New statistics show that the advantage of low labor costs in the
Chinese textile industry is facing a threat from some other
neighboring Southeast Asian counties. Gao Hucheng, the vice
minister of Finance Ministry of China, revealed that, according to
statistics provided by a consulting institute, that textile
industry labor costs, the most competitive industry of China, has
been three or four times as some other neighboring Southeast Asian
counties. "Those developing countries have become the most
competitive rivals of Chinese industries regarding value-added
popular products," he said.
It's not good news for China's textile industry, which situated
in the low end of the world industrial chain. The key reason for
the booming Chinese textile industry lies in abundant labor
resources. This advantage is being reduced by other developing
countries.
Gao Hucheng quoted a source in the 2007 report covering the
global comparison of primary textile industries labor costs per
hour. It stated that the average labor cost in South China's
coastal cities has risen to about one dollar per hour. But
according to official statistics from Vietnam, Cambodia, Bengal and
Indonesia, their average labor costs are respectively 0.29 dollar
per hour, 0.36 dollar per hour, 0.22 dollar per hour and 0.36
dollar per hour.
On the other hand, increasingly severe competition will
increasingly cut China's textile industry profits. According to
other statistics from the China Chamber of Commerce for Import and
Export of Textiles (CCCT), the average profit of Chinese textile
export companies is only 3 to 5 percent. They usually only gain 10
percent above the wholesale cost due to export charges.
Much of this year's data shows China's low technology textile
industry listed as a primary industry in its macro-control. An
unidentified message says that export tax rebates will be slashed
by two percentage points. Gao Hucheng didn't confirm this news
yesterday, but he reminded Chinese textiles companies abandon pure
turnout increase. This signal indicates that China will accelerate
its transfer of the domestic textile industry.
For more details, please read the full story in Chinese. (http://www.morningpost.com.cn/article.asp?articleid=132362)
(China.org.cn October 23, 2007)
