Despite daunting challenges of spiraling wages and labor shortage, China's significantly influential position in textile and garment production will remain invincible, because of its time-honored reliability in delivery lead-time, its skilled labor pool, and its sophisticated infrastructure, experts specializing in garment and footwear sourcing said at last week's Prime Source Forum, which was held in Hong Kong from March 28-30.

"Our Chinese suppliers are eager to invest in new machinery and technology to make their work better, and they can meet our requirements, while understanding the rationales behind how we Italians work. And the most important of all is that Chinese-made products are fairly priced and delivered on time," noted Alessandra Cocchi, Managing Director of EastMax Fashion Ltd, the buying office of a renowned Italian fashion house.

She added that Chinese manufacturers have the ability and technique to execute complicated designs. "When it comes to complicated products and design styles, and high-end garments, there is no expertise elsewhere like China at the moment. Other countries are relatively young; and comparing with other countries that could produce similar products, China's production cost is still appealing to us."

"Delivery lead-time is a determining factor in the fashion industry. The infrastructure is very good in China, where most raw materials can be delivered on time. And extending delivery lead-time to get a cheaper price just doesn't work in the fashion industry. The speed to the market is much more important than price itself," said David Hampson, Country Manager of The Jones Group, a designer and marketer of brands such as Nine West, who has four decades of experience in the footwear industry.

Challenges facing China

So, in discussing the next country that could possibly replace China's position in terms of its significant influence in the global textile, garment and footwear industries from the sourcing perspective, industry experts at the forum unanimously concurred that "the next China" is - China.

Nevertheless, according to a Chinese expert, Jiang Hui, who is Vice President of the China Chamber of Commerce for Import and Export of Textiles (CCCT), China is faced with internal and external challenges. "Internally, China's costs of raw materials and labor are much higher than that in other emerging countries, and its energy price has been growing at a pace faster than that in the developed countries," he said, also at the Prime Source Forum.

Also, China's overcapacity in the textile sector, the appreciating renminbi and the rising domestic costs are also making Chinese businesses less competitive in the global market, said Mr Jiang, not to mention the country's insufficiency in innovation and design, lack of its own indigenous brands and weakening price competitiveness.

In view of the labor shortage problem in China, the CCCT Vice President said the Chinese textile and garment industry should consider relocating itself to less developed yet more densely populated areas. "Workers will no longer suffer from homesickness," he stressed.

Speaking at the same occasion, Edwin Keh, Lecturer of the Wharton Business School of the University of Pennsylvania, also suggested ways to tackle the rampant problem of labor shortage in China's textile and garment industry. "Instead of running their factories like a military troop, Chinese manufacturers could build their production facilities as a pleasant workplace, where their workers are properly trained and treated. And instead of paying their staff minimum wage, they should offer them a prosperous career path, with which they will willingly stay in the industry," he proposed.

China: A huge consumption market

Mr Keh, who was previously the Chief Operating Officer and Senior Vice President of Wal-Mart Global Procurement, added, "The market place is global now - it doesn't make in the east and sell in the west anymore, and this makes the entire supply chain very unpredictable. China itself is undergoing a tremendous period of turbulence; it is trying to win itself off as an export production economy and a domestic consumption economy. But how we change the paradigm and how we work efficiently with the shift are the key questions."

Mr Jiang agreed, emphasizing the opportunity to develop China's domestic market besides exploring new export destinations, while he envisioned great opportunity for local manufacturers to invest in machinery and technology to bolster productivity and reduce labor costs.

Talking about costs, Mr Keh added people in the textile industry should have a different mindset about the issue. "They need to have better understanding of customers. Instead of thinking of ways to cut costs, they need to think of how to provide added values to customers. It will make the brands look good if consumers are provided with products of better quality and extra values. Of course, this will increase their production costs, but it will pay off finally," he explained.