Chinese fashion to be big business

Shanghai is now officially a contender – if not leader - as one of the world's most fashionable cities. It is an inspiring destination as much for its rich history and metropolis as for its design credentials; China today is big business when it comes to fashion.

Earlier this year, British newspapers were full of 'bra wars' stories, the tabloid term to describe the trade dispute between the European Union and China over textiles. And the figures speak for themselves. Imports of Chinese textiles into the EU have increased by 45 per cent in the first half of 2005 and the World Trade Organisation says that China is soon likely to control 50 per cent of the world's textile market.

In Shenzhen, on the Pearl river delta, a seven-day-each-week factory in Hangzhou employs 3,000 employees and turns out 1.2 million black blazers each week for the cheap-chic retailers Zara and H&M.

Yet, however awe-inspiring and humanly frightening as the figures about China's clothing manufacturing capacity are, there is a danger that their sheer size blinds us to even more important changes in the role of China in the fashion business.

To put it simply, China is weary of being the manufacturing clothing basin of the world and wants to be a player in the fashion business. It wants to develop its own brands rather than be the manufacturing arm of other countries'; sell to its own consumers, not to mention those in the rest of the world. And it's easy to see why. Two out of five Chinese people now live in cities and by 2010 the country is predicted to have 250 million luxury brand consumers - a market of enormous proportions.

But competition will be tough in China for any indigenous brand. Much like the East Germans after the fall of the Berlin Wall, the new Chinese have rushed to embrace luxury rather than the culture some might have wished for them - nowhere more so than in fashion, where European luxury brands thrive. Armani has reported that first quarter sales in Greater China this year were up 52 per cent; and while fake Prada may be a badge of pride for the hip Western tourist, for the aspiring Chinese only the real thing will do.

But how might an indigenous Chinese fashion brand gain credibility at home and abroad? Well, perhaps it would have to be exported and gain international credibility before it is reimported - such being the Chinese present love-affair with foreign goods. Or perhaps a Chinese fashion brand needs to attach itself to Chinese art that is globally hip (see the V&A's current Chinese photography show).

Or maybe this is the moment when the Chinese will once again embrace the strengths of their own history, produce work based on traditional craft skills, made from beautiful materials, and yet be defiantly modern. China now enjoys the world's attention - and will do so through the 2008 Beijing Olympics and the Shanghai 2010 Expo - and there couldn't be any better moment for the Chinese fashion business to strut its stuff.

Chinese exports rise for Europe

China's textile exports to the European Union rose by 40 percent in the first eight months of the year, at the expense of other Asian and African clothing exporters, while overall EU textiles imports were little changed, the Financial Times reported.

The newspaper, citing the European Commission's latest trade figures, said the figures are likely to confirm fears that developing countries are among the main losers after last January's worldwide removal of textiles quotas. Burma and the Philippines were the worst-hit Asian countries, with EU imports down respectively by 54.4 percent and 41.4 percent in value terms in the first eight months, the paper said.

South Korea, Thailand, Pakistan and Bangladesh also saw significant falls, by 28.6 percent, 15.1 percent, 16.3 percent and 9.3 percent respectively.
Imports from the group of African, Caribbean and Pacific nations(C-essentially poor former European colonies given preferential trade treatment by the EU (C-dropped 24 percent in value and 28.1 percent in volume, the paper said.

The EU's overall textile imports rose by 2.1 percent in value and two pct in volume. The figures confirm China's boom in clothing exports, with EU imports from the country increasing 43.9 percent by value and 39.9 percent by volume in the first eight months.

The most significant displacement by China has been exports previously originating from Hong Kong, Macau and Taiwan.
In value terms, EU imports from Hong Kong and Macau fell 54 percent and 53 percent.
That probably reflects manufacturers (Cwho had used outward-processing arrangements between China and Hong Kong and Macau before the lifting of quotas(Cshifting more manufacturing to mainland China after January, the paper said.

