High Risk Of Pferring Garment Industry To Southeast Asia

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Xiaobian of the network introduces to you that the risk of pferring the garment industry to Southeast Asia is high.

Southeast Asia, which has low labor costs, has become the next destination for the garment industry after China. But is it really as good as expected?

In Southeast Asian countries, factory accidents and strikes and protests are frequent, with high policy risks and gradually losing investment trust.

Beginning in 2008, consumers gradually found that the words "made in Vietnam" and "made in Bangladesh" were more and more on H&M, ZARA, NIKE and WAL-MART's clothes and shoes labels.

Behind the small label is that the whole Southeast Asia has split 30% of China's processing orders. Bangladesh is growing to be the second largest garment producing area after China, and the low labor cost is one of the important factors to enhance their competitiveness.

According to the Japan Trade Promotion Council report, the average monthly salary of factory workers in Guangzhou in 2012 was $352, compared with the average monthly salary of workers in Vietnam's Hanoi, Kampuchea Phnom Penh and Dhaka, Bangladesh, which were only $111, $82 and $78 respectively.

The garment manufacturing industry, which needs a lot of cheap labor, is seeing the dawn again here. Investing in Southeast Asia has become a hot topic for foreign businessmen.

Over the past 5 years, Vietnam's foreign investment has increased by more than two times, and foreign investment in Kampuchea and Bangladesh has increased by 85% and 43% respectively, reaching 892 million US dollars and 1 billion 100 million US dollars.

With the entry of foreign capital and the pfer of garment processing industry, the economic dependence of Southeast Asian countries on garment export has made some progress, but the problem also arises.

In November 2012, 121 people were killed in the fire at the clothing factory in the tower of Dhaka in Bangladesh. In April of next year, a 8 storey building collapsed in the suburbs of the capital, causing many people to be buried. The death toll was over 1000.

Bad working environment, rampant gangsters, corrupt government officials, rising prices...

Every social problem is the last straw to crush the poor. The poor clothing industry workers can not maintain their daily lives, and discontent is accumulating.

In September 2013, in order to strive for a minimum wage of $104 a month, Bangladesh's clothing workers took to the streets to protest. The protest lasted for three days, and 400 factories closed down.

By the end of the year, angry workers set fire to a ten storey large garment processing plant.

In early August of this year, 1600 workers were fasting for wages, demanding payment of 3 months' wages and 41 million 300 thousand Tat cards.

The situation in Kampuchea is not optimistic.

In 2013, the Kampuchea fabric production association (GMAC) recorded a total of 130 strikes, the most frequent year in the past ten years.

At the end of that year, 300 thousand Kampuchea clothing workers staged a strike March. GMAC called on members to shut down factories and stop production for three days.

It resulted in a loss of about $200 million and an investment delay of $70 million.

In Vietnam, foreign businessmen are facing more problems.

The instability of social environment and regime; the exchange rate crisis erupted at the beginning of the year; the lack of professional skills training and low productivity of local workers.

Production can only meet the 30% production demand of the textile industry. Most of the middle and high grade fabrics are heavily dependent on imports. In May this year, even violence against foreign investors occurred, which had cast a shadow over Vietnam's business environment.

It is gradually discovered that although the cost of labor is low, the hidden risks and policy risks of Southeast Asian countries are even higher.

The lack of infrastructure facilities and the uncertainty of policy changes is undoubtedly a test for enterprises. This has also shaken many foreign investors' confidence in Southeast Asia, but there is nothing else to do.