It's a sombre gathering in the backstreets of one of China's biggest manufacturing hubs, where workers are smoking under a tree in front of storefronts advertising temporary factory jobs. 'No-one understands what our life is like,' says one man who is unwilling to be named. 'We work and work and have no life. Please help us,' another adds - a rare, risky plea to a foreign journalist. They seem desperate, struggling to earn enough to send money home, as they cope with the massive shifts in Chinese manufacturing, from cheap, mass-produced goods to automated advanced tech. And that was even before the US-Israel war with Iran shook the global economy.
China's economy was already battling slower growth and unemployment when Donald Trump's tariffs hit last year. Still, it proved resilient, boosting exports and reporting GDP growth of around 5%. But the discontent continued to simmer. And now the Middle East conflict is starting to take a fresh toll, putting pressure on factory orders, costs and jobs.
In Foshan, in the southern industrial province of Guangdong, the workers' best opportunity is plastered in bright red lettering in front of them: a few weeks of moulding plastic, or screwing together parts of a mobile phone, for 18 to 20 yuan an hour, which amounts to just a few dollars or pounds. 'I'm going to try and find work elsewhere,' says another worker from a rural province. Most are well over 40 years old, and frustrated at yet more uncertainty. This is one of the reasons Beijing is calling for the war to end.
China's enviable oil reserves and the lead it has taken in renewables and electric cars have insulated it from the worst effects of the fuel crisis. But even as it puts on a show of steady strength, the war is choking the Strait of Hormuz, a crucial shipping route, and that is causing more pain to a sluggish Chinese economy that is heavily relying on exports.
'Costs have gone up around 20%,' says a trader who didn't want to be named, as she organizes workers to move cylinders of fabric from the back of a truck to a line of carts, which will take them to local factories to be cut and sewn into clothes for the world's retailers, from Zara to Shein to Temu. This is the world's largest fabric market – in Guangzhou, an hour's drive from Foshan - and the streets pulse with motorbikes laden with rolls of vibrant textiles. Their trade needs a cheap and steady supply of oil in the form of petrochemicals, without which they cannot produce fabric. And higher oil prices are now hitting them hard. 'It means fewer orders,' says one trader over tea in a back room office. He adds that some customers are refusing to pay more and rolls of fabric are piling up in the warehouse.
If they don't pass the rising cost on to the customer, they absorb it themselves. That is hard for those who're already working with slim margins. A year ago, when the US and China were locked in a trade war, there was defiance on the streets of Guangzhou. This time, there is resignation.
But there is still opportunity amid the uncertainty. A short drive away, manufacturers are welcoming buyers from around the world in the cavernous halls of the Canton Fair. Humanoid robots wave and sing as international visitors take selfies. This is the China that leaders in Beijing want the world to see. A country looking towards the future and building new technology while its rival, the United States, is embroiled in a war in the Middle East.
Chinese manufacturers exported 350,000 EVs in March alone, a 30% increase from February, and a 140% increase from March last year. EVs are also one of China's biggest exports to the Middle East, but now trader Joyce Liu is finding it tough to get shipments to customers. 'Last year 90% of our cars went to the Middle East but this year because of the war we almost stopped doing business with them,' she says. 'Some of the cars are still waiting at Chinese ports.'
That is also what Beijing wants. While the war will strengthen Beijing's ongoing push towards self-reliance, China is not really winning in this scenario. 'Ironically, a declining US is something that China hoped to see. But is this the America that China wanted? It would prefer a US that is more predictable, and that is perhaps easier for Beijing to manage.' From the sidelines China is calling for a ceasefire while pushing its friend Iran towards the negotiating table. This is China flexing its diplomatic muscle, a reminder that China is no longer just at the centre of the global economy, but increasingly at the centre of global power.
China's economy was already battling slower growth and unemployment when Donald Trump's tariffs hit last year. Still, it proved resilient, boosting exports and reporting GDP growth of around 5%. But the discontent continued to simmer. And now the Middle East conflict is starting to take a fresh toll, putting pressure on factory orders, costs and jobs.
In Foshan, in the southern industrial province of Guangdong, the workers' best opportunity is plastered in bright red lettering in front of them: a few weeks of moulding plastic, or screwing together parts of a mobile phone, for 18 to 20 yuan an hour, which amounts to just a few dollars or pounds. 'I'm going to try and find work elsewhere,' says another worker from a rural province. Most are well over 40 years old, and frustrated at yet more uncertainty. This is one of the reasons Beijing is calling for the war to end.
China's enviable oil reserves and the lead it has taken in renewables and electric cars have insulated it from the worst effects of the fuel crisis. But even as it puts on a show of steady strength, the war is choking the Strait of Hormuz, a crucial shipping route, and that is causing more pain to a sluggish Chinese economy that is heavily relying on exports.
'Costs have gone up around 20%,' says a trader who didn't want to be named, as she organizes workers to move cylinders of fabric from the back of a truck to a line of carts, which will take them to local factories to be cut and sewn into clothes for the world's retailers, from Zara to Shein to Temu. This is the world's largest fabric market – in Guangzhou, an hour's drive from Foshan - and the streets pulse with motorbikes laden with rolls of vibrant textiles. Their trade needs a cheap and steady supply of oil in the form of petrochemicals, without which they cannot produce fabric. And higher oil prices are now hitting them hard. 'It means fewer orders,' says one trader over tea in a back room office. He adds that some customers are refusing to pay more and rolls of fabric are piling up in the warehouse.
If they don't pass the rising cost on to the customer, they absorb it themselves. That is hard for those who're already working with slim margins. A year ago, when the US and China were locked in a trade war, there was defiance on the streets of Guangzhou. This time, there is resignation.
But there is still opportunity amid the uncertainty. A short drive away, manufacturers are welcoming buyers from around the world in the cavernous halls of the Canton Fair. Humanoid robots wave and sing as international visitors take selfies. This is the China that leaders in Beijing want the world to see. A country looking towards the future and building new technology while its rival, the United States, is embroiled in a war in the Middle East.
Chinese manufacturers exported 350,000 EVs in March alone, a 30% increase from February, and a 140% increase from March last year. EVs are also one of China's biggest exports to the Middle East, but now trader Joyce Liu is finding it tough to get shipments to customers. 'Last year 90% of our cars went to the Middle East but this year because of the war we almost stopped doing business with them,' she says. 'Some of the cars are still waiting at Chinese ports.'
That is also what Beijing wants. While the war will strengthen Beijing's ongoing push towards self-reliance, China is not really winning in this scenario. 'Ironically, a declining US is something that China hoped to see. But is this the America that China wanted? It would prefer a US that is more predictable, and that is perhaps easier for Beijing to manage.' From the sidelines China is calling for a ceasefire while pushing its friend Iran towards the negotiating table. This is China flexing its diplomatic muscle, a reminder that China is no longer just at the centre of the global economy, but increasingly at the centre of global power.
