![]() Vietnam’s clothing industry still relies mostly on Chinese materials such as buttons, thread, labels and packaging with only about 30% to 40% of the materials made locally, according to Duong Thi Ngoc Dung, the vice chairwoman of Vietnam’s Textile & Apparel Association. Indeed, so integral is China to the global apparel supply chain that even shifting countries doesn’t really reduce reliance that much. “I’m afraid the business slowdown will continue over the next year or two.” Output rates at his Chinese factories are meanwhile about 20% better, plus the workers are more skilled.Įxpanding production in Southeast Asia isn’t a “rational decision,” Kee said. The amount he pays his workers in the southern Chinese manufacturing city of Zhongshan is now just 30% more than in Cambodia, a gap that was much wider 10 years ago. Over the past decade, however, he saw increasingly thinner profit margins as minimum wages crept up. Kee, the manager of a Guangdong-based apparel factory who asked only to be identified by his first name discussing issues that may be politically sensitive, has a similar story.įor more than 20 years, he operated production lines in Cambodia that made jeans. Several of those countries have over the years seen their exports to developed nations grow at the expense of Asia’s biggest economy. That retreat risks undoing some of the $1.8 billion that’s been spent, according to the China National Textile & Apparel Council, by manufacturers in China on turning to their Asian neighbors like Vietnam and Thailand. ![]() “With weak demand, low labor costs and tariff exemptions are meaningless.” “There’s no point talking about expansion or overseas shifts now,” Lin said. Last year, he exited Vietnam and shifted his focus back to Guangzhou. In 2020, as Covid closed borders, he started a new production line for ladies dresses in Hanoi to “test the waters,” heartened by workers who were happy with less than half the monthly wages he was paying in Guangzhou.īut he soon found himself shocked by how few orders came in from wary overseas customers. His plants make clothes primarily for US and European clients. Lin Feng, in his 50s, is a businessman who owns apparel factories in and around China’s southern city of Guangzhou. “I can’t think of another place that can do the quality, the quantity and the price as well as China.”Īpparel makers and factory owners that Bloomberg News spoke to echo Magill’s sentiments. “That mature ecosystem, established over decades in China, not only ensures competitive price points, but also delivers stable quality at mass production that’s hard to copy,” Laura Magill, the global head of sustainability at footwear brand Bata Group, said. Some are even upping stumps and moving back to the mainland. (Bloomberg) - From Adidas AG to Nike Inc., apparel and footwear makers have been shifting their supply chains out of China, pushed by geopolitical tensions and pulled by lower manufacturing costs.īut amid mounting global economic uncertainties and weakening consumer demand, many are discovering that finding alternative production hubs comes with its own challenges.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |