Japanese Clothing Companies Reduce Reliance On Chinese Manufacturing

In recent years, Japanese clothing brands have reduced their reliance on Chinese manufacturing in order to protect themselves in advance so as to avoid the impact of trade turmoil between the US and China.

According to the JAFIC, the initial diversification of purchases is based on the increasing cost of production in China, which means that the Trump administration of the United States will impose tariffs on China's exports of US goods, which will have a slight impact on Japanese textile and garment enterprises.

YujiHasegawa, general manager of JAFIC, explained that since 2010, Japanese textile and garment enterprises have been developing production bases in Southeast Asia, seeking lower manufacturing costs, and pointing out that Chinese local competitors are also emulating them.

Almost all UNIQLO products are produced in China, which operates Uniqlo, FastRetailingCo. The business scope extends to 5 new markets in Singapore, Vietnam, Philippines, India and Malaysia, prompting its production base to be more close to and more affordable in Southeast Asian countries. At present, there are many cooperative factories in Vietnam, Bangladesh, Kampuchea, Indonesia and India.

A company spokesman said that despite the year-on-year growth in China's production, with the expansion of production base, Japanese fast selling companies have been reducing production in China, prompting the decline in China's total production share in Asia. The company recently unveiled its list of all brand clothing suppliers, including Theory, PLST and other brand factories, and UNIQLO and GU.

The company also exports from China to 50 stores in the US. Although the cost of manufacturing garments and textiles has risen in China, the spokesman said that so far the US and China tariff wars have had little impact on the operation of the group. However, she added, the company is "closely concerned about the progress of this problem".

Reduce dependence on China

Adastria, a clothing company that owns GlobalWork and other clothing brands, has reduced production in China since its acquisition of Southeast Asian production base in 2013, and its production scale has decreased from 100% to 70-80%, aiming at reducing its dependence on China.

KeiLui, manager of investment relations at Tokyo office, said that "gradually shifting production to Southeast Asia" is mainly to reduce labor costs, gain more local raw materials and reduce all risks in production in China.

However, due to the increased freight costs and other logistics technology challenges in Vietnam, Kampuchea and Burma, the company believes that there is no significant cost savings, and there is no plan to further transfer any production in China, she said.

trade inquires

At the same time, the Japanese Ministry of industry and Commerce will actively offer Japanese textile and garment enterprises the production base in China before the United States may impose tariffs on Chinese goods.

Consultations through the Japan Trade Promotion Agency (JETRO) are part of Japan's Ministry of economy and trade since 2018, aiming to let domestic enterprises understand the latest deterioration of Sino US trade frictions.

AsukaMurayama, international affairs officer of the leisure and industrial department of the manufacturing industry administration of the Ministry of economy and industry, said that the economic and industrial province will continue to monitor its progress as the Sino US trade war may have an impact on Japanese textile and garment enterprises.

Although more and more enterprises are operating through the global supply chain, these supply chains will be affected by bilateral trade tensions. However, she said that after investing heavily in the supply chain, it will not be easy for those enterprises affected by tariff rises to transfer their production base to ASEAN countries soon.