Textiles recycling: China enters the fray

A new worry for long-standing traders concerned at the state of the global used clothing market is the establishment of a network of Chinese agents.

Whether you talk to used clothing traders in North America or Europe, the answers are the same. Their stories of the consequences of huge economic woes in the global export markets echo similar concerns.

The buying prices for second-hand textiles continue to drop substantially as demand for these items from the global north remain low in the traditional export markets, particularly Africa.

The increasing dominance of China as a global player in the market is at the heart of this with one business owner describing their influence in these markets as being at a ‘tipping point’. Chinese investments in these countries mean its economic interests continue to grow. This is regularly at the expense of Western influence.

Traditional ‘western’ operators are receiving reports that Chinese traders are increasingly bypassing the services of local importers by imposing their own network of Chinese agents on the ground. 

Currency weaknesses

What is more, these agents are taking advantage of the weakness of local currencies which have plummeted in value over the last year and are making Chinese Renminbi freely available on the open market. The Renminbi continues to remain strong compared to other global currencies.

Meanwhile, the US dollar’s availability is restricted at depressed exchange rates. China has a firm economic grip in these export markets.

Furthermore, labour costs continue to remain high in the west and warehouses are now full. The lack of space is getting to the point where some businesses are closing their doors to try to free up space.

Unless something is done soon, large scale permanent closures across the sector could be precipitated. This would seriously impede any chances of delivering a circular textiles economy. The same goes for the much-needed carbon benefits the textile reuse and recycling sector can bring if it reaches its full potential.

The calls for policy interventions by governments to support the industry are getting louder and louder. Even the USA, which normally favours less regulation and more free trade, is considering interventions at state and federal levels.

Policy wish list

What is needed is a wide range of support measures to see the sector through this difficult period. Examples of what industry leaders want immediate help with include:

• business rates and taxes
• fuel and energy costs
• insurance premiums
• wage costs (hampering the retention and recruitment of staff)
• EPR schemes for textiles to ensure producers of new garments pay for the collection, sorting and processing of the items they put on the market

Unless measures such as these are taken urgently, the implications for the industry could be hugely damaging.