China looks surprisingly competitive as falling sales preoccupy business; Bangladesh becomes South Asia’s leading protectionist; gloom grows in Central America as factories close in Mexico, Honduras and Guatemala…But Koreans are building everywhere
"China flight" disappears as industry concerns switch to collapsing market
China's market share of US apparel imports advanced to almost its highest ever in September, as the average price of Chinese apparel imported into the US grew more slowly than the price of apparel imported from the rest of the world.
The apparel trade's problem is no longer the growing uncompetitiveness of China, difficulty in finding factories or rising cotton prices. It is that European and US demand has suddenly collapsed, apparel sales in developing countries are just too small to provide alternative outlets, and the helter-skelter cotton prices of 2010/2011 have left suppliers - especially in India and Pakistan - seriously short of cash
Gloom grows in Central America.
In spite of much hype about growing interest in Latin America, Mexico's garment trade association claimed 200 garment and textile plants will close this year, the head of the Honduras maquila association said hundreds of thousands of jobs will be lost as 16 plants more to Nicaragua and El Salvador, and Korean Sae-A's ambitious plans for 20,000 new jobs in Haiti will be partly at the cost of at least one of its Guatemalan factories closing.
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New things to worry about in China
The US government has added "growing state capitalism" to its list of ways it claims the Chinese cheat. China seems more worried about garment worker militancy, and has mandated faster wage rises and prompt action by employers to settle disputes. But cargo rates between China and Europe are plummeting
Bangladesh leading protectionist as South Asia struggles with free trade
Bangladeshi garment factory owners refuse to allow foreign factories to open - so Pakistani and Indian owners' threats to relocate are meaningless. The same owners have now added a campaign against EU programme to offer Pakistan GSP+ to their protectionism programme. India and Pakistan struggle to make much headway in their attempt to reduce barriers between freer apparel and textile trade between their countries. India decides it wants foreign retail chains. Then it decides it doesn't. Finally: it does, but only if they just sell one brand. Meanwhile, everyone in South Asia is devaluing.
Koreans lead in worldwide new factory programme
Though Korea finally ratified its FTA with the US, its garment manufacturers have concentrated on opening factories in countries with preference advantages when exporting to the US, Europe or China. With a 10% increase in new factories this year, Cambodia seems to have the fastest growing manufacturing infrastructure. Indians are worried about their businesses' reluctance to upgrade - and we are worried about the slow uptake of India's lavishly promoted textile parks. Bangladesh has stopped building new factories, unless they're locally owned.
Owners' growing fears of minimum wage hikes
Factories in Thailand think the country's minimum wage rise will undermine them. Vietnamese employers are uncomfortable. In Honduras, they're blaming wage hikes for factory closures. Laos delays its rise: Indonesians wish they could and Cambodian unions publicly accept that 8.2% is about as good as they'll get
Other signs of protectionism
Brazilian manufacturers push for more protection against Chinese imports. Mexico blames Chinese "contraband" for 200 factory closures. Egypt increases duties on textile imports - as its government comes under pressure from protesters wanting even more protection from foreign business ways. Jordan offers to subsidise the hiring for a year - but only if the jobs go to Jordanians
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