On Jan. 1, more than half of U.S. textile and apparel goods will be stripped of import protection.

On Jan. 1, more than half of U.S. textile and apparel goods will be stripped of import protection.
KNIGHT RIDDER NEWSPAPERS
SHENGZE, China -- This eastern China town commemorated its economic roots in 1840 by building an ornate temple to textiles.
The worship appears to have paid off.
Local officials boast that the number of mills has tripled to 1,500 in five years, including the mile-long Hengli mill opened in February. Rainbows of fabric are everywhere, in trucks bound for customers and in the shops of one of the country's largest wholesale fabric markets.
Behold, the mill town of the 21st century.
Echoes abound of a Carolinas heritage, a time when textiles were king, when mill bosses ruled and workers lived in tiny mill houses. But in harsh contrast to Carolinas towns hurt by textile's demise, this is a mill town on the rise.
This is the threat the ailing U.S. textile industry has long feared would be its death knell, and it is about to be freed of decades-old import limits called quotas.
"Every year we have new factories, and every factory is developing," Qian Yunxin, vice secretary of Shengze's Communist Party branch, said during an interview in town. "The international textile industry is changing its center."
Grand finale
Textiles' long decline is a well-known story in the industry's Carolinas heartland. The most devastating chapter begins Jan. 1.
That's the grand finale of a 10-year phaseout of quotas on textiles and apparel. For more than 40 years, quotas have protected U.S. mills by restricting imports from mostly poor nations. On New Year's Day, more than half of U.S. textile and apparel goods -- 98 broad categories, including jeans, sheets and cotton diapers -- are stripped of import protection. The fall of those trade barriers unshackles the textile force of the world's most populous country and 39 others.
For U.S. shoppers, that should mean clothing gets even cheaper. For U.S. mill workers, that means more jobs lost to Shengze and China's other textile enclaves.
Freed of quotas, apparel production is expected to consolidate in a few low-wage countries. China is expected to be the biggest winner.
"It could mean the quick loss of most of what we've got left," said Jim Schollaert, who was trade counsel to former U.S. Sen. Jesse Helms and now lobbies for a Washington textile group fighting to curtail imports.
Last year, China accounted for nearly 12 percent of the United States' $61 billion of apparel imports, federal figures show. That could explode to 50 percent after quotas end, according to a report this year by the World Trade Organization. India is expected to be a distant second at 15 percent.
A U.S. industry trade group estimates that eliminating quotas on China will, within two years, wipe out two-thirds of U.S. textile and apparel jobs.
The country stands to lose more than 650,000 jobs, including two-thirds of related jobs such as cotton farming and making textile chemicals, according to the National Council of Textile Organizations in Washington.
North Carolina, with the most textile workers, is one of the most vulnerable. The state had 102,100 mill and apparel workers as of October. South Carolina textiles and apparel employ about half as many.
NCTO's job-loss estimate means 103,000 North Carolina and South Carolina textile and apparel workers out of jobs, the equivalent of 21 Pillowtex closings. The sheet-and-towel giant's 2003 shutdown triggered the largest layoff in North Carolina's history.
"We're really coming up on a fork in the road," said NCTO President Cass Johnson. "One is whether there will be a textile-apparel sector in the United States, or whether China will become the world's supplier of these products."
U.S. trade officials are considering last-ditch industry efforts to cap imports from China of such major items as blouses and jeans. Last month, they limited imports of Chinese socks. Last year, they restricted imports of Chinese bras, dressing gowns and knit fabrics, which surged after quotas ended in 2002.
Rebirth of capitalism
Shengze's textile temple is said to be China's only remaining shrine to the industry. Each year, on May 21, locals gather to honor the birth of Empress Leizu, credited in legend with discovering silk for China 5,000 years ago. Silk is the lustrous fabric of China's ancient textile glory. Today, China's mills churn out fiber, yarn and fabric for everything from clothes to luggage. Textile and apparel companies employ 18 million people, up from 10 million just five years ago, according to the Chinese Chamber of Commerce for Import & amp; Export of Textiles.
The industry's densest cluster radiates from Shanghai. Shengze, in Jiangsu province, is part of that textile ring, a town that mills built.
Textiles account for 90 percent of Shengze's tax revenue. Nearly one-third of the town's 250,000 people work in mills. An additional 10,000 work in the fabric-trading market. Still more work in textile support industries, such as warehousing and repair.
Like much of China's East Coast, construction also is big business in Shengze. But rather than glittering office and hotel towers, in this town -- small by Chinese standards -- they mostly build textile mills. The sprawling factories stretch back from gated entrances along broad, smooth streets. Across the way from some are farmers, building on to their houses with money they got for the loss of land to mills.
Shengze's downtown is dense with small, crowded shops. Officials point proudly to the KFC restaurant, an emblem of the economic reform begun in 1978.
