Data released Friday suggests that China is in the midst of its biggest economic slowdown since 1992 and the persistent trade war with the U.S. isn’t helping matters. But a London-based research firm contends China’s dominance as a leading apparel and textile sourcing country will remain despite ongoing efforts by footwear and apparel companies to diversify their respective supply chains.
“It’s not a simple shift,” says Leonie Barrie, apparel analyst for GlobalData. “China is by far the largest clothing and footwear supplier, accounting for 42 percent of all apparel and 69 percent of all shoes imported into the United States last year. All other countries combined are ill-equipped to handle the sheer volume of capacity that would be required to move production out of China.”
On Sept. 1, an additional 15 percent punitive tariff was imposed for the first time on $31 billion in U.S. imports of textiles, apparel and home textiles with current plans to extend the additional duty rate to almost all Chinese imports on Dec. 15.
China’s gross domestic product (GDP) slowed to 6.0 percent in Q3, down from 6.2 percent in Q2, missing analyst forecasts of 6.1 percent expansion and coming in as the slowest economic quarter for the country since Q1/1992. China’s retail sales were 7.8 percent higher in Q3, but local economists are predicting further intense pressure on the country’s economy in the months ahead.
Still, Global Data suggests China’s grip on apparel and textile markets is unlikely to be seriously challenged by another nation any time soon. By value, China owned a 31.3 percent share of world apparel exports in 2018 and exported some 37.6 percent of the globe’s fiber, fabric and textiles.
“Despite the risk of worldwide political instability and the need to diversify supply chains, China’s role as the leading player in apparel and textile sourcing is expected to continue for years to come,” contends GlobalData’s Barrie.