China is losing its competitive edge in textile and apparel manufacturing because of mounting costs for meeting new environmental and labor regulations, a report by U.K.-based consultancy Textiles Intelligence said. This comes as manufacturers worldwide face rising costs for energy and raw materials. The report notes that at least seven Asian exporting nations now can offer lower labor costs than China. Labor expenses for apparel workers in Vietnam and Pakistan are as low as 38 cents and 37 cents an hour, respectively, and far lower than China’s in the same sector, which can reach $1.08 an hour in coastal provinces. In Cambodia, labor costs are 33 cents an hour, and in Bangladesh they dip to 22 cents an hour, according to the study. Upward pressure on China’s currency, the yuan, and lower export tax rebates for Chinese producers also have eroded the industry’s competitiveness.
This story first appeared in the July 22, 2008 issue of WWD. Subscribe Today.