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China’s once-booming textile and clothing industry faces tough times

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At the bustling Canton Fair in southern China, second-generation textile manufacturer Pan Jing has drastically marked down her prices.

The sign at her booth says it all: “Stock very cheap, factory for sale … stock clearance.”

It wasn’t an easy decision for Pan’s family to sell the 32-year-old cotton mill started by her father in 1986, a time when China was emerging as the global centre for textile and clothing production.

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For years, they have been making household cotton products – from pot holders and oven mitts to dishcloths and towels – and exporting them to the United States and Europe.

More recently they tried to upgrade their product lines at the 40,000 sq m factory in the southern Guangxi region, adding recycled cotton shopping bags and pillows in the shape of emojis in a bid to bring in more customers. But rising labor costs and slow growth in overseas demand left Pan with no choice but to sell the business to a bigger textile manufacturer with a domestic focus, in the hope that new capital can keep it afloat.

“I don’t see a future in continuing to sell these low-value goods,” said Pan, who has been attending the Guangzhou fair for over a decade. The trade fair, which runs until May 5, is the country’s oldest and biggest export-oriented event.

China’s textile and apparel makers are going through a painful industrial restructuring. While the country is still the world’s largest clothing exporter with enormous production capacity, oversupply at home, high labour costs, and rising global protectionism have all eroded its competitiveness.

Pan’s company brochures for the trade fair over the years reflect the changes in the industry. Six years ago, the tag line was “To be proud of Made-in-China”, while last year’s was “Low-carbon and environmentally friendly cyclical development”. This year they just had a flier made to advertise the stock clearance.

China’s market share by value in the global textile and clothing industry fell from 38.6 per cent in 2015 to 35.8 per cent in 2016, with a downward trend in major apparel importing regions such as the US, European Union and Japan.

Since 2014, exports of Chinese textiles and clothing have declined sharply from about US$236 billion in 2014 to US$206 billion in 2016, according to the World Trade Organisation.

Chinese customs data showed exports of clothes and accessories fell by 0.4 per cent last year from 2016, while textiles exports saw annual growth of 4.5 per cent last year.

Meanwhile, labour costs in China have been rising steadily. The minimum wage in the southern boomtown of Shenzhen is now about US$336 per month – more than double the rate in some Southeast Asian countries.

Hit by the industry restructuring, some of the big clothing brands have struggled to make a profit and secure finance. Revenues have been sliding at Fuguiniao, a Hong Kong-listed menswear and shoe manufacturer based in Fujian province, since 2015. The company had a net loss of 10 million yuan (US$1.57 million) in the first half of last year, a bond default this year, and it has racked up debts of at least 3 billion yuan.

Although analysts say Chinese textile and clothing makers are at low risk from the looming trade war between China and the US, given that they export so little to America compared to other sectors, US brands are starting to diversify their sourcing.

A survey of 34 executives from leading US fashion companies last year found that, for the first time, fewer US brands were looking to China for products, even though the country remains the top sourcing destination for the industry worldwide.

“US fashion companies are not ‘putting all their eggs in one basket’, and the most common sourcing model is shifting from ‘China plus many’ to ‘China plus Vietnam plus many,'” according to the US Fashion Industry Association, which conducted the survey.

For many US brands, a third of their products now come from China, a third from Vietnam, and the rest is from other countries, the survey found.

But Sheng Lu, assistant professor of fashion and apparel studies at the University of Delaware, said “made in China” products were not losing their price competitiveness because of the overall supply chain efficiency.

“It is also important to recognise that China is playing an increasingly important role as a textile supplier for apparel exporting countries in Asia,” Sheng said.

According to Sheng’s research, Bangladesh’s textile imports from China, measured by value, rose from 39 per cent in 2005 to 47 per cent in 2015, and similar trends could be seen in Cambodia, Vietnam, Malaysia and other developing countries in Asia.

“A meaningful indicator to watch in the future is the value of “made in China” goods within other Asian countries’ clothing exports to the world,” he said.

