Post-China 16 and The Fashion Logistics of an Ever-Changing World

According to a recent report by Austin-based geopolitical intelligence and analysis firm Stratfor, a monumental change in the global manufacturing landscape is underway, fueled by a "continual flow of companies leaving China, or choosing not to invest in China."

In China, Stratfor says, the issue is that the country's recent successes have been fueled by, among other factors, a low-wage manufacturing model. But wages are rising in China, and the country is attempting to shift more toward a consumption model as a result. Meanwhile, other low-wage countries have been rapidly modernizing and making the infrastructure shifts needed to attract investment from foreign manufacturers. Apparel manufacturing will still thrive in China, but there may be better places for certain companies.

As a maturing China moves beyond the low-end manufacturing and export-led model that defined its dramatic three-decade rise, a new group of countries is emerging to assume that role in the global economy. The outlines of this group, what we call the Post-China 16, or "PC16," are only now coming into focus. Indeed, the specific countries may change and the precise roles they play in this transition -- their success in following the path China has trod -- remain to be fully seen. Even though the movement of two indicator industries -- garment manufacturer and mobile telephone assembly -- signals change, this is a transition that is as yet pre-statistical; few if any reliable trade numbers or volumes now exist to plot the contours of this shift. But it is, Stratfor has concluded, a shift that is already well underway.

View the entire report: George Friedman and Rodger Baker on the Post-China 16

So which countries are "the next Chinas" — those where conditions are ripe for a manufacturing boom? According to the report, at least, they are:

  • Mexico
  • Dominican Republic
  • Nicaragua
  • Peru
  • Ethiopia
  • Kenya
  • Uganda
  • Tanzania
  • Sri Lanka
  • Bangladesh
  • Myanmar
  • Laos
  • Vietnam
  • Cambodia
  • Indonesia
  • Philippines

Many of these countries already have burgeoning manufacturing sectors, especially in apparel (such as Sri Lanka and, perhaps most notoriously, Bangladesh). Others, such as Myanmar and Laos, are only scratching the surface of what's possible there after existing mostly in isolation for many decades. None of them will duplicate China's manufacturing success exactly, but they are primed to emulate aspects of the Middle Kingdom's rise.

Whether or not these predictions come to bear, it does appear that apparel companies would be wise to be perpetually prepared for these sorts of shifts in the global landscape. There are simply too many complexities, too many technological shifts, too many looming unknowns to expect the geopolitical status quo to last very long these days. The factors that fueled China's rise from ashes over the past couple decades may not exist anymore now that China has indeed risen.

The point is, apparel companies need to stay nimble and ready to adapt when conditions change. And here at The Apparel Logistics Group, our fashion 3PL and cutting-edge apparel supply chain management services can help.

Posted: 8/8/2013 10:59:25 AM by Global Administrator | with 0 comments

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