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

Digital pieces of the fashion supply chain take shape

The digital pieces of the fashion supply chain puzzle are starting to come together, according to executives at the recent Texprocess apparel technology trade show in Frankfurt, Germany....

BLOG

Latest supply chain leaders?

Swedish fast-fashion retailer H&M, Zara brand owner Inditex, and sportswear giant Nike are not only among the world's leading brands, they also have some of the best supply chains too, according to a ...

BLOG

Finding a solution to the sustainability problem

The key message at this year's Copenhagen Fashion Summit was that the global apparel and textile industry needs to take a holistic view on how it tackles sustainability and responsible sourcing – with...

BLOG

Industry welcoming move to renegotiate NAFTA

The US textile industry has welcomed President Donald Trump's decision to renegotiate NAFTA, saying it is in America's national interest to modernise the trade agreement....

just-style homepage



Forgot your password?