Are Textile and Apparel “Made in China” Losing Competitiveness in the U.S. Market? (updated October 2018)

A fact-checking review of trade statistics in 2017 of a total 167 categories of textile and apparel (T&A) products categorized by the Office of Textiles and Apparel (OTEXA) suggests that T&A products  “Made in China” still have no near competitors in the U.S. import market. Specifically, in 2017:

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  • Of the total 11 categories of yarn, China was the top supplier for 3 categories (or 27.3%);
  • Of the total 34 categories of fabric, China was the top supplier for 26 categories (or 76.5%);
  • Of the total 106 categories of apparel, China was the top supplier for 87 categories (or 82.1%);
  • Of the total 16 categories of made-up textiles, China was the top supplier for 11 categories (or 68.8%);

In comparison, for those Asian T&A suppliers regarded as China’s top competitors:

  • Vietnam was the top supplier for only 5 categories of apparel (less than 5% of the total);
  • Bangladesh was the top supplier for only 2 categories of apparel (less than 2% of the total)
  • India was the top supplier for 1 category of fabric (2.9% of the total), 1 category of apparel (1% of the total) and 5 categories of made-up textiles (41.7% of the total)

Notably, China not only was the top supplier for many T&A products but also held a lion’s market shares. For example, in 2017:

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  • For the 26 categories of fabric that China was the top supplier, China’s average market shares reached 40.5%, 22 percentage points higher than the 2nd top suppliers for these categories
  • For the 87 categories of apparel that China was the top supplier, China’s average market shares reached 52.4%, 36 percentage points higher than the 2nd top suppliers for these categories.
  • For the 11 categories of made-up textiles that China was the top supplier, China’s average market shares reached 58%, 43 percentage points higher than the 2nd top suppliers for these categories.

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Furthermore, T&A “Made in China” are demonstrating even bigger price competitiveness compared to other suppliers in the U.S. market. For example, in 2017, the unit price of apparel “Made China” was only 74% of the price of “Made in Vietnam” (in 2015 was 80%), 86% of “Made in Bangladesh” (in 2015 was 93%), 85% of “Made in Mexico” (in 2015 was 90%) and 86% of products by members of CAFTA-DR (in 2012 was 98%).

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Last but not least, the U.S.-China tariff war apparently has NOT affected China’s textile and apparel exports to the United States significantly. From January to August this year, China’s apparel exports to the U.S. declined by 1% in value and 0.3% in quantity from a year earlier, but China’s textile exports to the U.S. increased by 12.3% in value and 7.2% in quantity.  China’s market shares in the U.S. market also remains overall stable.

Are the results surprising? How to explain China’s increasing price competitiveness despite its reported rising labor cost? What’s your outlook for the future of China as a sourcing destination for U.S. fashion brands and retailers? Please feel free to share your views. 

Suggested citation: Lu, Sheng. (2018). Are Textile and Apparel “Made in China” Losing Competitiveness in the U.S. Market? (updated October 2018). Retrieved from https://shenglufashion.com/2018/10/28/are-textile-and-apparel-made-in-china-losing-competitiveness-in-the-u-s-market-updated-october-2018/ 

Author: Sheng Lu

Professor @ University of Delaware

7 thoughts on “Are Textile and Apparel “Made in China” Losing Competitiveness in the U.S. Market? (updated October 2018)”

  1. The results are definitely surprising to me considering the rising cost of wages in China. I think they are still dominating a major market share of T&A due to their resources, capabilities, and capacity. Although the wages are increasing there, China offers companies the ability to get things made in no time at all. For example, the article addressing why Iphones are made in China and will never be made in the U.S. notes of this. In China, most of the workers of some factories live nearby and can be called to work at anytime of the day. They can produce many things very quickly which other less-developed countries cannot compete with- and even the U.S. cannot compete with. People in the U.S. would never work more than their 8-hour shift and be on-call at all times. Workers in China invest their lives in their work, which in more developed countries, workers do not do.

    1. great points! I have to admit it remains a myth why “Made in China” is becoming even more price competitive despite the reported increasing wage level. in the 2018 USFIA benchmarking study, we asked companies the same question. According to respondents, the adoption of automation technology, improved supply chain efficiency, and currency factors could explain the demonstrated price competitiveness of Chinese apparel.

  2. Yes, the result are surprising to me because usually when the labor cost increased, the cost of product should also be increased. However, the statistic proved that it’s going against the norm.
    I think this trend happened because some sort of cost cut happened due to technology advancement, in which it made some process of production faster and cheaper. Machinery allows greater cost cut in various areas during the manufacturing stages. For instance, less workers employed, machinery reduces the amount of fabric waste during the cutting process and minimizes sewing errors, which ultimately lead to less loss and greater profit. Therefore, although the wages of labor increased, the overall price of “Made in China” goods still remained competitively priced in the U.S. market due to cost cut.
    I think China will remain as an important, competitive sourcing destination for U.S. fashion brands and retailers in the future because China is still considered as a developing country and there are lots of potentials that we still can’t predict yet.

  3. These results are very surprising to me. We all know that China produces and exports so many products but I think it is surprising to see how much more products they make compared to the other leading exports. This could be because of technological advancements in China that other exporting countries like Vietnam just do not have yet. When the trade deal between the U.S. and China was being discussed everyone was so nervous that it was going to be this huge change but in reality it didn’t change as drastically as people were saying it would. China is able to stay so price competitive because even though their wages are increasing workers are very skilled and can make more products in less time. I think China’s future looks very bright in terms of U.S. fashion retailers sourcing from them. I think China is always going to be a leading exporter in the textile and apparel industry because no other country can match the combination of technology and skilled workers that they have.

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