Japanese apparel manufacturers are shifting production from China to other southeast countries to compensate for the rising cost of raw materials.

They are taking advantage of the reduction of customs duties on merchandise imports because of the Regional Comprehensive Economic Partnership (RCEP).

Matsuoka Corporation, a contract manufacturer for Uniqlo, plans on decreasing production in China from 50 per cent to 29 per cent and plans to increase production in Bangladesh to 34 per cent from 28 per cent and in Vietnam to 28 per cent from 16 per cent by 2025.

China as a source for Japanese apparel has declined from two trillion yen in 2011 to 1.5 trillion yen in 2021, whereas the sourcing of Japan’s apparel in Vietnam has increased from 0.25 trillion yen in 2011 to 0.5 trillion yen in 2021.Due to the increase in labour costs because of the rapid economic rise in the Chinese economy, the onset of the zero-Covid policy, which mandates an initial suppression phase and so on, companies are now looking to shift base to other countries.

The average monthly salary in Vietnam and in Bangladesh is $ 270 and $120 whereas the average monthly salary of a factory worker in China is about $ 670.