Quality Products International

Rising costs in China

by on Apr.05, 2011, under China Manufacturing Blog

The question of price quality balance in China is not a new one.

There are many factors influencing both, however the bottom line quastion normally come down to…

Can China remain competitive, particularly as the manufacturing base develops in other parts of Asia.

Procurement Leaders recent article:

Cheap goods from China could be ending

The years of cheap goods from China could be over according to Li & Fung, one of the largest suppliers of Chinese goods for western retailers.

Li & Fung, which supplies apparel and other consumer goods to Walmart, Gap and Debenhams, among others, has said that due to higher labour costs in China, which have resulted in wage increases of about 20% this year, “a new era in sourcing with higher prices had begun.”

Speaking to the Financial Times, Bruce Rokowitz, president of Li & Fung Trading, said, “The biggest topic on the minds of everyone in this business is that higher prices are really here to stay. At this point, retailers are not sure what they can pass on to consumers and what they cannot.”

These higher labour costs are moving the production of goods, such as clothing; away from China to countries such as Vietnam, Indonesia and Bangladesh, which have far lower wage costs.

Full Article

Some factors that continue to contribute to China’s competitiveness, particularly in areas such as the PRD (Pearl River Delta) generally relate to the strong local infrastructure, with regards to other suppliers, QC, lab testing, ease of travel for buyers, shipping and so forth.

QPI Ltd can help you find competitive suppliers in China, and assist with QC across Asia.

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