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?


BLOG

Act now to keep receiving just-style newsletters

You may have noticed a red alert bar at the top of just-style’s weekly and daily newsletters asking you to “Act now to keep receiving the just-style newsletter.” ...

BLOG

Apparel imports into the US rose in June

Apparel imports into the US rose in June as merchants stocked up for summer and prepared for the back-to-school season, with imports from Vietnam continuing to surge....

BLOG

US retailers under pressure to grow sales as mall traffic slows

Under Armour is to close stores and cut jobs – around 2% of the company's global workforce – as part of new plans to build a stronger and smarter company with faster go-to-market speed and greater dig...

BLOG

Agile logistics key to new hybrid retail world

US retail giant Walmart has topped a list of the fastest growing retailers thanks to its investment in ensuring it has the right balance between its online and brick and mortar operations....

just-style homepage



Forgot your password?