29 November 2005

Beijing 's Silk Alley under attack

Beijing 's Silk Alley market is being sued by five luxury goods labels for allegedly selling fake goods bearing their names, according to a report in the Beijing Times. Chanel, Prada, Burberry, Louis Vuitton and Gucci have said they want CNY2.5 million (£174,000) in compensation from the market's manager, Xiushui Haosen Clothing Market Co. According to the report, lawyers representing the labels had been able to produce a number of boxes which contained bags they believe are illegal reproductions of the plaintiffs' goods.

3 November 2005

Italy looks to China for fabric sales

Italian apparel fabrics manufacturers, the world's biggest suppliers of high-end fabrics, said they have plans to expand investment in China , a market with a huge potential in the future. Italy , which firmly rejected inexpensive Chinese textile goods in the last round of trade dispute, is hoping to sell more fabrics to China to offset losses in its home market. That's the message from the ongoing Intertextile Shanghai Apparel Fabrics 2005, a leading industry fair which ends tomorrow.

Leggiuno SpA, a major Italian shirting fabrics pr ovider, said it plans to establish a re pr esentative office in Shanghai next year to help expand its exports to China. " China 's dynamic economic growth is creating more demand for high-quality fabrics," said Lorenzo Leva, a manager with Leggiuno. "Although our current exports to China are small, we hope the new Shanghai office will help us explore the fast-growing market," he added. China only bought 2 percent of the company's 5 million meters of annual pr oduction.

He expects the percentage will soar after landing customers like the Jiangyin-based Heilan Group and the Renoma brand from FIRS Corp. "We will further invest to im pr ove the visibility of the company and take care of Chinese taste for fabrics," he said. " China is the market for the future, we have to pr epare for the opportunities." China now buys 10 percent of the total Italian fabrics exported and the pr oportion is growing by an annual 2 to 3 percentage points, said Alessandro Liberatori, with the textile division of the Italian Institute for Foreign Trade, which had a 54-member pavilion at the show.

Italian fabrics exports to China jumped 30.6 percent last year to 6.2 billion euros, according to the institute.

1 November 2005

Brazil requests Chinese curb shoe exports

Luiz Fernando Furlan, the Brazilian Trade Minister, will ask China to curb its export of shoes, textiles and toys to Brazil. During a three day visit to the country, Furlan will request that exports are limited in order for Brazil to avoid having to adopt safeguard restrictions on Chinese imports.

“We have to protect our industry from the Chinese invasion. If we don't, the industry will perish,” Elcio Jacometti, head of the association which represents Brazil's $3.5 billion show industry, told Bloomberg.

In the eight months to August, Chinese footwear sales to Brazil doubled to 9.4 million pairs.

Brazil will ask for the limitation of annual sales to the 2002-4 average, which will allow for a 5 percent growth rate per year.

29 September 2005

China compromise receives go-ahead

The EU parliament has given the green light for the release of some 80 million Chinese sweaters, trouwers and bras, which should reach retailers within a number of days. China should, according to media reports, be pleased with its small victory and may look forward to the US accepting the admittance of Chinese garments soon.

European Commission spokeswoman Francoise LeBail said that France, Italy and other textile producing countries had only agreed to EU Commissioner Peter Mandelson's terms when promised that quotas was be stringently managed in the future. She added that customs authorities have been told that they can release the blocked garments by next week.

8 September 2005

Release Chinese garments pending

The European Commission and China finally reached an agreement yesterday to end their dispute about the import of cheap Chinese textiles. EU member states have yet to approve the deal, which they will be considering today. EU trade commissioner Peter Mandelson and Chinese counterpart Bo Xilai agreed to release half of the 77 million blocked Chinese-produced sweaters, trousers and bras from European ports “ as soon as possible”. China agreed that the rest would either be deducted from its 2006 quota, or switched to other unfilled-quota categories.