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Coronavirus vaccine myths busted by experts

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Jane Lee MD winces as she gets a Covid-19 shot in Weymouth, Massachusetts.

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Vaccine skepticism and outright anti-vaccination sentiment has become rife in recent months, with more members of the public questioning not only the efficacy of vaccines, but their development practices, safety standards and their objectives.

The rapid development of coronavirus vaccines over the past year, an urgent task given the devastation to lives and livelihoods being caused by the global pandemic, has made them a prime target for hesitancy and myth.

But disinformation and misinformation that casts doubt over safety and efficacy can endanger lives.

The World Health Organization said vaccine hesitancy was among its top 10 global health threats in 2019. Vaccination, it said, “prevents 2-3 million deaths a year, and a further 1.5 million could be avoided if global coverage of vaccinations improved.”

When it comes to Covid-19 vaccines, experts and public health officials say it’s crucial to combat misinformation (false or inaccurate information) and the more nefarious disinformation (that is, false information intended to mislead people) being spread about the jabs currently being deployed. Here are some of the main myths that are circulating about coronavirus vaccines:

Myth: Covid-19 vaccines are unsafe because they were developed too fast

Fact: The coronavirus vaccines that are now being deployed have undergone strict and rigorous clinical trials involving thousands of human participants after initial animal trials.

Vaccine makers have insisted that no corners were cut and trial results have proved the vaccines are safe and effective. Before being authorized for use, trial data from the vaccines — such as those made by Pfizer-BioNTech, Moderna and the University of Oxford-AstraZeneca — have undergone strict scrutiny by regulators including the U.S. Food and Drug Administration, the European Medicines Agency and Britain’s Medicines and Healthcare products Regulatory Agency.

In late-stage clinical trials, both the Pfizer-BioNTech and Moderna vaccines were found to be 95% and 94.1% effective, respectively, at preventing severe Covid-19 infection. The vaccine developed by the University of Oxford and AstraZeneca was found to have an average efficacy of 70%. 

When the U.K. became the first country in the world to approve the Pfizer-BioNTech vaccine in early December, Dr. June Raine, chief executive of the U.K.’s MHRA, said no corners had been cut in its approval, saying experts had worked “round the clock, carefully, methodically poring over tables and analyses and graphs on every single piece of data.”  

The MHRA’s scientists and clinicians conducted a “rolling review” of the data as it was made available during clinical trials, hence allowing it to speed up its assessment of the vaccine and whether to authorize it. This was critical, the MHRA said, given the public health emergency.

Chinese health care workers and volunteers wear protective clothing as they register people to receive a Covid-19 vaccine jab at a mass vaccination center for Chaoyang District on January 15, 2021 in Beijing, China.

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Myth: Coronavirus vaccines alter DNA

Myth: Coronavirus vaccines affect fertility

Fact: Some women are concerned that the coronavirus vaccine could harm their fertility and there has been a mass of misinformation online regarding this. Indeed, on Tuesday, the U.K.’s Royal College of Obstetricians and Gynaecologists and the Royal College of Midwives issued a statement about Covid-19 vaccinations, fertility and pregnancy.

In it, Dr. Edward Morris, president at the Royal College of Obstetricians and Gynaecologists, said: “We want to reassure women that there is no evidence to suggest that Covid-19 vaccines will affect fertility. Claims of any effect of Covid-19 vaccination on fertility are speculative and not supported by any data.”

He continued: “There is​ ​no biologically plausible mechanism by which current vaccines would cause any impact on women’s fertility. Evidence has not been presented that women who have been vaccinated have gone on to have fertility problems.”

A woman receives the vaccination the Pfizer-BioNTech vaccine.

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Myth: The vaccine is unsafe for me because I’m pregnant

Fact: The truth is there is limited data about the safety of Covid-19 vaccines for people who are pregnant, the CDC states on its website.

Of the data available from animal studies, “no safety concerns were demonstrated in rats that received Moderna COVID-19 vaccine before or during pregnancy; studies of the Pfizer-BioNTech vaccine are ongoing,” the CDC said.

