Clothing export companies at the China Import and Export Fair (CIEF) have raised the price of their products by 3 to 10 percent to cope with increasing manufacturing costs.

The price of raw materials and labor have largely been on the up this year, with general costs for most clothing firms rising by about 7 percent.

The export tax rebate rate has been adjusted from 13 percent to 11 percent with effect from July 1. The clothing industry, which usually only has a thin margin of profit, has been greatly affected by the change.

Usually, when manufacturing costs rise, manufacturers will increase their export prices. However, many companies encounter a lot of difficulties when they decide to do it," said a Bosideng Company Ltd manager, surnamed Wang.

Competition in the global clothing industry is extremely fierce, and China is just one of many countries in the world producing quality garments. 

Therefore, if Chinese companies increase their prices, buyers will turn to other countries such as Vietnam, India, Pakistan and Cambodia for their clothing needs, Wang pointed out.

Bosideng, one of China's largest makers of down jackets and coats, raised its export price by about 5 percent at this CIEF.

The company been able to confidently raise its prices as it is renowned worldwide for its quality products and has few competitors in other countries, Wang said.

There are a few other clothing companies that have raised their export prices, one of them being Jiangsu Sainty International Group Corp Ltd .

"The company has raised prices only slightly, because we do not want to lose a lot of clients," said one of the company's managers, surnamed Wu.

He said they had explained the reason behind the price hike to their clients.

Veken Group from Ningbo in East China's Zhejiang Province, raised its export price by about 10 percent.

A manager surnamed Li said they have a solid relationship with their clients, most of whom understand the reason behind the price change.

However, the current situation poses a great challenge for most clothing companies.

If they do not raise prices, their profit will shrink, while if they do so, they risk losing a lot of clients.

The adjustment of export tax rebate and trade barriers are two of the greatest difficulties faced by the clothing industry in China.

Most companies said they are functioning as processing factories for overseas brands. A lack of their own registered brands places local garment manufacturers at a disadvantage in the international arena.

The clothing sector is strongly labor intensive and the cost of labor is bound to rise further as China maintains its rapid rate of development. This creates the likely scenario of the world's clothing manufacturers shifting to other developing countries that can provide cheaper labor resources.

It is imperative that domestic clothing companies build their own brands and increase the added value of their products in order to thrive in the cut-throat world of global garments business.

(Source: Canton Fair News)