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China remains the top sourcing for fast-fashion manufacturing

According to the latest Chinese Customs Statistics from January to August 2019, among the top 10 garment exporters in China, American brands such as Nike and Gap have maintained sustainable growth.

China top sourcing fast-fashion manufacturing USA
Figure 1: China’s exports of textiles and clothing to the U.S. totaled $48.96 billion. Courtesy: CNN

Many U.S. brands and retailers have little choice other than China because of the nature of their manufacturing needs and others are in scale-back mode hoping to skirt the uncertainty-fueled risk, recently fashion and apparel based global media Sourcing Journal reported.

Last year China’s exports of textiles and clothing to the U.S. totaled $48.96 billion, a year-on-year increase of 7.9%. For the first half of 2019, those exports reached $21.23 billion, with growth slowed 1.6% year over year. Clothing accounts for 73% of those exports, and textiles make up the other 27%.

The growth of China textile exports is higher than in the garment sector. This is mainly due to the incompleteness of the supply chains of those low-cost countries like Bangladesh and Cambodia. The shortage of raw materials and fabrics boosted China’s textile exports as well.

A survey at last month’s Sourcing Summit New York revealed that as many as 35 percent of attendees from major global apparel brands and retailers intend to reduce their China sourcing.

Textile and apparel export scenario of China into USA
Figure 2: Textile and apparel export scenario of China into the USA.

Those investments are going toward setups in places like Vietnam, Cambodia and Bangladesh, in order to retain an opportunity to serve U.S. brands and retailers wherever they’re headed, and to avoid the tariffs that are making things tricky in China, however, many still rely on inputs from China.

Why does China still at the top of sourcing for American brands?  This is because in comparison to China and other manufacturing countries are not able to provide quicker service.

For some products with complex procedures, the delivery time in Southeast Asia is at least one month slower than in China. Therefore, brands with fast-fashion items that need to be replenished quickly are still better off staying in China.”

Cao Jiaping, Chairman of the China Chamber of Commerce for Import and Export of Textiles and Apparel

Cao Jiaping, Chairman of the China Chamber of Commerce for Import and Export of Textiles and Apparel said, “If the [quantity of] zippers and all the buttons are miscalculated before production, it can be solved in China in only two hours, while in Southeast Asia, the production line would need to be shut down for two days to wait for the right accessory to be replaced,” Cao explained.

“Also, for some products with complex procedures, the delivery time in Southeast Asia is at least one month slower than in China. Therefore, brands with fast-fashion items that need to be replenished quickly are still better off staying in China,” he further added.

Compared with emerging textile and garment manufacturing countries such as Southeast Asia and Africa, China’s supply chain is still in a favorable position for fast orders, and fashion orders and high-end orders are still and will stay in China, Cao expressed his opinion.

According to Cao, China still holds a 31.5% market share of textiles and apparel in the U.S., Cao said the country’s share is down nearly 2% — though he’s not worried about the sector’s sustainability.

Speaking last week at the United States Fashion Industry Association’s (USFIA) Apparel Importers Trade and Transportation Conference, Cao said textile and apparel trade “is the fundamental interest of the two countries and the importance of a mutual market still exists.”

While the United States and China figure out whether they agreed to roll back tariffs or didn’t, the Chinese companies have already been taking the lead in making overseas investments, setting up factories, finding strategic partners and accelerating the construction of overseas warehouses Cao commented.

“In the next five years, it might be in the [Chinese] companies’ plan to transfer 20 to 30 percent of production to overseas factories,” Cao said.

“We can still see and hope for the potential of Sino-U.S. trade operations in the future, and from where I can see, Chinese and American companies have not stopped trying to seek opportunities for cooperation,” he said.

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