China | Industrial clusters

Bleak times in bra town

One-product towns fuelled China’s export boom. Many are now in trouble

|GURAO

A PYRAMID of bras stands beside each worker at the Honji Underwear factory in Gurao, a town in the southern province of Guangdong. The workshop resounds with the clack-clack of sewing machines as employees repeat their single, assigned task before passing the garment on to the next person on the production line. Most of the 22,000 thickly padded bras made here each day are destined for shops in China. In this “Town of Underwear”, as the local government likes to call it, there are thousands of similar factories. Gurao produces 350m bras and 430m vests and pairs of knickers a year for sale at home and abroad. Undies account for 80% of its industrial output.

Across Gurao, billboards show big-breasted—usually foreign—women sporting the lingerie that underwires the town’s prosperity (see picture). But many people in Gurao and other underwear-factory clusters around Shantou, a coastal city, worry about the future. Costs are rising, but customers are unwilling to pay more, says June Liu of Pengsheng Underwear, which makes lingerie and swimwear. Last year several factory-owners fled from Gurao, leaving debts and unpaid wages. Some also shut up shop in Chendian, another underwear town nearby.

During the past three decades of rapid economic growth, one-industry towns like Gurao and Chendian sprang up along China’s eastern seaboard, often in what were once paddyfields. With investment from Hong Kong and Taiwan, and a huge influx of migrant labour from China’s interior, they fuelled the country’s export boom. There are now more than 500 such towns, making products such as buttons, ties, plastic shoes, car tyres, toys, Christmas decorations and toilets (see map).

Knickerbocker glories

Gurao is one of several underwear hubs that have made China the world’s largest lingerie producer. The country made 2.9 billion bras in 2014, 60% of the world’s total, according to Frost & Sullivan, a consultancy. In several industries, the clustering of similar firms in the same place creates a critical mass of good suppliers and workers with relevant skills. Niche towns in China produce 63% of the world’s shoes, 70% of its spectacles and 90% of its energy-saving lamps.

All this growth has had an environmental cost. In 2010 Greenpeace, an NGO, reported that fabric-dyeing plants in Gurao had severely polluted the water, making it unfit to drink. But the bra-makers of Gurao are far more worried about foreign competition than foreign eco-warriors.

China’s consumer goods grabbed a huge share of global markets thanks to their low prices. That advantage is fading. Since 2001 wages have risen by 12% a year. Thailand and Vietnam, where labour is cheaper and taxes lower, now make lingerie for global brands such as Victoria’s Secret and La Senza. China’s biggest underwear firm, Regina Miracle, will open two factories in Vietnam this year, its first outside China. It plans another two there by 2018. Cambodia and Myanmar are joining the fray. Wacoal, a Japanese underwear-maker, opened factories in both countries in 2013 and another in Myanmar last year.

Gurao still has advantages, such as excellent supply chains. Several factories there make components for undergarments: dyed textiles, lace and the tough foam used to upholster push-up bras. Every form of elastic waistband used for boxer shorts is produced locally. The town also appears to enjoy loose regulation of trademarks. Some of the waistbands use misspellings such as “Calven Klain” and “Oalvin Klein” in an attempt to cash in on famous brand names.

Officials in Gurao insist that the town can overcome its difficulties by upgrading its technology and using machines instead of people. But attracting the capital and skill to transform Gurao may be more difficult than the daring step taken by a local entrepreneur in 1982 when he opened its first bra factory, at a time when private enterprise was still frowned on in China.

Even China’s largest underwear manufacturers have always found it hard to get long-term commitments from buyers. That has made them reluctant to spend on research or technology. Some factories in Gurao are upgrading, for example by making seamless laser-cut underwear and using new, more comfortable, materials to underwire bras. But most remain low-tech and labour-intensive.

Because they are dominated by private enterprises, towns such as Gurao may be nimbler at adapting to changing market conditions than China’s steel and coal cities, where 1.8m layoffs are planned in the next few years. In 2013 migrant workers made up nearly half of Gurao’s 161,000 people. Many are low-skilled, moving from one job to another, sewing the same part of the bra as they did in the previous factory. Most did not complete high school and are ill-equipped to retrain for jobs in service industries, which the Chinese government hopes will replace manufacturing ones. But luckily most of them have houses and farmland to go back to in their villages if they lose their jobs.

Some of the one-product boomtowns could fade away, leaving little behind but the concrete shells of empty factories and polluted soil. Gurao and other such places have generated extraordinary wealth in once dirt-poor parts of the country. But to thrive in the future, they will need to look beyond the bare necessities.

This article appeared in the China section of the print edition under the headline "Bleak times in bra town"

Beautiful minds, wasted: How to deal with autism

From the April 16th 2016 edition

Discover stories from this section and more in the list of contents

Explore the edition

Discover more

Who is up and who is down on China’s economic team

Xi Jinping is in charge. The rest need sorting

A gruesome murder sparks a debate about juvenile justice in China

A system that had become more merciful is being tested


Chinese nationalists have issues with “3 Body Problem”

The show is a hit in the West. But its history lesson is not for everyone