Mandelson hopes that EU textile producing countries like France , Spain and Italy will agree to the terms, although this means they will be inundated with 38 million unlicensed garments. These had been ordered by retailers “in good faith” but did not comply with the quotas agreed on 10 June. In the period between 10 June and 12 July – when new quotas were enforced - 135 million Chinese sweaters were allowed into the EU, even though the agreed quota for sweaters was 69 million.

Although Mandelson resisted the reintroduction of quotas on Chinese imports in June, he now said that the EU needed to be more mindful of managing textile quotas and would have to increase contacts with importers and producers. He said this was necessary to smooth “ a transition to a period when there are no quotas at all”. Sir Digby Jones, director general of UK employers organization CBI criticized the European commissions solution, saying that borrowing from next year's quota in order to adhere to consumer demand was not a long-term solution.

“ The real answer is to allow access to the EU for goods produced in China and for EU producers to adapt to the competitive challenge,” he told the FT. “Quotas, agreed or otherwise, are not the way for the developed world to deal with globalisation.”

6 September 2005

China may outsource manufacturing to Bangladesh

China is looking for suitable places in Bangladesh to outsource some of its apparel and textile factories in the aftermath of import restrictions imposed by the USA and EU countries on certain categories of its apparels. Several Chinese teams have already visited Export Processing Zones (EPZs) of Bangladesh and have shown keen interest to invest in textile and clothing sectors. Sources in the Bangladesh Export Processing Zones Authority said they are now receiving a lot of investment enquiries on basic textiles as demand for fabrics has been growing faster and that Bangladesh 's exports are getting duty exemption and concession benefits from across the globe.

The investment proposals from China have not been finalised as yet but "it would be a sizable amount," said BEPZA executive chairman Brigadier General (retired) Zakir Hossain Exports from the country's four operating EPZs stood at US $ 1.54 billion, up by US $ 195 million, during the last financial year.

"We have in the pipeline a joint venture garment project from a US-Sri Lanka joint venture company that might invest around US $ 12 million," said another official of the BEPZA. A Canadian sweater company is investing in Adamjee EPZ to avail Bangladesh 's duty-free entry benefit back in Canada , the EU and other countries. He said Bangladesh remains a lucrative place to the foreign investors because of its cheap labour. In Bangladesh a worker receives a minimum wage of US $ 30 only as against some 300 dollars in China and 200 to 250 dollars in Vietnam .

5 September 2005

Green moves out of China

Following threats made by several German apparel companies to retreat from China , UK retailers are now also shifting production from China to Eastern Europe , Turkey and India . British retail billionaire Philip Green has been quoted as saying that he has been moving production away from China since last December. “I have been taking quite a lot of stuff out of there for a while because we want to be nearer to home for speed to market,” he said. “So we are going to Turkey and East Europe .”

According to a media report, British retailers feel forced to move production in a bid to keep up with customer demand for the latest trends. Moreover, the switch appears to be prompted by the China-EU textile row. Right now, millions of Chinese-made items – which have exceeded quotas - are being held in ports and warehouses where they await their release, while stores run the risk of facing empty shelves.

31 August 2005

EU delibirates release Chinese imports

EU Trade Commissioner Peter Mandelson has said that EU member states will deliberate tomorrow on the possible release of imported Chinese garments from European warehouses and seaports. These garments – about 80 million sweaters, trousers and bras – have been accumulating since 10 June, when textile quotas were imposed on Chinese imports that exceded normal levels. In June, China and the EU had come to the agreement that China 's textile exports growth would be limited to 7.5 percent until the end of 2008.

This situation is, however, causing a rift between textile producing countries like France, Spain and Italy – who have instigated the restrictions against China – and retailers from Germany and other countries, who fear a rise in apparel and textile consumer prices due to the unavailability of goods. Mandelson told the BBC that he hopes that all parties will concede to the unblocking of customs stocks of imported Chinese goods.

29 August 2005

As a result of the ongoing struggle between China and the EU concerning Chinese exports, several German clothing companies have threatened to pull their production activities out of China and transfer them to other countries in Asia , says newspaper Die Welt .

