Blog: Leonie BarrieIs China losing its competitive edge?

Leonie Barrie | 22 April 2014

Further confirmation that China's garment manufacturing industry continues to lose its competitive edge came last week when it was revealed that a number of Hong Kong garment companies are looking to build plants in Burma/Myanmar.

While industry executives continue to stress that China still has a pivotal role to play as an apparel supplier, interest in alternative sources takes into account shifts in domestic demand, investment in Southeast Asia, and outside opportunities like Africa, according to discussions at the recent Prime Source Forum in Hong Kong.

And as if to emphasise the increasing challenges in China, around 40,000 workers last week downed tools at seven Yue Yuen factories - with some 3,000 taking part in a protest over social security payments. It is the second strike by the workers this month, and according to China Labor Watch, is "likely one of the largest Chinese worker strikes in recent history". 

Mexican lobby group Ciceg (Camara de la Industria del Calzado), meanwhile, is calling for anti-dumping measures to be implemented on footwear imports from China, which trade leaders say could force the shutdown of hundreds of factories.

For retailer Gap Inc, however, China's appeal as a consumer market is such that it hopes to grow sales there to US$1bn in three years. The plans, announced during a company investor day, come as part of wider efforts to gain share in the $1.4trn global apparel market. 

Retail behemoth Tesco has also revealed major expansion plans, and intends to return to the US with a chain of F&F clothing franchise stores. The announcement was, however, somewhat shadowed by the group's second year of falling profits.

Retailer SuperGroup is re-aligning its supply chain to support its international growth ambitions, COO Susanne Given has told just-style. Over the last 12 months, the company has has been working to expand its sourcing base in a bid to better manage risk and meet expansion plans. 

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