Raw Materials Are No Longer Cheap &Nbsp; China'S Local Brands Are Moving Outward.

April 27th, 30 years ago, due to the low raw materials and labor force, the world manufacturing center gradually moved to China.

Today, not only is the production of foreign capital brands gradually withdrawn from China, even

No longer cheap raw material prices and rising labor force are the driving force behind this industry's move back.

Cost "eat" profits

Nike, which operates in OEM, has appeared in recent years to pfer part of its OEM business from China to a cheaper labor force in Southeast Asia.

Although Nike official did not confirm to reporters that Nike pferred the information of the production plant, it was invested by Taiwanese businessmen.

Liu Jintang, deputy director of the Bureau of small and medium sized enterprises in Dongguan, Guangdong, told the media at the twentieth China clothing and fashion fair, which was just held, that in Dongguan alone, the cost of manpower increased by 30% and raw materials exceeded 20%.

These factors create pressure on export oriented garment OEM enterprises.

French media reported that French imports of Chinese textile and clothing increased by 7% in the past 11 months, but the increase in production costs actually increased by only 4%.

The increase in imports to Bangladesh and Pakistan reached 26% and 29% respectively.

Regression is good for quality control

It is not only the high cost that makes these foreign businessmen start to "neglect" in China, but also the demands of Chinese manufacturers on the retreat of foreign giants.

A Dongguan shoe clothing processing company told reporters that he was responsible for the long term order scheduling and inventory work. Some Chinese manufacturers may make too many orders, resulting in a high inventory of goods and high inventory. Even high-grade brands had to "dissolve" through discount sales, but this is the last thing they would like to accept because they both sacrificed profits and damaged the brand image.

In addition, media reports said that BarbaraBui moved its production to Hungary, Bulgaria, Romania and Turkey in 2010.

Lagarde, deputy executive director of Jean-MichelLagarde, said: "the distance and language barriers made in China make it difficult for us to keep good quality.

We are more likely to act in our way when working with producers in southern and Eastern Europe.

Of course, closer to the mainland, the more can these brands better control the quality problem.

Zara, a fast fashion giant, can launch a fashion show similar to T in just a few weeks. 60% of its products are produced in Europe or around the world.

Overseas media reported that at the end of last year, Italy underwear brand LaPerla had moved its popular brand StudioLaPerla production line from China to Turkey and Tunisia and moved pajamas from China to Portugal.

LaPerla designer Bianchi (GiovanniBianchi) told the above media that although the cost is relatively high, it can better control the quality because of the distance.

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The trend of Chinese brands moving outward

Not only is the production base of foreign brands being withdrawn from China, but even Chinese brands have begun to move production to lower labor costs.

A leading man garment enterprise in China told reporters that the company is considering moving the garment design to Italy and ready to move part of its production and processing business to Europe. It is possible to build its own overseas center in Italy by 2015.

Similarly, Li Rucheng, chairman of YOUNGOR, told the newspaper last year that the focus of textile and garment manufacturing is not only to pfer to Southeast Asia, but also to Europe.

"Textile and garment industry is not only a capital intensive industry, but also a technology intensive and capital intensive industry. At the same time, we need to retain part of the pfer, but we need to retain part of the brand operation."

It is reported that last year, YOUNGOR group bought a shirt processing plant in Vietnam Hanoi for $about 4000000.

This is an attempt to pfer YOUNGOR's overseas industrial base.

According to Li Rucheng, labor prices in Vietnam are also lower than those in Ningbo.

In the future, this Vietnam factory will develop into one of YOUNGOR shirts processing bases.

Liu Gang, an associate professor at the school of management of Fudan University, who regards industrial development as one of the research directions, told reporters that since the cheap labor force of developing countries has cost advantages in global competition, forcing developed countries to gradually shift the traditional labor-intensive manufacturing industry to developing countries, on the other hand, environmental pressure has also made developed countries move to the developing countries with larger environmental pollution.

"Today, the most important consideration for some developed countries to move some industries back from China is the cost factor."

Liu Gang said that the majority of foreign businessmen use outsourcing mode. Because of the appreciation of RMB, labor costs, raw materials, land and other costs and prices, and environmental factors, the manufacturer believes that the profits earned at home and abroad are not very different, so the industry will move back. This phenomenon usually occurs in high-tech industries and clothing and textile industries.

In the face of the phenomenon of returning or shifting of manufacturing industry, Liu Gang suggested that the Countermeasures for small and medium-sized enterprises should be committed to improving their capability of independent innovation, cultivating their own brands, enhancing the core competitiveness of the manufacturing industry, improving product quality, and upgrading the manufacturing industry.