The Future of Asia as a Textile and Apparel Sourcing Base—Discussion Questions from Students in FASH455

Garment factories in Vietnam adopt RFID; Video credit: Li &Fung

#1: How to explain the phenomenon that US fashion companies are diversifying apparel sourcing from China, but not so much from the Asia region? For example, as of 2020, still, around 75% of US apparel imports came from Asian countries.

#2: From the readings and your observation, to which extent will automation challenge the conclusions of the “flying geese model” and the evolution pattern of Asian countries’ textile and apparel industry over the past decades?

#3: It could be a crazy idea, but given the current business environment, what would the textile and apparel supply chain in Asia look like without “Made in China”? What would be the implications for US fashion companies sourcing strategies?

#4: RCEP members are with a diverse competitiveness in textile and apparel production and exports. Several leading Asian apparel-exporting countries are not RCEP members (such as Bangladesh). Is it unavoidable that RCEP will create BOTH winners and losers for textile and apparel trade? How so?

#5: Is the growth model and development path of Asian countries’ textile and apparel industry an exception—meaning it is challenging to apply it to the rest of the world, such as the Western Hemisphere and Africa? What is your view?

#6: What is your outlook of Asia as a textile and apparel-sourcing base in the post-Covid world? Why?

(Welcome to our online discussion. For students in FASH455, please address at least two questions and mention the question number (#) in your reply)

Author: Sheng Lu

Professor @ University of Delaware

32 thoughts on “The Future of Asia as a Textile and Apparel Sourcing Base—Discussion Questions from Students in FASH455”

  1. #1. Although it may seem as US fashion companies are diversifying their apparel sourcing and stemming away from China, they actually aren’t and 75% of US apparel imports are coming from Asian countries. When COVID-19 hit China, the US was severely impacted as China was and is a huge partner in US supply chains. With this interruption in the supply chain it was nearly impossible to get basic needs let alone apparel. Because of this experience, many US fashion companies are looking elsewhere to source from or to come up with alternatives so they are less reliant on China. For instance, many are looking to source from the Western Hemisphere. Though this idea may sound like it would be go immediately into affect, many companies have yet to stray away from China. In other words, US fashion companies are limiting their exposure to China but still keep their relationships with them as a sourcing partner while looking elsewhere that could satisfy near-shoring option. Some reasons as to why they may not have abandoned sourcing from China is the cost and time it will take to create new partners, the cost of production and labor is cheaper in China etc.

    1. too little incentive to diversify? really no feasible alternative? “Made in Asia” is becoming ever more competitive and hard to say no?

  2. #2: In the flying geese model, it is the idea that the most developed country in the region is the “lead goose” and the least developed countries in the region are the ends of the ‘V.’ Essentially as the the “lead goose” becomes more competitively advantageous and more capitalized it will shed the labor intensive and low productivity to the least developed countries. With that being said, automation can challenge the conclusions of this model. Such as, if all the countries in the region start to become more automated the less developed countries in the region will start to catch up to the more developed countries in the region. In other words, the ends of the ‘V’ in the flying goose model will start catching up to the “lead goose.” Thus, the model will not resemble a ‘V’ rather a straight line as all the regions could be on the same playing field. On top of that, it will destroy the competitive advantages within each region. Although this scenario is a very realistic situation to consider, it may take a long time for the less developed countries to catch up. The developed countries in the region are already ahead and with automation it will put them even farther. Thus making a little hard for the less developed countries to be on the same playing field right away.

    1. Very great thought! Some personal comments: 1) While the flying geese model focuses on the manufacturing sector only, we now have a more sophisticated service sector that can contribute to job creation and economic growth (such as tourists, transportation, healthcare, and education). 2) regardless of automation, always, there will be some sectors that are relatively more capital or technology-intensive than others. The production factors can be extended beyond capital and labor also, such as human resources/skilled labor. This means the flying geese model can apply to the modern economy in the 21st century. 3) The country-specific factor is also something interesting to explore. For example, it seems East Asian countries overall are more successful in taking advantage of the flying geese model compared with some Southeast Asian countries.

