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Editorial: China: from apparel manufacturer to apparel consumer
published in Issue 168, April 2014
Rising costs in China are forcing an increasing number of Western apparel brands and retailers to cut back on their sourcing from China and have their apparel manufactured elsewhere. Although the Chinese textile and apparel industry is still internationally competitive in most of the markets for its products, its competitiveness is likely to weaken over the next few years as costs rise. As a result, export growth could falter. However, the report questions whether any other country can match China in terms of manufacturing prowess and scale, and examines the strengths and weaknesses of six alternative production locations, namely Bangladesh, Cambodia, Myanmar, Vietnam, Indonesia and India. In the meantime, the Chinese government is pursuing a policy of encouraging growth in the domestic market in order to take up the slack in its manufacturing sector. As a result, there is likely to be an upsurge in domestic demand which will more than compensate for any softening of export growth. Anticipating an upsurge, a number of Western apparel brands and retailers are expanding their retail operations in China. In this report, Robin Anson discusses these issues and comments on the huge potential for growth in China's domestic apparel retail and e-commerce market.
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