Global Fashion Brands Leave China

Experts say that the global fashion brands are gradually shifting their manufacturing bases from China to countries with lower production costs and labor costs.

In one of his recent interviews Wang Tiankai, President of China National Textile and Apparel Council (CNTAC) said the trend is inevitable as China was no longer a "cheap-in-everything paradise".

Media reports said some Italian fashion brands already moved their production lines to Turkey and Tunisia. The news comes as China's labour and raw material prices rose significantly last year, reported by Xinhua.

China's consumer price index rose by 5.4 percent year-on-year in 2011. Labour cost jumped by 30 percent while raw materials rose by over 20 percent since early February 2012. Official data showed 24 provinces, regions and municipalities in China have raised their minimum monthly wages by an average of 22 percent last year.

The increasing costs has weakened China's competitive edge, leading to a slowdown in the once booming sector.

China's textile exports in 2011 edged up 0.5 percent year-on-year, of which clothes exports dropped by 0.2 percent.

Wang said that the low demand due to the global economic downturn and the industry's cut-throat competition had driven manufacturers to cheaper countries in Southeast Asia or to nearby countries in Europe.

"It is a natural trend for industrial adjustments and the trend will be more obvious in the coming years," he said, adding that large-scale outflow of factories will not occur as China remains a big manufacturing centre.

Besides cost concerns, some experts attributed the change partly to China's efforts to move up the value chain.

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