  3. #6: I think that Asia will continue to be a sourcing base given the fact that America has not fully recovered from the effects of the pandemic. China has recovered much quicker than we have, therefore I think they will be stronger than many countries for a very long time.

  4. #3 Oh wow a world without “Made in China” seems crazy and impossible. If there was no more “Made in China” or say China was no longer on the map, their duties would simply be passed on to someone else. I think that we would see the US become the primary source for textiles and maybe Japan would soon be up there with us, but for apparel manufacturing it would become more diverse than it already is. There would no longer be this super country that controls most of apparel manufacturing and you would see some of the smaller countries getting more developed and being able to provide adequate manufacturing and be similar to China. The implications for US sourcing strategies would essentially be the same, but also different. Instead of having a major hub of sourcing they would have to become more diverse, which they already started to do, it would just have to be on a larger scale. I think there would no longer be a major hub, just because China had the land and labor to be the center for apparel manufacturing.

  5. #3: It seems that many US fashion brands and retailers are looking to diversify where they are sourcing from more recently, so a supply chain that does not involve China may be more plausible than one may think. Vietnam has become an increasingly popular country to source from in Asia, and so I think without China, Vietnam would be the front-runner for apparel manufacturing and sourcing. As long as these Asian countries have the capacity to handle what China currently does, even if it is divided amongst different countries, I think it could be possible to source apparel from other Asian countries. Especially in the case of the Flying Geese Model, without China, the other countries who may be within the same tier, or even higher, would just step up and be able to improve their production in apparel as well as textiles.

    #6: I think Asia as a textile and apparel-sourcing base post-Covid will be resilient and prove their strength within the industry. China was the first to be hit with the virus and the first to bounce back and get back to work, providing much of the PPE needed to the rest of the world, as well as all of the apparel being bought online. RCEP has also shown that Asian countries are willing to work together to become a great force within the trade and apparel industry. I do think there may be some push back to sourcing from Asian countries after Covid because the US realized how dependent they were on other countries and want to localize their sourcing more, however, I do not think that the US will completely isolate their apparel sourcing to the western hemisphere– they will still source from Asia because of its convenience and cost.

  6. #4 – Yes it is unavoidable that the RCEP will result in both winners and losers of the trade agreement. The winners are automatically those within the Asia-Pacific region because they will benefit immensely from the trade deal. Those countries will have lower tariffs to pay, may get easier access at customs, have improved market access for services and significantly better investment opportunities. Those benefits may not be universal for all countries and that explains why the agreement will have winners and losers regardless. The RCEP is the agreement to reduce trade barriers across 15 countries in the Asia-Pacific region; combining ASEAN and non-ASEAN neighbors and the forming world’s largest trading bloc. The agreement essentially will make it easier to manufacture and sell goods in the region. China, for example, is the biggest winner of the agreement and its economy will only grow as a result of the reduce trade barriers so they can fill the market with cheap products. Therefore, the countries not involved that have preexisting relationships with the RCEP countries, may be seen as the losers. That said, it will be difficult for fashion brands and companies in the United States to compete in Asia with the brands that have better access tot he opportunities. Furthermore ,countries like India and Bangladesh also will never be seen as winners of the agreement. India voluntarily withdrew from the agreement and it is only hurting them. That said, it is impossible that this agreement would be one sided with just winners or just losers. Unfortunately, there are two sides to every story.

    #6 – Post- COVID, I think Asia as a textile and apparel-sourcing base will come out strong and continue their efforts to be a sourcing base and will decelerate their economy. Yes, COVID has impacted and hurt many factories in the industry, but I think most will be able to bounce back with help. China was one of the first countries to be on lockdown due the pandemic, however they were the first to get back to work and export supplies to the rest of the world. Furthermore, the RCEP agreement allows Asia-Pacific countries to work together and benefit one another and this deal couldn’t have come at a better time. The pandemic has cause many jobs to be loss, production to be slow and much more, but the opportunities RCEP gives to these countries will benefit what was impacted.

