China'S Labor Costs Rise, US Apparel Manufacturers Plan To Move

According to Lianhe Zaobao network, China's labor costs continue to rise, forcing AnnTaylor Stores Corp. and Coach Inc. and other American apparel retailers to consider pferring part of their production to countries with lower labor costs.

American apparel retailers Coach Inc. and Guess Inc. are considering the relocation of garment factories to countries such as Vietnam.

J.C. Penney Co. has said that in the past 5 years, garment factories have been evacuated from China to Indonesia, Vietnam, India and Bangladesh.

Darin, President of Li Feng, said that the recent rise in minimum wage has increased the average labor cost in China by 5% to 15%.

The rise in wage levels, coupled with the rise in cotton prices and pportation costs, will increase the annual cost of apparel retailers in China by 2% to 5%.

Nicholson, chief financial officer of AnnTaylor, said the company is working with 15 suppliers to pfer them to lower cost countries.

But Nicholson also said that only when the quality products can be produced will they be pferred.

In fact, the quality of "made in China" produced by the same cost is difficult to catch up with.

A retail strategist points out that Chinese labor skills and their familiarity with American companies are much better than those of other Asian countries.

Another retail expert said that the cost of clothing, labor accounted for only 15% to 22%, while fabric and logistics can account for 60%, capacity pfer may increase pport costs.