea. More technical fabrics-like those used in outerwear-come from Indonesia and Japan. India provides yarn-dye wovens, cut-and-sew cottons, and cotton-blend shirts; and Thailand yields knits, polo shirts and-for Giant Distribution-backpacks.

Tim Sedo is a Ph.D student specializing in Chinese Social and Cultural History at the University of Toronto. “Everything is made in China,” he says. “It is a matter of finishing and knowing the actual sources.” Sedo takes several trips to China each year and is in constant contact with Chinese skate-industry heads.

Although China is the world’s largest manufacturer of softgoods, Korean manufacturing is often sought by companies trying to avoid being identified with exploiting cheap Chinese labor. “What is not commonly known is that their projects will then be contracted out to manufacturers in China,” explains Sedo.

The goods are largely made in China and then finished elsewhere, i.e., putting on labels. “This middleman process costs foreign manufacturers more money than they know,” says Sedo. “Most have no clue that their products are actually being made in China.” On the other hand, Sedo explains, “Many American companies (that manufacture in Asia) know about this situation but pay this extra cost because these other Asian countries essentially ‘deal with China’ for them.” After years of close business relations with China’s manufacturing markets, these Korean liaisons have contacts and access to quality Chinese factories that foreign companies just can’t resource. That “Made In Korea” on your shoes may not be entirely accurate.

Land Of The Rising Factory

Why China? Here’s a brief history lesson: population-wise, China is the largest market in the world but they’ve had their doors shut to Western business since the Communist era of Mao ending with his death in 1977. Since then, more reformist-minded liberals have led China’s juvenile industries into a new era of trading with the world. This enormous thrust into the fickle nature of global economic trends made Chinese manufacturers extremely flexible. As Sedo puts it: “To this day, Chinese manufacturers are the most resilient, resourceful, and mutable producers in the world.”

The Bottom Lines

It all boils down to price and quality-Asia has both. Chinese labor is cheap. Producing domestically with the American minimum wage, “We price ourselves right out of the market,” comments Atlas Distribution’s head of production, Chris Engel. Engel says Chinese factories also have a high standard of quality and efficiency that’s hard to match.”They’ve developed the garment industry in the last twenty or 30 years to the point they’re better at making garments than you can get in the U.S.,” echoes Dwindle’s president Rob Valerio.

And they’re high-tech, too: “Since manufacturing is such a large piece of Asian economies,” adds Savier’s Scott Roberts, “they constantly have the most recent technology for applications and embellishments.”

In addition to the technical fabrics that just can’t be made Stateside within the high-quality and low-cost parameters, Asia is also a reliable source of alternative fabrics and natural fibers. “It’s hard as heck to find any hemp here in America,” says Satori’s Craig Nejedly.

Counterfeit And The Black Market

In Asia, blems and seconds often find their way into local markets. Trademarking laws are being broken because it’s difficult to enforce them overseas.

Of course a company’s size and depth of involvement can help curb this. Atlas Distribution, for example, is part of a major corporation and can afford to keep a close eye on its overseas production. “We have a very tight reign on our product in general. If you’re a smaller company, you don’t have that luxury,” says Atlas’ Engel. Other companies like Dwindle and Sole Technology return all seconds to the factories, where they’re de-labeled of all identification. These garments are then likely sold within the country of origin.

As for the blems that do slip through the cracks with labels still affixed, Sedo claims that they find their way to an appropriate market. “These blems are only sold in hard-to-find stores,” he says. “In the skateboarding sense, you could find some solace in knowing the blems are sold out of more ‘core stores to skateboarders who otherwise couldn’t afford the product.”

There is a black market in Asia whether American companies know it or not, but that doesn’t mean it’s a bad thing. The black market in China may actually be responsible for building brand awareness and potential markets. A Chinese factory will often deliberately over-produce its foreign client’s quota, bill the company for these products, and then sell these products in “special” stores on local markets. Chinese skaters who can’t afford to pay international value for these brands can keep up with current trends via this system. As China is getting richer, much of the population will eventually be able to afford foreign brand-name goods as the name will have already been built up. As Sedo explains, “Many foreign brands that are now sold at retail value built up their name through this type of black-market distribution (i.e., Tommy Hilfiger and Polo). Companies like Alphanumeric now have licensed dealers in Shanghai,” he says. “But they only acquired name-brand status through their initial sales on the black market.”

While this inadvertent avenue of promotion may be debatable in its effectiveness and future promises, foreign companies are saving money, regardless, on manufacturing in the long run. “This sale, in my opinion, is huge,” says Sedo. “I got many pairs of skate shoes in China this summer for under five bucks U.S.”

The issue of counterfeit product is always present-Thailand being the current hotbed. And again, it’s the larger companies that can afford to stop the problem, although it might not be worth the effort. In countries like China, counterfeit goods are undesirable to the youth. “Fakes are easy to tell apart and people are often laughed at for buying them,” explains Sedo.Savier’s Roberts comments, “It’s (counterfeit goods) sold only on the local markets for unknowing tourists and locals and doesn’t affect retail sales.”At best, counterfeiting has been the source of peculiar stories. Dwindle’s Valerio has come across Blind knock-offs that read “Blinded” or have spaceships circling the Blind Reaper mascot. These tees were made with low-resolution Dwindle logos from the Internet that were blown up sloppily and screened on tees. Valerio has brought such items back to his office where he says their artists chuckle at the guerrilla artwork.

Stüssy’s Robbie Jeffers had a salesman in Japan aggressively push a counterfeit Stüssy T-shirt at him, which ended in an argument about its authenticity. He’s also seen Stüssy ponchos in Mexico: “I know we didn’t make those-for some reason you can only find those in Mexico.”

