Daily Times

HANGZHOU/ZHENGZHOU: Quandian village has been in the wig business for over a century. It started out by trading needles, combs and forks for hair clippings, and peddling long, straight hair to German merchants. The village in Xuchang County, central China’s Henan Province, has been a beneficiary of globalization and is home to Rebecca Hair Products, China’s largest wig maker. “We have 11 wholly-owned companies in Africa, Britain, Brazil and Cambodia, covering a complete industry chain from R&D, manufacturing and marketing to exportation,” said Zheng Wenqing, general manager of Rebecca. The local residents were among the first in China to feel the benefits of globalization.

Yang Ge, 46, lived an itinerant life seeking jobs, before settling down as a worker for Rebecca in 1995. She is now a manager, lives a decent life and owns four houses. “Many local residents had their life changed thanks to the burgeoning wig industry,” Yang said. More than 95 percent of Rebecca’s workers are locally employed, while 95 percent of the company’s revenue of 200 million US dollars last year came from exports to the United States as well as Africa and Europe.

In Xuchang city, more than 50 hair companies, with annual exports of over 5 million US dollars, bring in a yearly income of one billion US dollars. Exports by local wig companies account for half the hair product exports in China, the world’s top hair product manufacturer and exporter. Globalization became a hot concept at the start of the 21st century, when Thomas Friedman, author of “The World Is Flat,” highlighted that globalization had broken geographical boundaries and created a flat global market. Open markets not only generated tremendous opportunities, but also led to a corporate “survival of the fittest,” a scenario true of China’s wig industry. Behind the good performance, Rebecca has seen its exports shrink in recent years, dropping by 25 percent in 2016.

Sluggish overseas market demand since the 2008 financial crisis and overcapacity led to a slump in profits for domestic wig producers, according to Wang Xixiang, executive secretary of the China Hair Products Association. “About one-third of hair companies have closed, while some bigger ones are filing for bankruptcy protection,” Wang told Xinhua. Zhang Baoming saw the underlying risks. He said that the wholesale price of hair strips surged from 10 yuan (1.45 USdollars) per kilo in 1993 to over 400 yuan a decade later. But last year, exports of his company fell 12 percent year on year.

The double-edged sword of globalization has made China the world’s factory, but also brought issues of poor quality, product homogeneity and increased competition. Lower levels of the supply chain are moving out of China as its demographic dividend is nearly over, while a decline in incomes and job opportunities has led to rising of populism and advocacy of de-globalization across the world.