Chinalization

            Quite a few posts back I talked about China. More specifically, how the Chinese are becoming huge luxury goods consumers. As China has been on the path to development they have also been becoming wealthier, in large part due to having their hand in the massive pot of textiles. China is now the second largest economy in the world. Development of any nation occurs by placing a higher dollar value on the goods and service a country produces, among other things.
             In the realm of textiles, globalization, and free trade (which largely determines where goods will be produced based on the lowest prices, and trade agreements), China is beginning to feel the effects of it's development. An article I just read speaks with regard to China and India, who is also in a developing stage. The article notes that  wages in China have climbed from $65 to $100 a month to $300 a month. And that the middle class would grow from 80 million in 2007 to and expected 700 million by 2020. The rise of the middle class has caused even Chinese textile companies to begin to produce in less expensive locations like Vietnam. While China is still a top producer/ manufacturer they are beginning to loose the price competitiveness that got them business in the first. Cotton spinners in Bangladesh raised their wage costs by double this year and are still the cheapest in Asia.
           To continue development China will have to compete on a level other than price and will perhaps have to rethink their focus to an industry that is not as chintzy.
           The Chinese are no longer just producers consumers, and there is a growing need to satisfy consumer demand. The Chinese consumer has begun to be recognized as many designers and retailers are starting to venture into China.
            The point of free trade and globalization is to among other things help less developed countries become more developed. China is a perfect example of its positive effects.



Source:
http://www.wwd.com/markets-news/olah-the-american-classic-goes-global-3615947?navSection=package&navId=3616508