Mr Gerard Gallagher (43), a team leader at the Unifi textile factory in Donegal, freely admits that his working prospects are looking bleak at the moment.
A 25-year veteran at the Letterkenny plant, which manufacturers yarn for export, Mr Gallagher will shortly pick up his final pay packet and join the growing ranks of unemployed textile workers in the county.
Unifi's decision to close its plant will add to almost 4,000 redundancies in the textile sector in Donegal since 1999, as firms such as Fruit of the Loom and Nena Models struggle to survive.
"I've spent my whole working life at this plant and will now have to go out and try and find a new job," says Mr Gallagher, who admits most people knew the writing was on the wall for Unifi.
Unifi's Irish operation survived the cut-throat competition offered by sweat-shop economies such as Bangladesh and Indonesia in the 1990s, but China's evolution as a manufacturing giant is now transforming the economics of the textile industry.
Drive around the outskirts of a big Chinese city and it is easy to spot tens of thousands of textile workers, who are each paid just a fraction of a typical Irish salary and work long hours on production lines making everything from silk lingerie to furniture.
Their output is phenomenal.
The China Daily reported this week that China's total sales revenue in the textile and clothing sector is forecast to reach 1.35 trillion yuan (€135 billion) in 2004, up about 30 per cent, and total profits are expected to reach 38 billion yuan, up about 5 per cent on last year.
So it did not surprise Unifi's 310 employees when production machinery at its Donegal plant started shipping to a new Unifi operation in China. For them the realities of the Irish Government's mantra on "competitiveness" is now sharply in focus.
Other big textile firms still in business here will face further pressure early next year when a strict quota system limiting China's textile exports is removed by the World Trade Organisation.
"We estimate one million jobs will be lost when the quota disappears," says Mr Neil Kearney, general secretary of the international textile, garment and leather worker's federation. "It will affect every part of the world including the US and Europe but it will be developing states such as Bangladesh that fare worst."
The federation cites China's clear advantages in wages, efficiency, good infrastructure and phenomenal levels of efficiency as the key reasons for its success.
It estimates China will account for 50 per cent of the world's garment trade when the quota ends.
And its not just within the textile industry that China is flexing its muscle. In a whole range of manufacturing sectors, Chinese suppliers are flooding markets with high quality, low cost goods.
Thousands of miles away from Letterkenny in the Chinese province of Sichaun - the home province of the Chinese reformer Deng Xiaoping - Intel recently announced its latest Chinese investment, a $375 million (€310.3 million) test and assembly plant in Chengdu.
The city, which has a population of more than eight million people, is a shining example of China's market reforms. Its city centre is a mass of construction and, symbolically, a massive statue of communist icon Mao Tse-Tung in the main square is gradually being crowded out by sparkling new shopping malls.
Intel's plant, which will start operating in 2005, will be its second Chinese plant, following its decision to set up a factory in the Waigaoqiao free trade zone in the Pudong area in Shanghai.
"One way the Chinese government has acted to encourage investment is to set up special export zones where raw material can be shipped in and assembled without incurring duties," says Mr Allen Lu, director of public affairs at Intel's Shanghai plant.
Foreign firms are also eligible for low corporate tax rates under state policies to encourage trade, making China a potentially lucrative location for certain types of investment. Pudong, with its skyline of futuristic skyscrapers, is now a magnet for foreign investment which hosts almost 100 Fortune 500 firms.
China's attractiveness is underlined by the $1.7 billion which US firms invested in the state in 2003, although this must be seen in the context of the $4.7 billion that US firms invested in Ireland.
But Mr George Hoguet, a China expert with investment managers State Street Global Capital, says China's rise will present a big challenge to manufacturing industries throughout the developed world. By 2010 China will be a bigger exporter than France or Germany and with wages at a tenth or fifth of levels in the US it will remain competitive, he says.
Irish firms in the computer assembly business are under stiff pressure from low cost manufacturers and many are outsourcing manufacturing to China, a move that is also costing Irish jobs.
But the shift of production to China has also created opportunities for European firms. One Cork-based company PCH International has tapped into the demand for Asian components and is now a major logistics firm with sites in Hong Kong, Taipei and mainland China. Similarly, the Irish furniture company Alfrank (see below) is now sourcing products in China for Irish firms.
The big Irish retailers are also diverting their gaze to China.
Arnotts first sourced Chinese products over a decade ago but in the past two years this trend has accelerated dramatically, says Mr Eddie Shanahan, its director of merchandising and marketing.
"The changes in China are not just price-related. For us quality, efficiency and the new technologies that China brings are just as important," he says. "Some of the product we get from China is better quality than from Europe."
As the "Made in China" tag has become popular in Europe, annual imports of Chinese goods to Ireland have boomed, more than doubling to €2.2 billion in the period between 2000-2003.
Significantly, Irish consumers are now paying far less for goods (18 per cent for TV and music equipment and 16 per cent for footwear) in sectors that have seen higher imports from China while prices have risen sharply in other protected industry sectors.
China's emergence as an economic power is not all bad news for Irish companies either, as the most entrepreneurial attempt to break into a domestic market with a population of 1.3 billion.
The biggest Irish investor in China is Glen Dimplex, the heating and appliance manufacturer, which has set up a factory in Shenyang city to make storage heaters for the local market.
And by the end of 2003 the Chinese Government had approved 61 investment projects by Irish companies worth $130 million. Firms such as Sigma Wireless, InfoCell and Iona Technologies have all enjoyed success selling into the Chinese marketplace.
One of the most successful, Iona has made 19 deals in China since opening an office in Beijing in 2001 and has now branched out to set up an R&D hub in the city.
"It takes time to be successful in this market," says Ms Nicole Bernard, head of Iona's Chinese operation. "You go through a trial period because Chinese customers want to be sure you are here to stay. Many people have come and gone in this market."
And success is far from guaranteed, says Mr Michael Garvey, Enterprise Ireland's Beijing director, who advises small- and medium-sized firms to be cautious when first setting up there.
"You've got to put a permanent presence in the market, start small with one salesman and try to increase investment as you win business," he says. "Many firms just visit China twice a year and then wonder why they failed to sign deals or win business."
Firms also need to direct their attention to a particular region rather than trying do do all of China, its just too big. Focusing on either Beijing, Shanghai or Guanghzhou is possible, he says.
Language and cultural barriers are serious obstacles that need to be overcome if firms are to be successful in China. One innovative way of breaking into the market is teaming up with some of the 40,000 Chinese students now studying in theRepublic.
Mr Brendan Waldron, founder of a Dublin and Shanghai-based firm New Tigers Consulting, teamed up with a Chinese graduate studying in Ireland who now acts as his China-based partner.
New Tigers provides a range of consultancy services to Irish and European companies aiming to set up businesses or source goods from China.
"We now have Belgian, French and Irish customers and a client list of more than 20 firms," says Mr Waldron, who notes a fast growing interest in China here.
And with tough competition from China here to stay for the long term, the success of Irish pioneers in east Asia could determine whether displaced workers at home are able to find new jobs.