Studies in people who are pregnant are planned and both vaccine manufacturers are monitoring people in the clinical trials who became pregnant, it added.

In the U.K., where the AstraZeneca and Pfizer-BioNTech vaccines are currently being deployed, the government states that: “the vaccines have not yet been tested in pregnancy, so until more information is available, those who are pregnant should not routinely have this vaccine.”

Nonetheless, the government notes that evidence from non-clinical studies of both the Pfizer-BioNTech and University of Oxford-AstraZeneca vaccines have been reviewed by the WHO and regulators around the world, and have “raised no concerns” about safety in pregnancy.

The U.K.’s Joint Committee on Vaccination and Immunisation, which advises the government on its vaccination strategy, “has recognized that the potential benefits of vaccination are particularly important for some pregnant women,” including those at very high risk of catching the infection or those with clinical conditions that put them at high risk of suffering serious complications from Covid-19. In these cases, the government recommends that women discuss possible vaccination with their doctor.

Traders work on the floor of the New York Stock Exchange.

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Myth: If you’ve had the vaccine you don’t need to wear a mask

Fact: Even if you are immunized against Covid-19, it is possible that you could still pass the virus on to others. We still don’t know how vaccination against Covid-19 affects onward transmission and until we do — and while many people remain unvaccinated — people are being urged to follow social-distancing guidelines, wear masks and wash hands to prevent possibly passing the virus on.

Myth: I don’t need the vaccine because I’ve already had Covid-19

A Registered Nurse tends to a Covid-19 patient in the Intensive Care Unit at Providence St. Mary Medical Center in Apple Valley, California on January 11, 2021.

Ariana Drehsler | AFP | Getty Images

Myth: You can get Covid-19 from the vaccine

Fact: You can’t get Covid-19 from the Pfizer-BioNTech or Moderna coronavirus vaccines because they do not contain live virus. Meanwhile, the University of Oxford’s Vaccine Knowledge Project explains that the active ingredient of the Oxford-AstraZeneca vaccine “is made from a modified adenovirus which causes the common cold in chimpanzees. This virus has been modified so that it cannot cause an infection. It is used to deliver the genetic code for the coronavirus spike protein.”

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AI researchers rank the top AI labs worldwide

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Google Deepmind head Demis Hassabis speaks during a press conference ahead of the Google DeepMind Challenge Match in Seoul on March 8, 2016.

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LONDON — Artificial intelligence researchers don’t like it when you ask them to name the top AI labs in the world, possibly because it’s so hard to answer.

There are some obvious contenders. U.S. Big Tech — Google, Facebook, Amazon, Apple and Microsoft — have all set up dedicated AI labs over the last decade. There’s also DeepMind, which is owned by Google parent company Alphabet, and OpenAI, which counts Elon Musk as a founding investor.

“Wow, I hate this question,” Mark Riedl, associate professor at the Georgia Tech School of Interactive Computing, told CNBC when asked to pick his standouts.

“Reputationally, there is a good argument to say DeepMind, OpenAI, and FAIR (Facebook AI research]) are the top three,” Riedl said.

AI investor Nathan Benaich, a partner at Air Street Capital, agreed. Google Brain and Microsoft could potentially be included in the top ranks, Benaich said, before adding that he believed Amazon and IBM weren’t quite in the same league when it comes to AI research output and impact.

Another AI expert, who asked to remain anonymous because he didn’t have approval from his company to speak publicly, told CNBC that DeepMind, OpenAI and FAIR were probably the top three pure AI research labs in terms of known funding, while IBM pushes out more patents. “The unknown question is the Baidus and Tencents of the world,” he said in reference to the Chinese tech giants.

Alphabet gives DeepMind hundreds of millions of dollars a year to carry out its work, while Microsoft invested $1 billion in OpenAI on top of the $1 billion that the founding investors contributed. FAIR’s funding is less clear because Facebook doesn’t break it down.

A.I.’s potential

One way to measure the impact of an AI lab is to look at how many academic papers it publishes at the two biggest AI conferences: NeurIPS and ICML.