Gerry Weber International AG has said it will move production to other quota-free countries. Meanwhile both Tchibo Holding AG and Hugo Boss AG have indicated that they are considering switching sourcing partners.

29 August 2005

EU Agrees China Trade Deal

The European Union and China agreed on a deal Friday to limit the growth of exports of Chinese textiles and apparel to the 25-member country block in 10 sensitive categories to between 8 and 12.5 percent until the end of 2007.

"Today's agreement will be fair on both sides. It provides clarity, certainty and predictability and will also provide relief for developing country textile exporters to Europe," said Peter Mandelson, EU Trade Commissioner, in a statement in Shanghai released by his office. "It is an agreement that helps everyone's interests. It is a win-win-win agreement."

The base year for the export caps under the Shanghai deal -which kicked in Saturday - are the EU import levels between the period April 2004 to March 2005. However, for T-shirts and flax yarn the base period is from April 2004 to February 2005.

In sensitive categories like pullovers, men's trousers and blouses, the agreed growth rate for the remainder of 2005 is 8 percent, followed by a growth rate of 10 percent each year for 2006 and for 2007. However, the initial export growth cap is higher for T-shirts, dresses, brassieres and flax yarn, starting with 10 percent and continuing with the same level of increases in 2006 and 2007.

Mandelson said China is entitled to reap the comparative advantages of its WTO accession, but stressed that it should do so "while managing its integration into the global economy in a way that avoids fear of China, and that does not provoke a protectionist backlash by European industry and the general public."
In this regard, Mandelson, a former senior minister in the British Labor government of Tony Blair, also suggested that the Beijing leadership revalue the Chinese currency - the Yuan is pegged at 8.28 to the dollar - to help stem protectionist moves.

13 June 2005

Bush calls for added trade pressure

US President George W Bush has called for the US to exert added pressure on China to restrict its global textile exports.
The current tensions between China and the US and EU are mounting, with all parties reluctant to compromise. The US and the EU are demanding that China curb its textile exports as western production companies complain that they are being inundated with cheap Chinese imports, robbing them of business.

President Bush is of the opinion that China is an economic opportunity for the West. "We expect to do a fair deal with China in the issue of world trade," he said. The US is urging China to increase the value of its currency and reduce state subsidiaries to exporters. This week Carlos Gutierrez, the US secretary of commerce, will pay an official visit to China where he will discuss a crackdown on the piracy of copyrighted items, amongst other issues.

2 June 2005

China scraps tariff increases

Earlier today China announced that it would eliminate planned export tariffs on 74 types of textiles. The decision will take effect from 1 June 2005, causing tension in China's relationships with the EU and the US. The finance minstry said China will "stop imposing export tariffs on 78 categories among 148 categories of textiles where restrictions over export tariffs were imposed in January".

"And at the same time (China will) cancel export tariff increases on relative products that were to be imposed in June," the statement said. China had initially promised to increase tariffs on 74 categories of textile products from 1 June in order to appease the EU and the US, who were concerned by the inundation of cheap Chinese imports. China added that it was surprised that its trade partners had not been prepared for the expiration of the textile quota system.

30 May 2005

Chinese outspend Japanese abroad

The Chinese are outspending Japanese on shopping trips abroad. On average they spend $987 (GBP 541) on designer clothes, cosmetics and other items every time they go overseas, writes the China Daily.

According to a survey released last week by market research firms AC Nielsen and Tax Free World Trade, Chinese were spending 30 per cent of their total spending money abroad on shopping. They spent less on the actual trips than Japanese travelers and did not spend as much on hotel rooms and food.

The spending patterns of Chinese shoppers are good news for foreign retailers but are not representative of the 1.3 billion Chinese people as a whole. Approximately 800 million Chinese still live in the country, earn only a few hundred dollars per year and have never traveled abroad. Of those who traveled abroad, 69 percent were women and 36 per cent were in their twenties. These are the groups with the highest disposable income and extravagant spending habits.

According to the survey the top three purchases abroad were fashion, cosmetics and candy.

