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SE Asian countries seize low-cost tag from China
May '12
The low-cost advantage which the Chinese textile and apparel industry used to have since the last three decades has now been seized by other countries in Southeast Asia.

Vietnam, Cambodia, Bangladesh and other countries in the region are emerging as a competitive threat to Chinese garment exports.

In the clothing pavilion of the 111th Canton Fair, a top official of Zhejiang Eagle Group - He Xiao Kan had said, “Chinese wage costs have touched 3,000 Yuan per month against just 500 Yuan per month paid to workers in Cambodia and Vietnam”.

“This huge difference means clothing products rolled out by enterprises in these countries can be sold at one-third the price quoted by their Chinese counterparts”, he informed.

He added, “Workers' wages have risen more than 20 percent since last year, but our orders have reduced more than 30 percent, so while demand continues to be weak, production cost is rising significantly”.

The increase in labor costs have made garment producers in Zhejiang and Guangdong transfer part of their operation to Anhui and Jiangxi provinces where labor costs are relatively low.

Some clothing companies are also planning to set up factories in India, Cambodia and Vietnam. The Ningbo based Youngor Group bought over an apparel factory in Vietnam last year.

According to the statistics, share of China's textile and garment exports to the EU and US fell 1.4 percent and 1 percent, respectively, last year.

Fibre2fashion News Desk - China

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