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Retailers Pull Labor out of Pricey China, but Uniqlo Remains

It’s no secret that apparel and textile buyers have been gradually pulling business out of China–or, as it’s often called, “diversifying”–in response to rising labor costs. The cost of producing goods in China has risen an estimated 20% in the last twelve months, furthering a trend in increased minimum wages and union power, and encouraging some manufacturers to source elsewhere.

Still, a number of global brands continue to source the majority of their clothing in China. Japan-based fashion group Fast Retailing, which operates Uniqlo, told Fibre2Fashion that Uniqlo has produced clothing in Chinese factories since 2009, and around 70% of the brand’s clothing is still made in China. Hema, an international retail organization based in the Netherlands, called China “an important market” for outsourcing apparel.

Mr. Dongming Xu of Wuxi Tianxiu Textiles, a leading textile manufacturer in China, admitted that increasing production costs are “one of the major challenges faced by the Chinese textile and apparel sector,” but said that the industry’s technological sophisticated and existing infrastructure will continue to attract international buyers.

To remain competitive in the face of rising labor costs, Dongming Xu suggested that Chinese garment makers “reduce dependency on laborers.”

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