Editorial: Crisis Hits China's Clothing Industry

3 pages, published in Issue 136, July-August 2008   Report price: Euro 275.00; US$ 365.00

In the March-April 2008 of Textile Outlook International (No 134), we asked the question: “Is China Losing its Competitive Edge in Textiles and Clothing?” We noted that the industry was facing a loss of competitiveness on several fronts: appreciation of the renminbi, higher raw material costs, higher labour costs and labour shortages. On top, the global financial crisis was starting to have an impact on consumer demand in China’s main export market, the USA.

Five months on, a report in EmergingTextiles.com notes: “China’s clothing industry is confronted with a severe crisis this year, resulting in a ... wave of bankruptcies and layoffs.” The crisis is attributed to a combination of higher labour costs, a shortage of workers and the global economic crisis, which has hit demand in China’s major export markets.

Few manufacturers around the world will shed tears at the difficulties in which the Chinese industry finds itself. China’s dominance, and the proven ability of its industry to ramp up production quickly and supply international markets with a wide range of quality products at low prices, has been nothing short of remarkable. But it has driven countless competitors out of business—in developing as well as developed countries.

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• Is China losing its competitive edge in clothing?, (2nd Quarter 2008)

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