  7. 2. The flying geese model describes how there are regional divisions of labor in Asia and manufacturing is based on hierarchy of economic development. So more developed countries focus on textiles and developing countries focus on apparel. Automation in a way could challenge this model because it is giving more technology and capacity to developing countries to produce at a faster rate at a higher quality. Because of this it could move developing countries into a higher economic development stage, which would disturb the model.
    6. This is a difficult question because it is hard to predict sourcing strategies, especially with Covid. However, I think that companies will continue to source in Asia post-Covid because the region will continue to have the capacity and affordable economic factors to produce textiles and clothing. However, I think that sourcing from China may go down because the U.S. might think we are too dependent on one country. We might need to reduce the amount of vendors but they still need to be very flexible. We learned that the hard way during Covid when China was hit the worst.

  8. posted on behalf of kfoley17

    1) I think the explanation of U.S. companies diversifying apparel sourcing from China but not the Asian region has to do with political tensions. I think the trade war really deterred companies and it made them rethink their sourcing and production strategies. I also think China becoming less attractive to do business with compared to other countries also adds to it. To me, companies decided to rethink strategies and other Asian countries seemed to be a good alternative. Another reason could be changing strategies to be more in the U.S. is not something to happen overnight and will take companies a long time to fully produce in the U.S. Because of this, companies did not look to go the U.S. when looking for sourcing outside from China, they just looked more at what the next best option was in the region.

    6) My outlook for China in a post Covid world is more companies retreating from there and choosing to source elsewhere. Political tensions along with ethical, environmental reasons and pressure from the industry are reasons companies might leave China. I think these reasons are going to cause companies to rethink their strategies and looks for alternatives to China. I also believe Covid in general caused brands and retailers to really open their eyes that if something like this were to happen again, sourcing closer to home or sourcing totally domestically makes things a lot easier. Covid showed brands and retailers how hard it can be to maintain sourcing and production relationships abroad. In general, I think this might cause companies to rethink China and their strategies. Overall, my outlook is that for U.S. companies China is going to be less of an attraction post Covid.

    1. Great thoughts. Two follow-up comments: 1) I do believe the impact of non-economic factors on sourcing is REAL. For example, the alleged forced labor issue related to Xinjiang, China, and a series of actions taken by the U.S. government (such as the CBP withhold release orders) have significantly affected U.S. cotton apparel imports from China. Measured by value, only 15.4% of U.S. cotton apparel came from China in 2020 (and 15.6% in the most recent 12 months), a significant drop from 27% back in 2018. While China’s total textile and apparel exports to the US decreased by 26% in the most recent 12 months (i.e., March 2020-February 2021), China’s cotton textiles and cotton apparel exports to the US went down by over 40%. 2) I think fashion brands and retailers have to consider a wide range of factors when deciding where to source their products. Often it requires companies to strike a balance. For example, China is becoming an increasingly important consumer market for many fashion brands and retailers. Also, given the current COVID situation in India, fashion brands and retailers may have to find alternative sourcing base (https://www.indiatoday.in/magazine/cover-story/story/20210510-covid-s-second-wave-hits-india-s-63-4-million-msmes-1796991-2021-05-01)
      You may also find this article interesting: https://www.scmp.com/economy/china-economy/article/3130567/china-trade-xinjiang-exports-us-doubled-first-quarter-even

  9. #1: I think US fashion companies are diversifying apparel sourcing from China because we realized how dependent we were on them when the pandemic hit. It is obviously not good or efficient to have all of your eggs in one basket, which is why we see companies diversifying apparel sourcing from China. I also think the trade war occurring between the US and China also contributes to why US fashion companies are trying to move to other countries in Asia besides China. Asia provides cheap labor that other countries cannot match up with, which is why the imports are still coming from Asian countries, but just moving away from China to diversify and avoid tariffs.

    #3: Without “Made in China” the supply chain in Asia would heavily rely on Vietnam and Bangladesh as they are China’s main competitors at the moment. US fashion companies would still source from Asia because Vietnam and Bangladesh still offer a lot of benefits similar to that of China, if not better. Since the US imports a lot of apparel from China they would have to relocate where they import from but I believe they would remain in Asia for the benefits of cheap labor.