26 May 2005

China talks reach stalemate

EU Trade Commissioner Peter Mandelson and China's textile negotiator Gao Hucheng were unable to resolve the textile sector crisis. The two met in Brussels to discuss the issue but were unable to resolve it. The EU and the US have been trying to come up with a solution for the surge of Chinese textile exports since the quota system was abolished.

Mandelson stated that Gao Hucheng would extend his visit to Brussels in order to continue talks on Wednesday. The Commission is demanding formal consultations over t-shirt and flax yarn exports.

In response to the EU and US demands China had said it would raise export taxes on 74 categories of textile products but experts doubt whether this will make a difference. The European textile industry has urged the Commission to take immediate action to limit imports, with France exerting great pressure.

25 May 2005

China refuses to limit export

China will not limit the export of textiles to the US and Europe, the Chinese minister of Trade, Bo Xilai, has said today.

His reaction came a day after the US restricted the import of four more categories of clothing from China. This week Euratex also met with the President of the European Commission, Mr. Barroso, to discuss restricting Chinese textile imports.

19 May 2005

EU limits import Chinese t-shirts

The European commission is going to limit the import of textiles from China. Since January of this year the abolishment of quotas has driven the import of t-shirts and cotton from China. This has led to an enormous hike in the sale of cheap t-shirts in Europe and the bankruptcy of textile producers in Europe and third world countries.

China must bring its export back to the average it reached in the period March 2004 - February 2005. China and Brussels have ninety days to reach an agreement.

18 May 2005

Chinese export growth

According to China's Assistant Minister of Commerce, Fu Ziying, "the total volume China's foreign trade is expected to grow by 15 per cent to reach the $1.3 billion (GBP 74 million) mark." Fu made this statement at the 97th Chinese Export Commodities Fair in the southern Chinese city of Guangzhou last month.

"The International Monetary Fund estimated that the world economic growth rate in 2005 will decrease to 4.3 per cent from 5 per cent last year in light of the rocket-high global crude oil price and inflation pressure worldwide. However, it provides a still larger space for China to expand its foreign trade," said Fu.

2 May 2005

Chinese Imports May See New Quota Limits

The lift of tariffs on Chinese imports may not last as long as was expected, as this week a new limit may be introduced on the number of textile imports, with quotos rumoured to be set later this year.

A safeguards investigation is likely to be launched, according to Draper's Record, when the figures for textile importants to the EU from China are released. During the investigation, quotas will temporarily be introduced.

The apparel areas affected are casual categories, such as t t-shirts, blouses, trousers, socks and tights. Manufacturers' federation last week warned of the growth of the Chinese export, which soared by 73 per cent to £1.3bn in January and February, compared to last year's figures.

Liz Fox of the British Clothing Industry Association told Draper's that Euratex was correct to raise alarm, but that the figures were based on Chinese export and licensing statistics that predict what will happen, as opposed to what has happened.

She further stated the these mush show that Chinea is damaging the EU's industry and not just replacing the export market share of other countries. It has been suggested that china may increase export tariffs in response to the increase in its clothing and textile exports.

26 April 2005

EU to curb Chinese imports?

The EU would like to decide by next week whether it is to commence an investigation into the possibilites to stem the flow of textile imports from China.

Claude Veron-Reville, spokeswoman for the EU Commission, said that Trade Commissioner Peter Mandelson hoped that he would have enough data regarding imports since the beginning of 2005 by next week in order to be able to make a decision.

January 1, 2005 saw the lifting of the textile exportquotas for all WTO member countries. Since then many countries have been concerned by the amount of textile being exported by Asian countries like China.

According to Veron-Reville the European Commission was "currently studying the demands for safeguard measures". These demands were made by European textile producers to stop Chinese export figures from rising any further than they have already done.

Veron-Reville said that the ability to make a decision rested on the quality of the accumulated data. The European Commission has been criticised for not having taken sufficient action against China's growing presence in the market. Trade bodies including Eurotex have even demanded an immediate introduction of textiles safeguard quotas.

