The garment-making sector in east China’s Zhejiang province is undergoing a difficult time as profits continue to shrink. Some factories have closed due to rising labor costs. Most clothing factories are original equipment manufacturers. In the last two years, with high product inventories and rising competition, many garment producers floundered.
Some have cut their cloth manufacturing business to focus on cloth materials. Some others that used to export women’s clothing to the US and Europe are seeing a dip in profits. A garment factory which primarily makes suits, shirts and business clothes no longer has a cost advantage over competitors in countries such as Cambodia and Vietnam. It exports 40 per cent fewer products than a few years ago and has had to cut the number of workers.
The number of clothing companies in the province has shrunk to 200 or 300 from a peak of about 650. There are more than 1,00,000 garment manufacturers in China employing over ten million people. The country is the largest manufacturer, exporter and consumer of garment products in the world.
There are over 50 garment clusters characterized by product categories all over China. The garment industry is making progress in many aspects such as industrial structure, technology application, brand development, quality control, profitability and exploration in domestic and international markets.