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Coming to America: Chinese Textile Companies Set Up Shop on US Shores

Once left for dead, the U.S. textile industry is being revived by the very nation that nabbed most of America’s business two decades ago.

The New York Times reported Sunday that North and South Carolina are now home to at least 20 Chinese manufacturers, reversing the trend as textile production on their home turf becomes increasingly insolvent after years of increasing labor costs, energy expenses and logistical bills, not to mention new cotton import quotas.

“In China, the whole yarn manufacturing industry is losing money,” Ni Meijuan of Chinese textile company Keer Group told the Times. “In America, it’s very different.”

Keer, for instance, is investing $65 million to double the capacity of its 230,000-square-foot yarn-spinning facility in Lancaster County, South Carolina, which started shipping cotton yarn in February. Elsewhere, recycled polyester products manufacturer JN Fibers Inc. has invested $669 million in South Carolina since 2000.

They’re not the only ones: A report published in May by New York research firm Rhodium Group pointed out that between 2000 and 2014, Chinese companies invested $46 billion on new projects and acquisitions in the U.S., the vast majority of that financing taking place in the last five years.

“I never thought the Chinese would be the ones bringing textile jobs back,” said Keith Tunnell, president of the Lancaster County Economic Development Corporation, which helped lure Keer to the area in late 2013 with lower cotton prices, proximity to the Port of Charleston and about $20 million in subsidies.

Labor, meanwhile, is not as big of an issue as far as total cost as it once was. Boston Consulting Group estimated that for every $1 required to manufacture in the U.S., it costs 96 cents in China, where yarn production costs are now 30 percent higher than they are stateside, according to the International Textile Manufacturers Federation.

As Harold Sirkin, a senior partner at Boston Consulting, told the Times, “Everybody believed that China would always be cheaper. But things are changing even faster than anyone imagined.”