In 2020, Google had 178 papers accepted and published at NeurIPS, while Microsft had 95, DeepMind had 59, Facebook had 58 and IBM had 38. Amazon had less than 30.

For the same year at ICML, Google had 114 papers accepted and published, while DeepMind had 51, Microsoft had 49, Facebook had 34, IBM had 19, and Amazon had 18.

PR vs reality

AI has been hailed as a technology that has the potential to bring about a new industrial revolution and dramatically change the world we live in. But, for now at least, it remains relatively nascent and “narrow” in its abilities — an AI that can play chess to a superhuman level doesn’t know how to make an omelet, for example.

DeepMind, OpenAI, and FAIR are widely perceived as the top three labs partly due to “strong PR games,” Riedl said. 

He believes that Microsoft, which carries out much of its AI work through Microsoft Research, could legitimately be included in the top ranks. “For whatever reason they fly below the radar sometimes,” Riedl said. “Salesforce, Amazon, IBM all have some really strong pockets of research but, again, fail to make big splashes.”

Riedl said he’s “not sure that you couldn’t swap any group of researchers from any of these companies with any other and make any difference.”

Neil Lawrence, the former director of machine learning at Amazon Cambridge, told CNBC that Amazon doesn’t have a large, centralized AI research lab because it’s more focused on bringing technology to customers.

“I would argue they’ve done that very successfully,” said Lawrence, who is now a professor of machine learning at the University of Cambridge. “But if you look at (academic) publications as a measure then they don’t rank.”

Lawrence said that Microsoft Research is personally the research lab that he admires the most but “Amazon really ranks up there in deploying AI … despite not having a (big) research lab.”

He added: “DeepMind, OpenAI and FAIR have definitely dominated the headlines. But it’s interesting how much of the research they are publishing might traditionally have been done in universities.”   

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U.S. to remain a WHO member and join Covid vaccine plan

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Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases.

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The U.S. will remain a member of the World Health Organization under President Joe Biden, Dr. Anthony Fauci said on Thursday, and intends to join a global alliance that aims to deliver coronavirus vaccines to low-income countries.

Speaking from Washington by videoconference one day after Biden was sworn into office, U.S. Chief Medical Advisor Fauci told the WHO’s executive board: “President Biden will issue a directive later today which will include the intent of the United States to join COVAX and support the ACT-Accelerator to advance multilateral efforts for Covid-19 vaccine, therapeutic, and diagnostic distribution, equitable access, and research and development.”

The U.S. will also remain a member of the WHO, the United Nations health agency, and “fulfill its financial obligations,” Fauci said. It comes after former President Donald Trump announced in May that the U.S. would withdraw from the WHO, but the process wasn’t expected to be finalized until this July.

Fauci said the Biden administration planned to work with the other 193 member states to help reform the group.

“This is a good day for WHO and a good day for global health,” said WHO Director-General Dr. Tedros Adhanom Ghebreyesus.

“We are all glad that the United States of America is staying with the family,” Tedros said via Twitter.

WHO delegates “warmly welcomed” the decision, with many underlining their appreciation that the new administration would now seek to reengage with the international aid group amid the ongoing coronavirus pandemic.

Fauci, America’s top infectious disease expert, accepted Biden’s offer to join his administration and serve as chief medical advisor last month. He will lead a U.S. delegation at the WHO’s annual meetings throughout the week.

Trump vs. WHO

Trump had repeatedly criticized the WHO for being what he perceived to be too “China-centric,” and denounced the amount of funding the U.S. allocated to the health agency in comparison to other countries.

The U.S. was the largest single donor to the Geneva-based aid group in 2019. It reportedly contributed more than $400 million, accounting for roughly 15% of the WHO’s budget.

The WHO is funded by a combination of members’ fees based on wealth and population and voluntary contributions.

The WHO’s Tedros said in August that he hoped the U.S. would reconsider its decision to leave the organization. The problem was “not about the money,” he said, but rather about the lack of cooperation in the midst of the pandemic.

— CNBC’s Noah Higgins-Dunn contributed to this report.

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