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Getting in & out of China

10 Aug '06
4 min read

Japan's Textile Importers Association revealed that import in price in the first half year of textiles in 2006 increased by 14.6 percent to 1,194.6BJyen. Volume increased by 4.3 percent to 488.039million ton.

Japan imports about 90 percent of garments from China, followed by Korea. Japan's high reliance on China is due to low labor costs (formerly), speedier shipment time and low cost of shipment.

Still many companies were becoming aware of their high-reliance on China and the negative influence due to rising labor costs. Whilst companies are finding ways out of China manufacturing, they are seeing China as the next big market to target.

With labor prices going up in China, and there seemingly lies the trend among the Chinese factories to favor American and European manufacturing than the Japanese due to larger volumes and less intensity on quality, Japan's industry is looking into other prospective areas of production.

Going further away from China would increase shipment cost and time so the most focused area is Hunchun, near the border of Russia and Korea. There is hope that a new route of shipment will open in due time and already Japanese companies have plans on building factories in that area.

Japanese factories are procuring employees from areas in the suburbs of China to keep the costs lower. They give bonuses to employees who can introduce workers from the outer areas.

Another strategy is to get out of Chinaand most are looking at Vietnam as the next China. Onward Kashiyama and another apparel firm in Fukushima will jointly invest in building an apparel manufacturing factory in Vietnam.

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