    1. Good comment! A follow-up comment on your answer to question #3: It is not rare to see US companies actually source MORE apparel from Vietnam than from China today. Particularly for cotton apparel, only 15% of US imports came from China in 2020 & 2021 (Jan-Mar). This suggests that it is not necessarily a “mission impossible” to totally give up sourcing from China, at least for apparel. That being said, the bigger concern is on the textile side—in fact, China is playing a more significant role as a textile supplier for many apparel-exporting countries in Asia. The lack of textile supply is also a key factor why near-sourcing from the Western Hemisphere hasn’t enjoyed much growth despite the US-China tariff war.

  10. #3: It’s honestly hard to imagine a world or retail market without “Made in China” on most products. I think the textile and apparel supply chain in Asia would be much more diverse and possibly give many subordinate Asian countries the chance to develop and thrive economically and socially, like Bangladesh or Vietnam. Without China taking control over the supply chain, I wonder if sourcing would be more affordable for US fashion companies, or if it would actually complicate their sourcing strategies. For one, we might not see tariff wars like we have with China at the moment, which might open up the possibility to create more trade agreements with various countries, making the overall market much more global and diverse.

  11. #1: There has been a lot of competition in the Asia region since Covid-19 hit. Since the pandemic hit, we could not source from China. This resulted in the US looking for alternative countries to rely on, which strengthens Asias competition because it competes with countries who are trying to produce things domestically. In conclusion, although US imports from Asia went down from 2019-2020, Covid strengthens sourcing in Asia because even if the U.S. sources less from China they will still source from Asia.

  12. The Flying Geese model supports the idea that Asia will continues to hold a great portion of the market share in producing clothing and will continue to do so in the near future. Asia still holds a high percent of apparel. The less capital intensive countries (Asia) are making the apparel and the less labor intensive countries (U.S.) are importing the apparel. There will be change in how each countries will contribute. Even though China’s market share is declining, Asian countries are still involved and manufacturing will not leave Asia. Asia’s percentage of apparel imports stay stable, and they have the largest share. Trade in Asia is increasing while trade in China decreases.

  13. 3. Given the current business environment, the textile and apparel supply chain in Asia would look very different without the “Made in China” label. There are a few implications for the United States fashion companies sourcing strategies. Although that does sound crazy and unimaginable, China would be replaced in a heartbeat. I say that because when one lacks in one department, there will always be someone or something there to bring it back up. Another Asian country will step in and replace what China was doing. The United States would also step up and be the most influential source for textiles. It would also make it be more diverse, like they wanted to begin with.

  14. 2. I think automation will lead to the loss of labor force and promote the training of labor force to use new technology. At the same time, garment and textile factories need to hire more skilled people who can master high-tech automation. The apparel industry needs to improve its innovative technology and workers’ ability to survive in the modern society.
    4. As an Asia-Pacific FTA without the participation of Europe and the United States, it represents a strategic victory for China in economic diplomacy and is the highest profile and most far-reaching mega FTA in which China is currently involved. The RCEP was originally intended to integrate the complex economic and trade rules of East Asia and the Asia-Pacific region and to form a relatively unified system of rules to reduce the cost of doing business in regional economic exchanges.

  15. #3 I think that apparel supply would be taken over by southeast asian nations, however, at first they would struggle to get to that level of production. China typically provides fast fashion and cheap sourcing so the nations dependent on that may suffer, such as the United States. In addition, considering that the US is one of China’s top importers of apparel, we would have to make another agreement with another nation or set of nations to fulfill the same needs. Made in China makes up a significant number of apparel sold in the US, so i think the country would suffer and attempt to source domestically more.

    #6 I think that Asia will continue to be a top exporter and sourcing base in the post covid world. Though the EU has made several jumps in the line, their version of fashion is different than what Asian countries produce so I don’t think they’d make for a replacement. Additionally, after learning about working conditions in asian countries, it has opened my eyes and makes me think twice about purchasing clothes from certain retailers and countries. I think if more people around the world are educated about this topic, it would create more of an impact.

