China's retail market looks set to soar over the next few years as the government acts to encourage domestic growth to offset a possible slowdown in clothing exports. Rising costs in China are already forcing an increasing number of Western apparel brands and retailers to cut back on their sourcing from China and ha
China's retail market looks set to soar over the next few years as the government acts to encourage domestic growth to offset a possible slowdown in clothing exports.
Rising costs in China are already forcing an increasing number of Western apparel brands and retailers to cut back on their sourcing from China and have their apparel manufactured elsewhere, a recently-published report suggests.
In response, the Chinese government is pursuing a policy of encouraging growth in the domestic clothing market in order to take up slack in its manufacturing sector caused by this apparent loss in competitiveness, according to Textiles Intelligence.
The rise in costs in China stems in part from significant increases in fuel costs and shipping costs. Also, wage rates have risen to the point where they are higher than in many other Asian countries. Moreover, wage costs are set to increase further, given the Chinese government's commitment to raising minimum wage rates by an average of 13% per annum during 2011-15.
Early signs of a shift in apparel manufacture have been seen in EU clothing import trends. In 2013 China's share of EU clothing imports from all sources in value terms fell from 41.7% to 40.1%, having fallen sharply in the previous year.
However, while China's share of US clothing imports from all sources fell from 37.8% to 37.3%, its volume share grew as rising prices were largely offset by productivity gains.