Bolivia's Textile Trade a Globalization Casualty Matilde Flores haggles with customers about the smartly tailored jackets she's selling at her street stand in central La Paz on a chilly morning. "The fabric is Chinese but they're stitched together domestically," she tells one shopper, but the customer is clearly more interested in the price than the origin. Flores is facing up to Bolivia's new reality: clothes either wholly produced in China or sewn together locally with Chinese material are increasingly cheaper than anything produced in Bolivia with the country's raw materials. Same for shoes. "Chinese and now the Peruvian shoes are taking over and they aren't even leather," Genaro Torrez said as he hammered a sole flat for a pair of fine leather shoes in his workshop. The Chinese shoe is 70 percent cheaper, the Peruvian 40 percent cheaper than domestic. Although rich in raw material and skilled craftspeople, this poor, landlocked South American nation of 10 million can barely compete globally in anything that isn't dug out of the earth or grown in a field. "He who doesn't advance in globalization retreats and Bolivia has been fully globalized and, rather than benefiting, is suffering the consequences," said Gary Rodriguez, director of the Bolivian Institute of Foreign Trade. In this April 4, 2012 photo, a woman embroiders a Chola wrap in her clothing store that uses Chinese made fabric in La Paz, Bolivia. Bolivian manufacturing has been slammed by cheap foreign goods, mostly from China, who's advantage is that its manufacturing sector is highly mechanized and colossal in scale, its labor cheap, its job protections weak and its currency undervalued against the dollar. By contrast, Bolivian production is of much smaller scale, often artisanal, and strict labor laws make it difficult to fire workers. (AP Photo/Juan Karita) Close "The day we least expect it the domestic markets for our pasta and beer will also disappear," said Alberto Bonadona, an economist and newspaper columnist. Domestic manufacturing has been slammed by a double whammy of cheap foreign goods, mostly from China, and a nearly unfettered flood of contraband that further cripples the ability of Bolivian products to compete. "Our raw material is good but production costs are high because we work by hand," said Torrez. That's a big problem when China can undercut even Bolivia's labor costs. China's advantage is that its manufacturing sector is highly mechanized and colossal in scale, its labor cheap, its job protections weak and its currency undervalued against the dollar, he said. Bolivian production, by contrast, is of much smaller scale, often artisanal, and strict labor laws make it difficult to fire workers. Frequent political unrest, including road blockades, also hurt competitiveness by raising costs. Bolivia's trade deficit keeps widening, particularly with China. Last year, Bolivia bought $937 million in goods from China and sold $330 million. Chinese textile imports, worth $8.7 millon in 2010, nearly doubled to $17 millon last year, according to the National Institute of Statistics. From China, Bolivia buys everything from motorcycles to televisions to herbicides. To China, it sells minerals and lumber. China overtook the United States last year to become the chief provider of goods sold in Bolivia. It dominates both legal imports and the contraband readily available everywhere. Everything here is Chinese: The toys, the computer, the cell phone, the pen, even school pencils, down to clothes and shoes. They are preferred for their price," Rodriguez said. In the 1960s, Bolivia sold steel to the United States, which then exported cars back to the South American country. The shoemaker Torrez complains that it Bolivia today exports nonrenewable resources to China and gets back something lesser: goods made of synthetic material.