12 April 2005

Morgan opens in China

The French high-street fashion chain Morgan has opened a factory in Nanjing, the capital of Jiangsu Province, in East China. The factory has recently started operation.

Morgan and the J&B Group of Hong Kong recently launched Morgan (Nanjing) Clothes Making Co. Ltd in the Jianjijng Development Zone. This is the first direct investment the company has made in China. The factory will become the designing, production, procurement and supply chain management center of the Morgan Group in China.

Morgan, which has its headquarters in Paris, has over 1,000 sales outlets in approximately 50 countries and regions. With the opening of its new factory in Nanjing, the company hopes to cut prices by 30 per cent.

Morgan Group plans to open 200 franchise stores in China over the next five years.

www.morgan.fr
29 March 2005

China and EU press for curb on Chinese exports

The United States and the European Union said Friday that they would press China to slow down exports of inexpensive clothing, but they stopped short of promising to impose emergency curbs. New government data showed U.S. imports of textiles and clothing from China shot up nearly 41% in January from December and were nearly 30% higher than a year earlier. The increase followed the end of a decades-old quota system Jan. 1 that had protected American and European textile producers by limiting imports. Jim Leonard, U.S. deputy assistant secretary of Commerce, said the U.S. government would raise the issue with the Chinese to "reinforce U.S. concerns" and seek solutions.

But Commerce Department officials declined to say whether they would "self-initiate" actions aimed at curbing Chinese textile imports. That's what U.S. manufacturers claim is needed to protect their factories from unfair competition and prevent the loss of hundreds of thousands of jobs.EU officials, who are meeting with Chinese officials next week, also promised to press Beijing to slow down its exports but said they did not have enough data yet to act on a call by European industry group Euratex to impose curbs.

Beijing agreed when it joined the World Trade Organization in 2001 to let member countries impose safeguard restrictions on its textile and apparel shipments through 2008. But importing countries have to show market disruption to impose such curbs. U.S. textile groups said the trade figures showed imports of several categories of clothing from China increased dramatically in January compared with the same month last year.

But overall clothing imports from China and all other suppliers were up only 6.7% in January, said Laura Jones, executive director of the U.S. Assn. of Importers of Textiles and Apparel, which represents major retailers. She pointed out that other countries, including Jordan and Egypt, also showed strong gains in January.

The retail group obtained an injunction that has blocked the Bush administration from considering a dozen industry petitions filed late last year asking for import curbs based on a threat of a surge in shipments from China. Jones said the January data showed that there was no basis yet for any safeguard actions.

March 14, 2005

Italy retaliates against China

Italy is about to call for antidumping measures to be taken against China. The Italian Deputy Productive Activities Minister in charge of foreign trade, Mr Adolfo Urso, has called for action to be taken against the country that is increasingly threatening Italy's domestic industry."Italy is about to call for WTO-approved safeguarding measures such as antidumping duites to protect its businesses and employees from unlawful competition, a threat which was highlighted by research carried out in the first two months since the Multifibre agreement expired."

Although Urso is against protectionism, "which I believe would actually be a setback for our businesses", he demands "total compliance with free market rules, and, therefore, with fair competition."Italy is being inundated with cheap and counterfeit textiles and footwear, the sale of which has goine up to 1,300 per cent in certain cases, compared with the same period last year. "It's red alert time. This situation needs to be addressed befor it brings about more social issues," he added.

He supports the measures suggested by businesses and trade unions in the competitiveness bull, which proposes to minimize social repercussions, tackle imitation and enhance growth prospects for Italian businesses. In response to a question about the nationwide strike called by the textile sector trade unions tomorrow, he said he feels for the textile workers. "Yet, we all know that it's not the government or the companies they should blame, but rather those Brussels bureaucrats who are still slow to address the legitimate requests of those who see jobs at risk."

According to Urso "workers, employees, trade unions, the manufacturers' association and the government itself are all joining forces to counter this trend."

