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Garment exporters may opt for production base in ASEAN
Sep '11
Export-oriented Chinese garment companies may increasingly opt for ASEAN manufacturing to avoid trade barriers and more tightening tariffs.

In the first six months of the current year, apparel imports from ASEAN countries doubled to US$ 200 million. Of these, woven apparel imports doubled to US$ 0.90 million. Similarly, imports of knitted garments were worth US$ 0.70 million, up 83.6 percent year-on-year. This cooperation between Chinese garment enterprises and ASEAN nations is likely to increase further in the second half of 2011.

For about 30 years, China reaped rich dividends and is now experiencing the Lewis turning point, i.e. a transition from surplus labour to shortage of labour. A great number of apparel manufacturing companies are also experiencing this phase of transition from 'labour advantage' to 'talent advantage'.

In other words, in the midst of changing industrial environment in the country, the time for “Made-in-China” seems to be over as the country is no more able to produce goods at low cost as it was able to earlier.

The domestic and global economic environment has changed in 2011 and Chinese garment sector is facing new challenges due to volatility in the price of raw material, a dip in the US debt rating, tightening of domestic monetary policy, and the increasing labour, rent, logistics and energy costs.

Moreover, export-oriented garment producing enterprises are facing stiff competition from other countries which are lowering tariff and trade barriers and implementing policies that support their local textile and garment industries.

Fibre2fashion News Desk - China

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