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Adidas' decision sends shivers in Chinese apparel sector
28
Jul '12
The decision by Adidas, a leading sportswear company, to close its only manufacturing unit in China in October this year, has sent shivers in the Chinese apparel sector.
 
The relocation of manufacturing units from China to other countries by multinational companies has become common in recent times. 
 
Earlier this year, Topform, an innerwear producer, announced its intention to close its high-cost production line in China and invest in new plant in Cambodia as well as in expansion of its Thailand unit.
 
But the decision of Adidas has increased concern regarding the future direction of China’s manufacturing industry, especially in the context of both national economy and foreign trade growths being below eight percent in the first half of 2012.
 
The rapidly rising cost of production is the main reason for multinational firms shifting their production lines from China to low-cost regions, according to Hu Min, Director of Clothing Department, China Chamber of Commerce for Textile Import and Export.
 
Experts say the decision of Adidas to close its apparel production unit does not mean that China should abandon its traditional labor-intensive industries.
 
They aver that in the long run, China still has evident competitive advantages and the country should enhance its overall competitiveness by upgrading its industrial machinery and technology. 
 
Adidas’ sales in Chinese market are estimated to be around one billion euros.
 

Fibre2fashion News Desk - China

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