The province, long known for coal and steel, has become a symbol of industrial oversaturation. Rows of nearly identical storefronts line the roads of Suning County, each one a small garment factory offering the same T-shirts and sweatshirts at prices that keep falling. One manufacturer, Zhang Cuihua, produces a million shirts a year but still loses money. Her margins have dropped by more than 60 percent in recent years. Yet customers demand even lower prices.
“This involution is unbearable,” she says. “People are driving themselves to death.”
Zhang is not alone. Across Hebei, factories are closing, but the closures do little to ease the pressure. Others remain open, selling at a loss simply to keep cash flowing. Down the road from the garment district, a stretch of fishing-rod workshops tells the same story: falling demand, falling prices, and falling profits. Rods that once sold for $12 now go for $9. Profit per unit has been sliced from $4 to $1.50.
Why do these factories keep going? Because local governments encourage them to. In Hebei, loans are easier to secure than in many parts of the country. That credit fuels continued production, regardless of profitability. And in a business culture that values persistence, retreat is often viewed as failure.
E-commerce only sharpens the blade. As platforms push prices lower to attract consumers, factory owners are forced to match or lose the order. Compounding the problem, government investment zones—built to stimulate growth—now sit half-finished and half-abandoned. A “knitting technology” park next to the garment zone was supposed to open in May. In June, it looked deserted.
What was once framed as healthy internal competition is now recognized as a structural flaw. Factories are not innovating—they are underbidding each other into the ground. Supply exceeds demand, and demand itself is shrinking. Consumers, unsure about housing prices or job security, are unwilling to spend. Yet the factories keep building, keep producing, keep slashing.
China’s national policy response may offer a temporary reprieve. Crackdowns on “irrational competition,” as announced by the State Council, suggest that the government sees the risk. But Hebei’s empty storefronts and shuttered restaurants tell a deeper story: one of exhausted entrepreneurs and a system that rewards output over outcome.
For many of China’s factories, the goal is no longer profit. It is simply to endure.