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U.S. investors are still optimistic about investment prospects in China |
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2011-10-11
Recently, media claims that U.S. apparel and footwear companies will re-plan their overall investment environment of the entire Asia Pacific region, due to the impact of higher labor costs in China, Bangladesh, India, Indonesia and Vietnam will become main beneficiaries from this "change".
However, KPMG international accounting firm has recently issued a study, saying that U.S planning of product purchase destination will eventually get balanced among production rate, product quality and price. For the moment, Chinese textile manufacturers are still more prominent in manufacturing advantages compared to Bangladesh, India, Indonesia and Vietnam.
As early as the beginning of the year, a large number of experts and scholars of the textile industry began to say that U.S. textile industry would "escape" from China; labor costs became a hot topic in the textile industry for a time. But president of KPMG Asia Pacific Nick Debnam says that cost of labor is not the only criterion to measure national competitiveness in the textile industry.
Dinan stresses that no matter where to invest, it is impossible to completely avoid the challenge of rising wage. Even in India, its mills have to increase annual wage by 10 percent. Bangladesh had its minimum wage level doubled in 2010. Wage is just a relative parameter to measure the competitiveness of labor-intensive industries, while a country's labor force quality, infrastructure construction and other factors will determine the ultimate potential of an industry.
The Study says, China has relatively stable population size of people in 18 to 30 years old, meanwhile China is also stepping up efforts to train professionals in the textile industry, and therefore, China’s labor quality is correspondingly increasing. Although with China's rapid economic development, wage increase has become the inevitable fact, labor force quality and productivity levels in China are far better than India, Indonesia and other Asia Pacific countries.
Current production sizes of other countries are far unable to compete with China.
The research indicates that by further increasing productivity and improving infrastructure, as well as possessing nine ports among top 50 world container ports, China’s purchase attractiveness till can not be shaken. The construction of China's highway and railway network also means that China's internal market is creating opportunities of new development. Thus, U.S. investors are still optimistic about investment prospects in China.
Source:ccfgroup
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