  16. #2: I think automation will drastically challenge the conclusions of the flying geese model. Within the flying geese model, countries are described in the shape of a V formation. At the vertex of the V is the most developed country who has the competitive advantage over every other country. The country who is at the vertex has a more advanced economy and has the ability to undertake more capital and technology intensive production. In regard to automation drastically changing the flying geese model, I feel that as more countries begin to use technologically advanced methods of producing clothing the gap between the most advanced economy will begin to shrink overtime. Thus, the flying geese model will no longer exist in due time as more countries adopt the automation process.

  17. posted on behalf of rirossin

    3. I think that if there was no more “Made in China”, a competitor would become the new “Made in China”. They would become just as big of a manufacturer and everyone would just move to sourcing from there. This could possibly be Bangladesh or Vietnam. They are just as cheap for labor and to buy from. It would definitely take some time and adjustments to get to how big China is as a main source, but they would as soon as possible.

    6. I believe that Asia will keep their spot at one of the biggest textile and apparel sourcing bases even in the post Covid world. Europe has been growing, but what they produce is much different. They produce more high end products than Asia. They also have cheaper labor and costs that Europe won’t be able to beat. Even though people are starting to drift away from fast fashion, there are still so many customers out there that just want the cheapest products they can get. They will have to work hard though to get back to the amount they used to produce before COVID.

  18. 6. In a post COVID world, I envision that Asia will continue to be a force of strength in the textile and sourcing segment of the industry. In class, we learned about which countries were able to best accommodate to COVID. While China was one of the first countries to be effected by the virus, they proved their resilience in battling the circumstance. They managed to dedicate the work and time needed to produce PPE products for their country along with other countries. Additionally, Asia has cheap labor costs which will continue to attract outside countries. I think that the pandemic has opened the U.S fashion industry eyes in terms of how damaging it can be to be so dependent on another country. As a result of this, I expect that the U.S may begin to source from areas other than the western hemisphere. It will be interesting to see how the U.S sourcing changes after COVID or if it even changes at all? Despite this, I still think that Asia will continue to be a sourcing base simply due to their low cost and the convenience.

  19. 3) I believe that without “Made in China,” the supply chain in Asia will be scaled down immensely. When things are classified as “Made in China” this means that a majority of the pieces that went into making the product were sourced in China. If this is taken away, the Asian textile and apparel industry would not need to provide as many resources. For the US, this would mean that garments being imported from China would be much more costly.

  20. #3- I think the label of “Made in China” could easily be given on to another country. I think that the powerful position this country holds would just be pushed along. The natural position of someone having a lot of power is something that will not be ever completely avoided. This label would most likely be passed along to the US or a European country and most likely the same dynamic would come about.

    #6 – I think the overall outlook for Asia as a textile and apparel sourcing base is not a necessarily negative one. I do see the possibility of the US shying away from using Asia to the degree it does currently, but I do not see Asian countries ever being completely forgotten by any country who sources there. Regarding post pandemic times, I think the industry will shift not much more than how it has shifted into its way of dealing with the pandemic. I do believe there may be a slight decrease in how much the US as well as other countries depend on Asian countries, but I do not see this as ever being too big of a threat due to the powerhouse qualities the country holds.

  21. 3) Given the current business environment, the textile and apparel supply chain in Asia without “Made in China”, is starting to become more normalized. If you were to have asked this prior to the pandemic I would’ve said I don’t think that will ever happen because for as long as I can remember, everything beyond garments has for the most part had this label. Now, fashion companies are really trying to diversify apparel sourcing beyond China because when they were scrambling for what to do in the COVID-1 9 pandemic they came to realize that they need to have options. These options need to be spread out and provide different alternatives in case something were to happen again. The implications for US Fashion Companies sourcing strategies would be to become more diverse and expand where they are ultimately sourcing, this could also mean closer to us. I personally think that this idea of sourcing in one area will become extinct as we have seen we need to be prepared for the worst to happen and if it were to, having sourcing in one place is not professional nor beneficial for anyone especially US Fashion companies.

