Asian Apparel Giants Are Closing Up Their Southeast Asian Apparel Industry To Play A Positive Role In Southeast Asia.

When Tal Apparel Ltd (TAL Group) opened trousers factories in southern China's Dongguan city in 2007, executives said they expected the factory to operate there for at least 20 years, according to US media.

However, the garment manufacturer in Hongkong will close the factory with 2400 employees next year because it can not keep up with the increasing wages.

Rising wages are pushing away low-cost manufacturers of consumer goods.

Hongkong Tal Apparel Ltd: Asia's prestigious pnational garment enterprise group. Up to now, it has a history of over 60, with an annual turnover of more than 600 million US dollars. Now there are 10 factories in Hongkong, mainland China, Thailand, Vietnam, Malaysia, Indonesia and other countries and regions. The number of employees is over 25000, and the annual output is about 50000000 sets of various garments.

According to the US report, Li Guoquan, chief executive of Tal Apparel Ltd, said that because of the increasing labor costs, "we have always known that China will become a challenge."

Tal Apparel Ltd is one of the largest manufacturers in Asia, producing trousers for Banana Republic and J.Crew brand.

He said that the trousers manufacturer "in the last two or three years, we have been losing money".

Tal Apparel Ltd has begun to pfer trousers orders from China to Malaysia, the company has another factory in Malaysia and is expanding its operations in Vietnam, he said.

The manufacturer plans to maintain another factory in China, which has 4000 employees.

Sewing shirts may be more complicated than sewing pants - and therefore more profitable, because cloth is thinner and easier to crinkle.

Tal Apparel Ltd says that one in six shirts in the United States is produced by the company.

The experience of this garment manufacturer reflects the tough decisions made by Chinese manufacturers, because the world's second largest economy, once a global factory of cheap goods such as clothing and toys, is making efforts to pform higher value manufacturing industries such as automobiles, airplanes and electronic products.

The Chinese government has supported automation and has released a ten year plan aimed at keeping the country at the forefront of technology such as 3D printing and high-end machinery and tools.

The local government has also increased the minimum income of many cities in China by two percentage points, forcing the trapped manufacturers to shut down factories in more expensive coastal cities and move inland or overseas, according to the report.

The company has moved from China to Southeast Asia.

Liu Zhanhao, former chairman of the Hongkong Federation of industry, said that things will not get better.

He expects that between 2014 and 2017, 10% of the mainland factories owned by Hongkong manufacturers will be closed.

The Hongkong Federation of industry comprises about 3000 manufacturers, most of which have factories in the mainland.

According to an analysis provided by a scholar of Hong Kong Polytech University for the Federation of Hongkong industries, compared with the peak in 2006, the number of factories owned by Hongkong enterprises in Guangdong decreased by 1/3 to 3.2 in 2013, partly due to the increasing wages and the difficulty of recruiting workers.

Tal Apparel Ltd is currently in five countries.

It has nearly a dozen factories.

According to statistics, wages and profits in China's manufacturing sector jumped by 31% during the year when Tal Apparel Ltd opened factories in Dongguan.

In 2008, the cost increased by 28%, but since then, it has been reduced to low double-digit annual growth.

At the same time, Southeast Asian countries have become more attractive manufacturing destinations because their infrastructure has improved and workers become more proficient.

It is much easier to find workers in Southeast Asia than in China.

Li Guoquan of Tal Apparel Ltd said that in China,

Usually do not want to work night shifts.

In the past few years, Tal Apparel Ltd has realized that even if its trousers factories increase productivity substantially, the cost of production in China will be higher than that produced in Southeast Asia.

This year, wages and profits in China are expected to grow by 8.6%, down from 10.3% a year earlier.

However, the agency's data show that China's manufacturing sector is on average.

The cost is $3.27 per hour, two higher than Vietnam and 1/4 higher than Malaysia.

The closure of the factory is beginning to change the Pearl River Delta region of China.

This area became an economic generator in the 90s of last century, because manufacturers moved factories from Hongkong to here, and global enterprises set up factories here.

Now, "rental" slogans are posted in factories and staff dormitories in an industrial park.

In September, Gong Guomou, 45, in a industrial city 90 kilometers away from Dongguan, opened a restaurant in September after closing a small shoe factory.

Mr. Kung, sitting in his restaurant, said that small factories could not survive, they were not fast enough to produce, and the production cost was not cheap enough to compete with large factories.