China's transformation into a growing world economic power has seen the closure of inefficient state-owned plants and the rise of private ownership.
"Shengze is a birthplace of the rebirth of capitalism because of its long tradition of private enterprise," said Shen Yingbao, vice director of Shengze's economic-development group.
Shengze touts proximity to Shanghai's mega-port and workers who know and like textiles.
"Every day, people here are talking about textiles," said Vice-secretary Qian.
And they're talking about the end of quotas.
"We have been preparing for the removal of quotas for two years," said Wu Rongwang, owner of a Shengze fabric trader, Huahui Textile Co. "After the quota is removed, there will be more demand."
Wu has a fabric plant outside Shengze and is adding fabric dyeing. He wants to start making clothes, too. He anticipates more U.S. and European orders. Europe, now his dominant customer, also is lifting quotas.
Qian said he'd like to attract U.S. investment and orders, often handled now through trade-savvy Hong Kong and Taiwan outfits.
Today, S.C. packaging giant Sonoco Products is about the only U.S. manufacturing presence in town. Sonoco is building a plant in Shengze to make paperboard tubes that hold fiber. That will be the Hartsville company's fourth Chinese plant.
"Now, it is relatively difficult to do business with the United States," Qian said, sitting in a conference room ringed with plush sofas and armchairs. "We do not know each other very well."
Company life
In Shengze, a smokestack towers above Hengli's booming fiber mill, a reminder of similarities between China's textile industry and Carolinas mill towns.
Carolinas mill workers often lived in tiny, company-owned houses, clustered near the plant. Chinese mill workers often live in multistory company dorms.
For decades, Carolinas mill workers attended mill picnics, swam in mill pools, worshipped in churches built with mill money. In China, mill workers sing karaoke in company lounges, eat in company cafeterias and shoot hoops on company courts.
Chinese mill barons have every bit the stature of such Carolinas patriarchs as Parkdale's Duke Kimbrell, Cannon Mills' Charles Cannon and Springs Industries' Col. Elliott White Springs.
And Chinese mills depend on people coming from poor farm villages, desperate for jobs, repeating a migration that powered early Carolinas mills.
Chen Chenggang, 20, joined Hengli in March. He left home, a seven-hour train trip north, because his parents' plots of peanuts, corn and wheat couldn't support the family of four.
About half Shengze's population has moved from poor farm villages to work in the mills, Qian said. One big reason China, and many developing nations, are such a threat to wealthier countries is that the sheer number of people seeking jobs ensures a deep pool of low-cost labor.
Like early Carolinas mill workers, Chen sends home part of his salary. He makes about $165 a month, a little above the area's top average, but less than 8 percent of the average U.S. textile wage.
Chen is homesick, but can't afford time away from work to visit. The 21st-century advantage is that he can call his girlfriend every few days on a mobile phone.
"It's a good training experience to be in this factory," he said.
Every day, shortly after noon, hundreds of young workers clad in mint-green uniforms exit the Hengli plant, ending their eight-hour shift. Chen is one of about 1,800 Hengli workers who live for free in company dorms.
Eight workers share each narrow room with four bunk beds, unthinkable by American standards. But Hengli rooms have air-conditioning and private baths with hot showers, amenities many didn't have at home, comforts lacking even in some Shanghai apartments. Cleaning crews come daily.
Office workers have larger apartments with fewer people.
Xu Jianhui, 27, joined Hengli two years ago, quickly becoming a team leader. He lives at home with his family and rides a motorcycle to work.
"The factory is developing fast," he said. "There will be opportunity."
The mill baron
In Shengze, Chen Jianhua is the No. 1 mill baron.
Chen, 33 and father of two, is president and owner of Hengli, the biggest mill in town. Approaching town, an overhead sign offers a welcome to Hengli.
In 1994, he opened a plant weaving apparel fabric, which now has more than 4,000 workers. In February, he added a mill that makes polyester fiber and has 3,000 workers.
"I grew up with the textiles, so when I grew to be somebody, I think I must do something with textiles," Chen said during an interview at his office on Sunday -- a normal work day for him.
Heavyset and quick to laugh, he insisted on breaking for lunch at noon. Like government officials and others with money, Chen favors a restaurant named "All Because of Silk."
Many diners were in groups of about 10, in private dining rooms common in Chinese restaurants. Chen spent the two-hour lunch moving between rooms, talking business with other executives and with local and state officials.
The combination of modern machinery and comparatively minuscule paychecks makes Hengli and similar mills formidable competitors for Carolinas mills, which also spent heavily to modernize.
"The removal of quota will have a negative impact on textile factories in the United States and the European Union," Chen said.
Worshippers at Shengze's textile temple could have even more to be thankful for next year.