It’s an inevitable march: With exports falling, and the costs of production including materials, labour and the need for cleaner technology rising, companies in China’s own garment industry will be the next generation to move their production offshore.
“They definitely are worried about what they’re going to do with costs rising. They are not expanding fast, but they are wondering what their next step will be as the market expands,” said Wang Jun, secretary general of the China National Garment Association, in Beijing this week. “I think in future it will appear that Chinese factories will move their production base offshore.”
The Chinese garment industry has had a difficult start to the year: This month’s HSBC flash PMI dipped to a four-year low this month, driven down in part by slowing export growth of just 7 per cent year-on-year for January and February – half as fast as in December. China’s own powerhouse GDP growth is also expected to slow this year, to around 8 per cent, down from an average 10 per cent a year for most of the last decade.
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Why China’s sewing machines could go silent,
I recommend people read Tom Clancy. He predicted this situation in a thriller many years ago and while it is fiction it is not to be dismissed.
It is happening this day.