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What’s Next for Chinese Manufacturing?

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Does Made in China have a future?

That was the underlying question of a Sourcing at Magic seminar last Tuesday, titled “China: What’s Next?” and the panelists present responded with a resounding yes—despite also discussing the many ways in which the odds are stacked against it.

“How long is the future?” quipped Steve Mostofsky, president and chief executive officer of investment firm TTI Global Resources. “In the near to medium term I do not think that China will exit the apparel and textile industry.”

“I think China is going to be in the game for a long time,” agreed Colin Israel of management consultant firm Walter Wilhelm Associates and former management director of Asia for Black Diamond. “[The Chinese] have a huge resource pool, very sophisticated manufacturing and a ton of capability. We’re not prepared to take that somewhere else. We haven’t seen the quality in other emerging markets in Asia and we don’t have the capability in the United States to bring it all back.”

Chen Zhirong, vice director at China’s chamber of commerce for the import and export of textiles, said he doesn’t foresee a big shift happening in the next five to 10 years. “From designing and manufacturing to logistics and trimmings, you cannot find those in any other countries,” he said.

Indeed, panel moderator Nate Herman, the American Apparel and Footwear Assocation’s (AAFA) vice president of international trade, pointed out that 41.8% of all U.S. apparel imports in 2015 came from China. “It’s the number one supplier of clothes and shoes to the U.S. market,” he said.

With that being said, problems have been mounting in recent years, from rising wages and worker turnover to an anti-corruption campaign, among others—and it’s starting to show in the numbers. Newly released data showed Chinese exports fell 11.2% in January.

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