China’s resilience shines through in index of world’s most vulnerable apparel supply chains

According to a supply chain vulnerability index released by Just Style, China topped the world’s most self-sufficient apparel and textile supply chains in terms of production relative to the quantity of each product it produces. matters.

Just Style analyzed the data provided by Comtrade world trade database which explores 127 of the world’s 195 countries to determine a balance of goods between textile imports and exports and clothing imports and exports.

The analysis aims to identify the garment and textile manufacturing industries of the least vulnerable countries since they import less of each product than they export.

Without surprise, China ranked first in both indices, while India was in the top three for the clothing and textiles indices.

It should however be noted that Bangladesh, which is considered one of the top garment exporting countries in the world, was one of the countries that did not feature in the index, as Comtrade explained, it had not received data from the Bangladesh National Statistics Office for some time.

China reigns supreme

According to Comtrade data, China imported $21.05 billion worth of textile raw materials in 2020, while exporting $70.61 billion, leaving it with a trade surplus of $49.55 billion. In terms of finished garments, China exported $238.33 billion, while importing $15.66 billion, resulting in a surplus goods balance of $222.67 billion for 2020.

For decades, China has been the benchmark for apparel sourcing. The country’s low unit cost of apparel and highly skilled labor, as well as its vertically integrated supply chains, make it virtually unrivaled.

Along with this, China is a major supplier of textiles, including cotton, and is responsible for 80% of the world’s cotton production. The United States is one of the main markets for its cotton garments and cotton textiles. But in recent years there has been a sharp decline in China’s market share of US imports of cotton apparel and textiles. In 2019, China’s market share in cotton apparel shipments to the United States was 21.9%, falling to 15.4% and 15.2% in 2020 and 2021 respectively.

In terms of cotton textiles, in 2019, China’s market share was 31.6% of US cotton textile imports, falling to 28% and 24.1% in 2020 and 2021.

The strong textile production industry holds the United States in good stead

Many U.S. apparel brands and retailers have been forced to explore different avenues to source apparel due to political tensions between the U.S. and China, which led to the imposition of tariffs and subsequently an increase supply costs. Part of the tension stems from a US crackdown on imports containing inputs from China’s Xinjiang region, where the US alleges mistreatment and forced labor of Uyghur Muslims.

Xinjiang was responsible for 20% of Chinese cotton production and the US bill banning all products from the region was signed into law in December 2021, so it will be interesting to see how China’s lead in this index of vulnerability, which is based on 2020 data, will change now. that a total ban on cotton from Xinjiang is in place.

Additionally, the United States is also a major producer of cotton, which puts it in a strong position on the Textile Supply Chain Vulnerability Index, as it is less dependent on the supply of cotton textiles. and cotton-based garments.

United States is at the very bottom of Just Style’s Apparel Supply Chain Vulnerability Index, with a trade balance deficit between apparel imports and exports of $116.08 billion in 2020. This is likely related to consumer appetite for apparel that the United States is unable to produce quickly enough or at the necessary volumes. Conversely, it ranks high on the Textile Supply Chain Vulnerability Index with a surplus goods balance of $5.36 billion, thanks to its ability to produce and export more textiles than it brings in.

India – a worthy contender for China’s title?

India, another major cotton producer, is trending similar to China and trending high on the apparel and textile supply chain indices for resilience.

In 2020, India exported $18.91 billion worth of finished garments while importing only $1.93 billion. In terms of textile raw materials, it exported $10.65 billion against an import figure of $3.61 billion, leaving it with a merchandise surplus of $7.04 billion.

In recent years, India has focused its attention and investments on ramping up its textile production and export business.

Recently, the The central government has approved a Production Linked Incentives (PLI) scheme worth INR 10,683 crore for fabric and garment manufacturers in the synthetic fiber segment and domestic technical textile companies.

Furthermore, in response to global pressure on sustainability, India is also striving to be seen as green.

Late last year, Adidas, Levi Strauss & Co and PVH Corp announced that they would support a new consortium project to understand both pre-consumer and post-consumer textile waste streams in India, and to drive sorting and mapping solutions. .

Looking at the apparel supply chain vulnerability indices, countries in Asia and North Africa dominate – countries like Pakistan, Indonesia, Myanmar, Sri Lanka, Morocco and Egypt all tend strongly to be among the least vulnerable.

This corresponds to the idea that developing countries exploit their strengths in the labor-intensive sector of garment production.

It is also interesting to see which countries are considered the most vulnerable in the Apparel Supply Chain Vulnerability Index.

The bottom of the table is dominated by European countries, including Germany, the United Kingdom, Austria and Switzerland, as well as United States, Canada, Russia, Australia and Republic of Korea.

Apparel supply chains in developed countries are the most vulnerable

Figures show that developed countries rely on more clothes coming in than going out.

Joining the US at the bottom of Just Style’s Apparel Supply Chain Vulnerability Index are the UK and Germany. The UK exported $10.67 billion worth of clothing goods in 2020, against imports of $35.89 billion, leaving a goods balance deficit of $25.23 billion.

Germany, on the other hand, exported $35.76 billion worth of clothing, against imports of $61.66 billion, leading to a deficit in the goods balance of $25.91 billion.

But the textile supply chains of developed countries are the least vulnerable

On the other side of the coin, Germany, the United States, the Republic of Korea, Australia and Austria were among the top 20 textile exporters in the world in 2020. This makes sense since the Developed countries generally focus on manufacturing and exporting textiles due to textile manufacturing being more capital intensive.

As a country’s economy progresses, we would also expect it to move away from manufacturing and exporting labor-intensive clothing items and instead focus on high-tech textile products. capital and technology intensive.

Pakistan is a good example. Although it is one of the largest apparel producers in the world, its textile supply chain is also considered one of the strongest.

Exceptions to the rule

In 2020, Pakistan exported $3.2 billion worth of textile products while importing $2.84 billion, leaving a goods balance surplus of $362.73 million.

And Uzbekistan, which is just below the top 20 on the Apparel Supply Chain Vulnerability Index (position 22) with a excess property balance of $572.35 millionranks comfortably among the top ten suppliers identified by Comtrade and determined by Just Style to have the least vulnerable textile supply chains (position nine).

In 2020, Uzbekistan, which has a particularly strong cotton industry – despite global concerns about forced labor during its cotton-picking season – exported $1.51 billion worth of textiles while importing just 274, $72 million, resulting in a surplus property balance of $1.24 billion.

The world’s most vulnerable textile supply chains

At the bottom of the table – considered to have the most vulnerable textile supply chains – are some of the world’s largest producers and exporters of ready-to-wear garments, including Sri Lanka (120th position), Indonesia (124th position), Cambodia (125th position) and Vietnam in last place (126th position).

Vietnam – which was the world’s second largest exporter of ready-to-wear garments in 2020 according to World Trade Organization data – imported $16.97 billion worth of textile raw materials while exporting only $6.22 billion. billion, leaving a goods deficit of $10.75 billion.

Interactive heatmaps show the world’s most and least vulnerable apparel and textile supply chains

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