Blog: Leonie BarrieMade in China garments facing hurdles

Leonie Barrie | 21 January 2008

Rising prices on garments made in China could well be a possibility for retailers and importers this year as higher wages, worker shortages, the appreciation of the yuan and mounting export costs all begin to bite.
A new labour law that came into force on 1 January is also set to bring in a hefty rise in costs by requiring employers to pay higher social security and housing benefits for all workers. It will also be difficult for companies to fire workers, removing the flexibility that many textile firms enjoy to meet fluctuating demand.
Chinese wages are expected to rise by around 10-15% in 2008, and even though salaries are cheap compared with Western standards, labour typically accounts for half a garment producer's total production costs – making a double-digit increase substantial.
These rises will come as little consolation to US trade groups who believe “a flood of subsidised imports, especially those from China”, is responsible for declining output and job losses at US textile and apparel producers.
Data released by the US Federal Reserve last week shows that the output of US textile mills fell by 12.1% in 2007 – its sharpest drop in 25 years. The figures also show that US apparel output was down by 2.5% in 2007.
In the 12 months to November 2007, US textile and apparel imports by volume from China totalled 21.38bn square metres equivalent (SME), up 16.8% year-on-year.
Rising input costs were also among eight apparel industry trade issues picked by just-style as worth watching in 2008. Others include the likelihood of new EU curbs on Chinese apparel imports, whether or not Vietnam import monitoring will lead to anti-dumping duties, and what will happen when US safeguards expire at the end of 2008.

ANALYSIS: Are rising costs hurting Chinese apparel?


Ethiopia unrest a sourcing risk?

Fashion retailer H&M and UK based glove and leather manufacturer Pittards both say they are monitoring the situation in Ethiopia closely after the country's government declared a state of emergency af...


Asia facing up to increased competition

Increasing competition for garment sourcing contracts is seeing China not only being challenged by other countries in Asia, but by sub-Saharan African and even Russian suppliers too. And it is pushing...


Cambodia raises garment worker wages

The monthly minimum wage for workers in Cambodia's textile, garment and footwear sector is set to rise to $153 from January next year, following a vote on the issue last week. The increase marks a ris...


Sportswear initiatives start to take shape

The results of two highly-anticipated initiatives in the sportswear sphere were revealed last week: the launch of Under Armour’s new UAS lifestyle brand and the first pair of running shoes created at ...

just-style homepage

Forgot your password?