‘Made in China’ textiles may be made in North Korea

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Clothes that are labeled “made in China” may actually be made in North Korea, traders have revealed.

Chinese firms are reportedly using North Korean factories to make textile products for cheaper labor costs. The items are made by North Korean employees and are being distributed all over the world.

United Nations sanctions

The clothes are made in North Korea legally, as the tightening sanctions—due to the country’s nuclear programs—imposed by the United Nations do not ban textile exports. Here, the labor costs are cheaper than those that are made in China.

The UN Security Council has been giving sanctions to the country since it did its first nuclear test in 2006. Many products and services have been banned, but textiles are not one of them.

According to a businessman from the Chinese border city of Dandong, they take orders from all over the world—suppliers from China sends the raw manufacturing materials such as fabric to North Korean factories.

Speaking in anonymity, the businessman told Reuters: “We will ask the Chinese suppliers who work with us if they plan on being open with their client — sometimes the final buyer won’t realise their clothes are being made in North Korea. It’s extremely sensitive.”

Cheaper and faster

The Reuters report cites the Korea Trade-Investment Promotion Agency (KOTRA) as saying that in 2016, textiles were the second biggest export in the – country after other minerals—a whopping total of $752 million

Chinese manufacturers save as much as 75 percent if they have the clothes made in North Korea. A Korean-Chinese businessman revealed that workers in North Korea can produce 30% more clothes than a Chinese worker in one day.

According to The Independent, workers in North Korea (where all factories are state-owned) are reportedly being paid around $75 and $160 per month, while China’s factory workers earn somewhere between $450 and $750.

“They aren’t like Chinese factory workers who just work for the money. North Koreans have a different attitude — they believe they are working for their country, for their leader,” said the businessman.

Outsourcing issues

It is possible that some companies don’t know that their products are being made in North Korea.

Last year, Australian clothing brand Rip Curl released a public apology saying that a supplier diverted a part of their production to an unauthorized subcontractor in an unauthorized company without their consent.

“We were made aware of this some months ago and took immediate steps to investigate and rectify the situation. All of our suppliers know that our terms of trade prevent them diverting production to non-certified factories and we do undertake factory inspections and audits to try to prevent this happening,” said the company in a statement. “In this case we took immediate action to discipline the supplier for his breach and we are increasing our inspections and audits.”

However, Michelle O’Neil of the national secretary of the Textile, Clothing and Footwear Union of Australia (TCFUA) said that incorrect labelling is not a new practice.

“The way it’s described in the industry is it’s China plus one, companies that have some of the work made in China and some of it made in North Korea,” she told The Guardian in a 2016 report. “To suggest that it was unauthorised or they were unaware that it was happening in their supply chain in 2016 is unacceptable.”

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