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China's upstream textile industry may relocate to Asean
Mar '13
China’s textile and garment manufacturing industry has already lost the cost advantage enjoyed by it, and in recent years major textile and clothing importing countries like the US and Japan have substantially reduced their orders in China.
The rising labour costs in China forced globally-renowned brands such as Adidas and Nike to shutdown their manufacturing operations in China in 2012.
In addition, Chinese textile and garment enterprises also began to shift their factories to Vietnam Myanmar, Cambodia, Bangladesh and other Southeast Asian countries that have more labor cost advantage.
Industry experts say that now as orders have moved to Southeast Asia, the entire textile and apparel industrial chain may be transferred, too. According to them, the transfer of orders would be followed by relocation of garment units initially, and finally it would be the transfer of upstream supporting industries.
As of today, the biggest advantage enjoyed by the Chinese textile and garment industry is the presence of complete industry chain. But, once Southeast Asia creates its own industry chain, China's textile and garment industry will suffer a fatal blow, and China’s industry is bound to lose its tag of labor-intensive industry that solves the employment of hundreds of millions of migrant workers, which in turn is bound to affect the industry and economic development in China.

Fibre2fashion News Desk - China

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Courtesy: Commonwealth Bank of Australia

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