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‘US-China trade war helps Bangladeshi RMG on top’

The latest survey published by the Asia Inspection (AI), a Hong Kong-based global inspection and accreditation body, said that Bangladesh is becoming a more popular apparel sourcing destination for western retailers.

US-China trade war helps Bangladeshi RMG on top
Figure: Bangladeshi apparel products are getting more popular for ongoing trade war.

The latest AI report titled ‘Global Sourcing Trends: Embattled China vs. Regional Competition,’ which was released on October 4, said that geographical diversification of sourcing is underway which is driven by the need for cost optimization that predates the current tariff battles.

Among the respondents of the AI mid-year survey, up to three-quarters of businesses said they were already looking for suppliers in new countries or had plans to do so in 2018 and some of China’s long-standing competitors are emerging as their top choices.

geographical diversification of sourcing is underway which is driven by the need for cost optimization that predates the current tariff battles.

In Southeast Asia, the popularity of Vietnam and Cambodia is confirmed by the double-digit growth in the third quarter of 2018. Meanwhile, a notable portion of companies working in the cost-sensitive textile sector has mentioned of plans to expand their sourcing to other Asian manufacturing hubs such as Bangladesh.

The report also said that, “So far, the manufacturing giant China displays resilience amid the trade escalation, and remains confident in its status as a top sourcing destination.”

Indeed, the findings of the AI mid-year survey indicate that China remains among the top 3 sourcing countries for over 90 percent of respondents worldwide, while the dependence of North American and European buyers on China has actually increased in 2018 compared to the previous year.

On the micro level, Chinese businesses appear to be taking a somewhat relaxed attitude towards the trade war: among the survey respondents, only 36 percent of the Chinese companies said they felt affected by new US-China tariffs compared to almost 60 percent in the US.

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