In the middle of Yuan Rising—Apparel Evolve in China

Chinese exporters have been hurt by the yuan's rise against the U.S. dollar. Since July 2005 when Beijing ended a direct link between the currencies, the yuan has risen by 16 percent against the dollar. Local inflation in China also has been a challenge for exporters who have seen prices soar. However, Chinese suppliers have been able to remain competitive in the face of inflation. Personally, I don’t think the wholesale movement will be away from China. You know, I am not a person of gassy, so I have got a bunch of reasons to support my opinion.Following is a piece of news from Wal-Mart which will be my first supporter: ‘Despite the rising exchange rate and concerns about product safety, the vice chairman of Wal-Mart Stores Inc., Michael Duke, said Monday in Beijing that the retail giant's level of procurement from China likely will remain steady this year at about $9 billion.’. It simply indicates that this commercial giant believes that by running at one of the highest levels in the last decade, and a rise in China's currency, the yuan, Chinese suppliers are becoming more efficient and enhancing quality.To be honest, I need to make my statement to be focusing on the apparel market, since I am involving into the apparel exporting business.Although China seems to be losing ground as the world's top apparel manufacturer, many experts say this is a natural part of its economic development. As a matter of fact, it is a trend for a country to move its economy from one based on simple manufacturing to one structured on innovation and technology. This trend for China has just started and various contradictions and problems will gradually arise and it is really a very normal historical process to have this kind of trend of shift in manufacturing, just like the U.S. and Hong Kong, who have been through similar circumstances.Truly, in 2007, American and European apparel and textile manufacturers have become increasingly vocal about their dissatisfaction with certain growing trouble spots of producing in China. And they did diversify their sourcing strategies to import from countries such as Vietnam, India and Indonesia etc. However, according to reliable statistics, China still had a major percent share, about 40.2%, of the U.S. apparel and textile import market last year. The country increased the volume of apparel and textile imports to the U.S. by 14.8 percent to 21.37 billion square meters equivalents. Perhaps countries like Vietnam and India would have an advantage on lower wages at this stage, but their higher cost on fabrics sources and technical cost on printing fabrics are apparent to Western companies. Hence, they still consider China as one of their ideal production powerhouse for purchasing.Yet, with China leading the world in foreign direct investment, no one expects the world's factory to stop mass producing anytime soon. Multinational companies have made huge investments in infrastructure, research and employee training, analysts noted. Instead, it is more appropriate to say that apparel companies "have China on a watch list".