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Amidst challenges China’s apparel sector continues global lead

"For decades, China has been a global leader in textiles and apparel supply chain however, of late the country has been facing major challenges regarding market demand and supply. The global supply chain dynamics is changing across the world as new trade policies are coming up and the emerging sourcing hubs in the global map. To retain its lead in the global demand supply chain, China, now has to deal with various challenges which include rising labour costs and scarcity of skilled labour in certain areas.China braces to cope with new competition."

 

Amidst challenges Chinas apparel sector continues global lead

For decades, China has been a global leader in textiles and apparel supply chain however, of late the country has been facing major challenges regarding market demand and supply. The global supply chain dynamics is changing across the world as new trade policies are coming up and the emerging sourcing hubs in the global map. To retain its lead in the global demand supply chain, China, now has to deal with various challenges which include rising labour costs and scarcity of skilled labour in certain areas.China braces to cope with new competition

Amidst challenges Chinas apparel sector continues

 

Internationally global marketers are shifting locations of manufacturing looking for lower cost and cheaper labour. Although even few decades back China was a dream destination for manufacturers for skilled labour at low cost, but the story is different now. The generation of skilled, low cost labour in China is gone. The younger generations of china’s labour force are better educated and skilled. Moreover many were born at the times of “one child per family” policy in China. The mindset of the new generation of work force is quite different and also more demanding. Adding to this China is constantly facing labor shortage in coastal provinces seriously.

Hence, with increasing labour cost in China, it is losing the competition to other Asian countries such as Vietnam, Pakistan and Bangladesh. China’s textile exports have declined. For the first time in six years, in 2015, China textile exports fell, dropping 5 per cent per cent to $286.8 billion. Exports to the EU fell 10.6 per cent year-on-year and to Japan by 12 per cent. Exports to ASEAN countries fell 1.7 per cent, according to China customs data. The biggest competitor to China in ASEAN region now is probably Korea, India, Vietnam and Cambodia, etc. Among them, India is another major player in the global textile industry, the country expects its textile and apparel exports to reach $80 billion by 2020. A number of apparel retail brands such as Italian luxury brand Canali, British brand Superdry and American brand Tommy Hilfiger have invested in long-term growth in India. Similarly, Vietnam is still one of the fastest growing textile and apparel producers with growth from 2005-2012 of 28.1 per cent for textile exports and 17 per cent for apparel, of around 5,000 factories in the sector, almost 4,500 are garment producers.

Despite challenges, China’s retains lead

Despite rising labor costs, RMB appreciation and lower demand from export markets, China’s textile and apparel industry are still growing at a healthy pace and looks to dominate the global apparel sector, both as a producer and a consumer for years to come. China Textile and Apparel Industry Report 2016-2019 reveals that the country will continue to remain the leading textile and apparel sourcing country. In immediate future there is no one to overtake China in terms of scale, infrastructure, efficiency, expertise and stability. With the country’s long history and culture of textile development and despite government initiatives to reduce the focus on low-end manufacturing, China’s textile and garment industry still produces more than 40 percent of global textile and apparel exports and it still has the major share in the global textile and clothing trade .

 
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