8 March 2005

Road to China

Since the lifting of exports quotas on 1 January of this year, the prospects of trade with China have greatly improved. British companies are looking to capitalize on this new opportunity and to help them do so, Director-e and the local Milton Keynes Business link are organising a special seminar.

The speakers will include the UK Trade and Investment's Directore of the China-Britain Council Simon Rodwell who will cover developments in global textiles, Director of Intertek Business Development Paul Jones who will demonstrate how to test the Chinese market, and Jo Bradshaw, Partnership Manager at Business Link and Yvette Ashby, founder and director of Director-e, who will both speak about Links to Success in China.

The seminar is geared towards showing how companies can maked the most of opportunities to trade and manufacture in China, and how they can make contact with the right people. Ms Ashby said: "It is also geared to explaining the impact of new trade legislation and to provide a genuine commercial framework ot allow UK manufacturers to make the right business decisions for a successful future."

The seminar will take place on 7 April in Woburn, Bedfordshire.

www.director-e.com
21 February 2005

Europe Competitive Against China Quota Lift

The newly enlarged EU can help its fashion industry remain competitive by moving production to former Eastern Bloc countries, said Mario Boselli, head of the camera Nazionale della Moda in Milan, in an interview with Agence France Presse. Boselli said transferring production was the best way of competing with China, which is expected to become dominant once quotas are removed in 2005. "Manufacturing in eastern Europe gives the EU the chance to produce in more favourable conditions. The markets are also interesting in terms of growth."

1 October 2004

Chinese Manufacturers To Up Capacity

Nearly 90 per cent of Chinas garment manufacturers intend to increase capacity when garment and textile quotas are abolished from January 1 next year, according to the findings of a survey by trade sourcing group Global Sources. The survey, which is to be released next week, will show 89 per cent of China's medium- to large-sized garment manufacturers have either increased or intend to increase capacity to meet the expected upturn in orders when the Multi-Fibre Arrangement (MFA) ends.

Michael Kleist, general manager for content development at Global Sources, said: "Much of our business is based on market intelligence and we were particularly interested in how Chinas garment manufacturers were positioning themselves when the quota system ends. "We found 89 per cent of the manufacturers we surveyed had either increased or were about to increase their capacity," Kleist told AFP in an interview in Global Sources Manila offices.

The survey covered 205 garment manufacturers in 15 Chinese provinces with total summer 2004 garment sales estimated at 1.45 billion dollars. World trade in textiles and garments has been governed by the MFA since 1974, with it was negotiated by the major trade powers to regulate quotas and market access with the professed aim of avoiding market distortions. Under World Trade Organisation (WTO) oversight, the MFA is to be dropped from next year, allowing free trade in the industry.

29 September 2004

China To Lead Manufacturing World?

A Canadian newspaper recently published that over 30,000 manufacturing jobs would be lost in Canada due to a newly opened Chinese market for production. Where the cost of labour averages about 30 pence per hour compared to CAND 14, the western world will have to face fierce competition with the highly skilled and organised Chinese who are no strangers to mass-market production.

It is not known yet what the effects will be on the global fashion industry, though a shift in sourcing and manufacturing seems inevitable with major companies looking for cost-effective ways to produce goods. Department stores such as Debenhams are already investigating the possibilities of moving key production and sourcing facilities to China and many brands are likely to follow suit.

While the luxury market is mainly produced in Italy and France, high street brands are less concerned where their goods are made. Brands such as Marc by Marc Jacobs have a global production circuit, and do need keep secret that product ranges come from Sri Lanka, Poland, Canada, China as well as Italy and The States. With European Union unification and borders disappearing between east and west, key factors such as cost and time can be calculated to effectively produce goods in a global atmosphere. If China can deliver, and if import duties are no longer a problem in sampling clothes abroad, companies will have to make changes as the 30,000 jobs lost in Canada are not far from the reality back home where some of the most expensive production in the world takes place.

27 April 2004