Smugglers' haven turns to trade in used clothes

There is little to indicate the storm that has swept through Jieshi's No1 industry in recent weeks - an anti-smuggling campaign. Only one side street, where dozens of shops have been barricaded shut, hints at the persistence of the police raids.

The kilometre-long lane was until recently described by local people as a used-clothes market but, following the raids, many traders have taken their business off the side streets and into houses and offices in the surrounding maze of alleys. No outsiders can find them; only well-connected motorcycle-taxi drivers know where the clothes are being sold.

'You said you were from Guangzhou, right? Can I see your ID?' Chen, a Jieshi native, asked suspiciously in the living room of his three-storey house. Inside, used clothes were piled up to the ceiling.

Chen, a father of three, said that since being exposed by China Central Television late last month, Jieshi's traders had to be wary of strangers, fearing they might be reporters or plain-clothes police officers from northern provinces. After agreeing to a deal on products and price, Chen rode his motorbike to his secret storehouse and returned 20 minutes later with 10 used suit jackets of different brands, styles and colours, priced at 15 yuan (HK$17) each.

'Please forgive him: if you came a month ago, or in a few months' time when there are no campaigns, nobody would be so impolite,' a motorcycle driver named Wang said.

Everybody involved in the business was lying low, he said.

Another trader, a bald man in his 40s with a big gold ring on his finger, said he had no used clothing left.

'No, no, no. I don't have such things anymore,' he said.

The clothing distributed in Jieshi comes from Japan, South Korea, Europe and the US. Many are brand names, and they feed a thriving market of brand-hungry consumers who cannot afford luxury prices.

The Jieshi traders are working in a legal grey area. Used clothing is not illegal to sell per se, unlike more notorious smuggled items such as narcotics and firearms. Nor are customs authorities missing out on lucrative excise duties as in for big-ticket smuggled items like luxury cars, precious metals and cigarettes. But it is illegal to import second-hand clothes as, under environmental regulations, such items are labelled waste.

However, once an item of used clothing enters the market, it is almost impossible to trace its source.

According to a Jieshi native familiar with the smuggling industry, roughly 25 per cent of the town's workforce is involved in the import, transport, cleaning and distribution of used clothes.

The man, who gave his name only as Lin, said used clothes were packed into sacks weighing 50-75kg, and each sack cost several hundred yuan.

Many of the clothes had been earmarked for donation in their original countries or had been thrown away.

The leaders of the operation are not based in Jieshi - mainland media reports suggested some were Jieshi natives based in Hong Kong - but they control the town's underground sales network.

'Jieshi is the distribution centre for this type of smuggling. It's been famous for this for years,' Lin said.

According to Lin, many of the clothes do not reach Jieshi through its port, but rather by road from Vietnam. Last week, CCTV reported that a driver had been stopped on the Shenzhen-Shantou highway with a truck full of used clothes.

The driver said the van had been loaded in Dongxing , a town in Guangxi that borders Vietnam.

For the traders in Jieshi, the used clothing can be a lucrative business - with a little luck.

'Do not be surprised if you find Chanel, Yves Saint Laurent or some other world-famous brands in the sacks,' Lin said. 'I used to have a pair of woollen trousers my uncle said would cost 2,000 yuan [HK$2,270] in a mainland department store.'

Once clothing reaches Jieshi, traders go through the sacks to look for valuable items. These are sold on to distributors from other provinces for anything from 10 yuan to 300 yuan an item. Lin said many distributors were from Shanghai and Zhejiang , who claimed they could sell the goods on at a tenfold profit.

Bargain-hunting mainland consumers can choose between second-hand clothing and knock-offs to slake their thirst for YSL and the like.

There is a price to pay for such bargains, of course - fake clothing is often poorly made, while there is concern over the source of used clothing.

In downtown Guangzhou, behind the famous Garden Hotel, a small shop 'specialising in imported clothes' sells Levi's jeans for 50 yuan a pair. Such stores are dotted all around Guangzhou and every other mainland city.

Ivy Li, a white-collar worker who visits Guangzhou's second-hand shops regularly, said customers had to be careful about the clothing since some items may be more than just 'used' - for example, they may have been taken from dead people.

Lin, the Jieshi native, said nobody in the town had become ill from handling the clothing.

While many people knew what they were doing was against the rules, they had no other options, he said. 'There is no investment and no factories. If you do not leave and work elsewhere, used clothes is the easiest way of making money.'

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