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'China losing price advantage'- Foreign trade official

23
May '12
The price advantage of previous years in China's traditional exports, is facing challenges as wages, logistics, raw materials and financing costs continue to rise in recent years, a top Chinese official said.

Constraints over energy, land and ecological environment has become evident on the development of foreign trade, coupled with the appreciation of Renminbi, said, Mr Wang Shou Wen, director of the Foreign Trade Division under Chinese Ministry of Commerce.

Prior to 2010, Chinese produced textiles and clothing held absolute dominance and achieved rapid growth in China's traditional markets of Europe, the United States and Japan, but the phenomenon began to change 2011 onwards, he said.

In the first three months of this year, China's exports of textile and apparel products to Japan increased by about 7 percent, while those from Vietnam and Cambodia to Japan increased more than 40 percent.

Insiders say that rising labor cost is an important factor that has led to textile and apparel orders moving away from China. Wages and other benefits account for 50-55 percent of processing costs in clothing business.

He said that in addition to cost factors, China should also pay attention to changes in global business strategy. Wang suggested that Chinese enterprises, especially those in eastern China, should consciously target domestic markets, more so central and western regions.

It is known that the economies in central and western China have displayed rapid development in recent years and their total economic output accounts for 43.5 percent of the country. But so far, their dependence on foreign trade is only 10.6 percent.

Fibre2fashion News Desk - China


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