Buyers Make a Return to Domestic Production
August 16, 2008
OSSINING, New York – With the U.S. dollar on the decline and rising fuel and product costs, producers in the Americas are now seeing a spike in sales after what many of them call the "China Epidemic."
For the last several years, China has had a monopoly on bulk manufacturing in textiles. It was reported by the Business for Social Responsibility (BSR) that in 2005 "China's textile and apparel exports amounted to U.S. $117.5 billion with an annual growth rate of 17.3 percent, accounting for about 24 percent of the global textile and apparel trade."
Kenneth Kochekian, the owner of International Leather, described this phenomenon as a "vacuum." "Fifteen years ago China opened its doors," he said. "There were no labor regulations and you could employ somebody for a bowl of rice and a bed. There was a vacuum in the United States and everything was leaving – the manufacturing facilities were sucked into Asia."
He indicated that four economic factors that have caused the cost of production in China to rise: The currency exchange rate, inflation, mandatory pollution controls and minimum wages.
According to Kochekian, Chinese inflation has progressed at a rate of three to four percent over the last ten years and of the 500 tanneries that existed in China in 2006, 300 of them have closed their doors due to pollution violations. Because of increasing costs and the diminishing amount of suppliers in China, "What we see is the leveling of the playing field."
To read what other industry experts said, check out the Autumn issue of Fabrics & Furnishings International.
For the last several years, China has had a monopoly on bulk manufacturing in textiles. It was reported by the Business for Social Responsibility (BSR) that in 2005 "China's textile and apparel exports amounted to U.S. $117.5 billion with an annual growth rate of 17.3 percent, accounting for about 24 percent of the global textile and apparel trade."
Kenneth Kochekian, the owner of International Leather, described this phenomenon as a "vacuum." "Fifteen years ago China opened its doors," he said. "There were no labor regulations and you could employ somebody for a bowl of rice and a bed. There was a vacuum in the United States and everything was leaving – the manufacturing facilities were sucked into Asia."
He indicated that four economic factors that have caused the cost of production in China to rise: The currency exchange rate, inflation, mandatory pollution controls and minimum wages.
According to Kochekian, Chinese inflation has progressed at a rate of three to four percent over the last ten years and of the 500 tanneries that existed in China in 2006, 300 of them have closed their doors due to pollution violations. Because of increasing costs and the diminishing amount of suppliers in China, "What we see is the leveling of the playing field."
To read what other industry experts said, check out the Autumn issue of Fabrics & Furnishings International.
