Asia Still Going Strong

For decades, China has been the center of production, and the powerhouse of textile production.
Now, times have changed: rising raw material prices, as for cotton; energy and social costs; and an
increased consciousness of environmental responsibility are making Chinese products more expensive,
although still very competitive. Neighboring countries — such as India, Pakistan, Vietnam and
Bangladesh — are catching up. The latest figures from the World Trade Organization (WTO) underline
this trend: Asian exports in 2010 registered growth of 23.1 percent — the fastest export growth of
any region, and Asian exports of merchandise were worth US$4.69 trillion in 2010, equal to 32
percent of world exports, and a 31-percent increase over the previous year. Within Asia, China was
the top exporter of goods in 2010, with 10 percent of world exports, worth US$1.58 trillion.

In spite of the impressive figures for China overall, the situation in the traditional
apparel sector is changing: For a few decades, China was the only garment-making source with such
advantages as low prices, which worked out very well as long as two new collections per year were
requested by big retail stores and purchasers in the West. Today, department stores request four,
six or even eight new collections with smaller lots in terms of pieces and colors per style. This
situation has dramatically changed Chinese producers’ logistics requirements: Many Chinese fabric
and apparel manufacturers are not built to go along with just-in-time and extensively reduced

The WTO further reports that world gross domestic product (GDP) expanded 3.6 percent in 2010.
However, Asian GDP grew by 8.8 percent, with China and India on top again with increases of 10.3
percent and 9.7 percent, respectively. Following the record-breaking export volume increase of 14.5
percent in 2010, WTO experts forecast world trade growth in 2011 should slow to 6.5 percent. One
can bet now on whether China will be on top again for 2011.

April/May/June 2011