China emerging a potent export destination for B’desh apparels

by Apparel Resources

12-November-2019  |  3 mins read

BD-China
Image Courtesy: www.theindependentbd.com

The ongoing trade war with USA may have impacted China’s apparel exports but that does not seem to have much of an impact on the domestic market. China’s roughly 1.3 billion population constitutes a huge market for garments, and one that is growing every year. According to Euromonitor, China’s adult garment market was worth around RMB1,571.7 billion in 2018, an increase of 7.8 per cent year-on-year, and the market value is expected to reach RMB1,725.8 billion by 2020.

Euromonitor further underlined then that China will exceed the United States and become the world’s largest apparel market by 2019. Specifically, annual apparel sales in China will reach US $ 333,312 million in 2019, an increase of 25 per cent from US $ 267,246 million in 2014. In comparison, apparel sales in the United States is estimated to reach US $ 267,360 million in 2019, which is only 3 per cent higher than US $ 260,050 million in 2014.

This rising demand in the Chinese domestic market for apparels seems to have benefitted Bangladesh a big way! In the last decade, garment shipments to Chinese markets grew by 860 per cent to US $ 506.51 million. Back in 2010–11, export earnings were only US $ 52.81 million.

Based on year-on-year calculations, FY2018-19 saw a growth of 29.33 per cent, according to the Bangladesh Export Promotion Bureau.

The duty-free market access, incentive packages and high cost of labour in China are some of major reasons behind Bangladesh’s rising exports to China, maintain industry insiders. There are other reasons as well behind this apparel export hike.

As per former president of the Bangladesh Garment Manufacturers and Exporters’ Association (BGMEA), Siddiqur Rahman, rising production costs in China have handed Bangladesh the opportunity to export cotton-based apparels.

China is reluctant to engage in the manufacture of low-end readymade garments since it is moving towards building high-tech industries, said Rahman speaking to the media, adding, besides, the Chinese Government also discourages textile manufacturing in their country because of environmental concerns.

Lead time also is a significant factor, it seems.

“Lead times are pivotal for us in this era of fast fashion. The distance between China and Bangladesh is less compared to European countries and the United States. This has led us to increase the quantity of shipments to China,” maintained BGMEA Director Md. Mohiuddin Rubel, adding, “We need to utilise the geographical closeness with China to swell our readymade garment exports.”

The stimulus package provided by the Bangladesh Government for exporting to new markets also seems to have an important role alongside that of the duty-free market access.

It may be mentioned here that since 2011, the Chinese Government has provided Bangladesh a preferential trade benefit as part of which Bangladeshi exporters enjoy duty-free access for over 5,000 products, including apparels.

This has also helped boost garment exports to China, Siddiqur felt.

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