China's textile manufacturing advantages still exist

Summary: From a current perspective, compared with Bangladesh, India, Indonesia and Vietnam, the manufacturing advantages of the Chinese textile industry are still outstanding. The manufacturing advantages of China's textile industry are no longer a simple advantage of labor costs. The manufacturing advantages of China's textile industry lie in the quality of labor and productivity. These are far superior to other countries in the Asia-Pacific region such as India and Indonesia.

Recently, some media claimed that due to the rising labor costs in China, US apparel and footwear companies will re-plan the overall investment environment in the entire Asia Pacific region. Bangladesh, India, Indonesia and Vietnam will become the “change” in this The main beneficiary. However, a study released recently by the KPMG International Accounting Office shows that the planning of U.S. product purchasing sites will ultimately achieve a balance between production speed, product quality, and price. From the current point of view, compared to Bangladesh and India, In Indonesia and Vietnam, the manufacturing advantages of China's textile industry are still outstanding.

As early as the beginning of the year, a large number of experts and scholars in the textile industry began to say that the US textile industry “escaped” China. For a time, the labor cost of the textile industry became a hot topic in the industry. But Nick Debnam, KPMG's Asia-Pacific region, said that labor costs are not the only measure of the competitiveness of the textile industry in each country.

Dinan emphasized that no matter where you invest, it is absolutely impossible to completely avoid the challenge of rising wages. Even in India, the annual wages of its textile mills have to rise by 10%; Bangladesh’s minimum wage level in 2010 also doubled. “The wage level is just a relative measure of the competitiveness of labor-intensive industries, and the quality of a country’s workforce and infrastructure will determine the ultimate development potential of the industry.”

According to the study, the population of 18 to 30 years old in China is relatively stable, and China is also intensifying the training of professional personnel in the textile industry, and the quality of the workforce has accordingly increased. Although with the rapid development of China’s economy, wages rise has become an inevitable fact, but China’s labor force quality and productivity levels are far better than India, Indonesia and other Asian Pacific countries.

In the past two years, Indonesia and Bangladesh’s exports of textile and apparel and footwear products have risen sharply. For example, Indonesia’s footwear exports increased by 42% in 2010; benefiting from the EU’s preferential tax rate, Bangladesh’s textile exports increased from January to July this year. 43% to 18.3 billion U.S. dollars. However, the two countries, together with Vietnam, Cambodia, India, Pakistan and other Asian-Pacific apparel manufacturing countries, are still far from being able to compete with China.

The study pointed out that by further increasing productivity and improving infrastructure, China, which has nine of the world's top 50 container ports, is still unable to shake its “purchasing attractiveness”. The construction of China’s expressways and railway networks also means that new opportunities for development have emerged in China’s internal market. Therefore, U.S. investors are still optimistic about the investment prospects in China.