“I saw Stevie Williams on a Stüssy shirt in Japan once,” he says. “I was laughing.”

Made In The U.S.A.

While these days it may seem unprofitable and downright abnormal, there are companies that continue to produce softgoods right here in the U.S. The main advantage being control. Luciano Mor is the president of Elwood and Aesthetics apparel, and Chris “Slappy” Sutherland is the West Coast product m
anager for DNA Distribution’s brands. They both rely on the Los Angeles garment district and have both expressed the gamble in overseas production. “Overseas stuff sometimes is like throwing the dice,” explains Mor. “You send over designs-you need to have the luxury of time for one thing-often, three months later you get a sample and it’s total garbage, and you pretty much lost your entire window for making that garment.”

Sutherland notes the cost may be a little higher Stateside, but he can make just as high-quality goods and isn’t at the mercy of a fabric supplier on the other side of the Pacific. “The main product right now is jeans, and I’m sorry, but Chinese jeans look lame,” says Slappy. “You just can’t beat American denim. If you were to take Alien jeans and compare them to Levi’s-we can stand head to head with them. I learned to make clothing in a Levi’s factory.”Mor feels the same way-the quality of his homemade goods are ultimately more important than the end price. “If we’re exporting U.S.A.-made denim, it’s going to be expensive over there (Europe),” he says of the reality of foreign trade. “For the moment, that’s just the way it is.”

Control over local production also trickles down to their factory seconds and blems. The whereabouts of their seconds are no mystery, and coincidentally Sutherland and Mor handle them the same way. “I give a lot of it away to kids in the inner city who have nothing,” says Sutherland.Mor explains, “Kids who live around here would never be going into a skate shop and buying a 70-dollar pair of jeans,” he says. “We kind of hook up all the local down-and-out kids.”

New World Order

Times they are a changin’ as the global economy melds into one, and production managers are constantly looking to new places that are bound to pop up and rival China in their cost-to-quality ratio. Atlas’ Engel states, “Vietnam and South Africa are quota-free right now, and it makes it that much cheaper to produce,” he says. “I think Vietnam might be the next China.”

Satori’s Nejedly has even dabbled closer to home, “Central America is actually pretty smooth,” he says. “The tax rates aren’t so bad. I tried some stuff in Honduras.”

Even China in the long run will prove a more promising land of resource. Sedo explains, “With China’s ascension into the WTO and the opening and reforms of the Chinese stock markets-Shanghai, Shenzhen, Hong Kong-the process has become far more streamlined and foreigner friendly and probably will continue along this road.”

It’s an endless search to deliver the highest-quality goods for the lowest price to the consumer, and the world’s only getting smaller.

Tim Sedo aided in the research for this article. He’s a second year Ph.D student at the University of Toronto focusing in Late Imperial and Modern Chinese Social and Cultural History. He is available for consulting, translating, interpreting, etc., and can be reached at tsedo@hotmail.com or tim.sedo@utoronto.ca.

Facts Only: China Versus The U.S.A.

China:

Population: 1,284,303,705
Population growth rate: 0.87%
Net migration rate: -0.38 migrant(s)/1,000 population
GDP (Gross Domestic Product): purchasing power parity-$5.56-trillion
GDP real growth rate: 7.3%
Population below poverty line: 10%
Inflation rate (consumer prices): 0.8%
Labor force: 706-million
Unemployment rate: urban unemployment roughly 10%; substantial unemployment and underemployment in rural areas.
Industrial production growth rate: 9.9%
Exports: $262.1-billion
Exports-partners: U.S. 21%, Hong Kong 18%, Japan 17%, South Korea, Germany,
Netherlands, UK, Singapore, Taiwan.
Imports: $236.2-billion
Imports-partners: Japan 18%, Taiwan 11%, South Korea 10%, U.S. 10%, Germany,
Hong Kong, Russia, Malaysia.
Debt-external: $167-billion
Economic notes of interest: The GDP has quadrupled since 1978. In 2001, with its 1.27-billion people but a GDP of just $4,300 per capita, China stood as the second-largest economy in the world after the U.S. (measured on a purchasing power parity basis).

U.S.:

Population: 280,562,489
Population growth rate: 0.89%
Net migration rate: 3.5 migrant(s)/1,000 population
GDP: purchasing power parity-$10.082-trillion
GDP real growth rate: 0.3%
Population below poverty line: 12.7%
Inflation rate (consumer prices): 2.8%
Labor force: 141.8-million (includes unemployed)
Unemployment rate: 5%
Industrial production growth rate: -3.7%
Exports: $723-billion
Exports-partners: Canada 22.4%, Mexico 13.9%, Japan 7.9%, UK 5.6%, Germany 4.1%, France, Netherlands.
Imports: $1.148-trillion
Imports-partners: Canada 19%, Mexico 11.5%, Japan 11.1%, China 8.9%, Germany 5.2%, UK, Taiwan.
Debt-external: $862-billion
Economic notes of interest: The U.S. has the largest and most technologically powerful economy in the world, with a per capita GDP of $36,300. In this market-oriented economy, private individuals and business firms make most of the decisions, and the federal and state governments buy needed goods and services predominantly in the private marketplace. U.S. business firms enjoy considerably greater flexibility than their counterparts in Western Europe and Japan in decisions to lay off surplus workers and develop new products. At the same time, they face higher barriers to entry in their rivals’ home markets than the barriers to entry of foreign firms in U.S. markets.

Information taken from the CIA’s World Factbook 2002, which can be accessed at cia.gov/cia/publications/factbook.