    6) My outlook of Asia as a textile and apparel- sourcing based in the post-COVID world is that most US Fashion companies will begin if they haven’t already moved their sourcing elsewhere. There are various reasons to move out of China that may include environmental and or ethical ones that can cause companies to rethink and consider China’s alternatives. With the outbreak companies also just want to be prepared and this sense of preparedness also means sourcing closer or in various places because they have already experienced or seen the hardships that came hand in hand with only sourcing in one place so far. To sum this up, China will definitely be seen as a place with less incentive to source in.

  22. The US is stuck when it comes to diversifying apparel sourcing. It seems great in theory and they have certainly started to do it, but it has been in way smaller doses than expected. I think that this slow progression will continue however. China is become more developed and maturing as a country. This is causing the factories and manufactures to become more expensive for the US fashion companies. I think as this continues to progress we will continue to see this 75% decrease over time.

  23. #3: Without “Made in China” the US would easily find another country to source from. If one country doesn’t exist or they aren’t allowed to a new one will just take over Chinas job. Lots of countries in todays world are now competitors with China, this including Bangladesh. There are lots of similarities between these two countries which is why its a top competitor. It will probably still be a country in Asia due to the fact that the labor is extremely cheap there and no countries want to spend lots when they have the option to spend such a little amount. Lots of brands and retailers are already finding many other countries where they source from. Covid- 19 was also a huge factor as to why so many fashion retailers and products from many countries are produced in other countries. China had to focus on making there own PPE and this forced other countries to make them for themselves.

    #6: My outlook about the Asian textile and apparel sourcing base in the post- covid world is that so many brands had to move out of Asian because Asian needed to focus on producing things for there own country. There was also so many issues in the production line because of customs and it took so long for packages to be sent to another country. Lots of brands started sourcing elsewhere. Countries weren’t prepared to start sourcing other places and it took awhile for them to get the hang of it. Now since its been going on fo awhile they have a better routine of things and know what they are doing more. Overall Asia will defiantly have less of a need for sourcing since other countries can take over.

  24. #3: I think the textile and apparel supply chain in Asia would change without “Made in China”. Countries like the US would look towards other countries like Bangladesh, which are able to provide the same labor for cheaper costs. There would be less reliance on China. In addition, if another situation like a pandemic were to happen, the US would have other options. It would allow for the US to be able to better meet the demands necessary for a situation if it were to arise. The implications for US fashion companies sourcing strategies are to spread out where they source, which could potentially mean closer by. I think for the US they should spread out and expand their sourcing. This would help the country meet the demands and be better prepared for any given situation.
    #6: Post-pandemic, I think that Asia will still remain at the top in the textile and sourcing segment of the industry; however, I think many US companies will work towards relying on them less and less. With all the lack of transparency and sustainability, unfair treatment of workers, and lack of ethics, the demands from the US consumers are no longer supporting Asia’s practices. Although there is less reliance on them and many US companies are shifting towards sustainability and transparency, I do believe that Asian countries, especially China, will continue to remain high in ranking in terms of sourcing.

  25. #2: After watching the video I feel that automation will alter the flying geese model conclusions. It describes countries in the shape of a V, with the most advanced country at the vertex. This country is the most advanced economically and has the ability to produce more technology-intensive products. I believe the gap between many advanced economies will shrink over time as more countries adopt the automated process. As a result, the flying geese model will cease to exist disrupting the current order of things.

  26. #2)
    The flying geese model explains how there are regional divisions of labor in Asia and manufacturing is based on hierarchy of economic development. The idea of automation could very well challenge the flying geese model. If the automation becomes more readily available to developing countries, this could allow them to create more technology based products, which are usually created by the develop countries, according to the flying geese model.
    #6)
    In the post-covid world, I believe Asia will keep its strength that it has maintained for the past years, even through the pandemic. If anything, I believe the pandemic will have only made it stronger because the T&A industry in Asia has learned how to maintain its status and keep up production even through difficult times such as the pandemic. Although some countries are begging to source elsewhere other than Asia, I still believe they will continue to dominate the industry for a long while.

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