40% of luxury brands to shift manufacturing away from China
Staff Reporter 2012-10-11 15:16
A Louis Vuitton store in China. (File photo/Xinhua)
Around 40% of foreign companies in China are considering moving their manufacturing bases to other countries, according to the US-based consultancy firm Capital Business Credit.
These companies plan to move their production bases to countries such as Vietnam and the Philippines, or transfer orders to some developed countries, reports the Chinese-language Beijing Business Today.
Emerging countries, particularly in Southeast Asia, are gradually replacing China's manufacturing position due to the latter's increasing labor and raw material costs, analysts said. Labor-intensive industries such as clothing are set to fade rapidly, analysts added.
The US-based World Luxury Association says that 86% of Chinese consumers refuse to buy products labeled "Made in China" due to the country's reputation for cheap goods. Many global brands do not want to lose their customer base because of the label and the ability of Chinese customers to purchase international brand luxury goods has been increasing, said the association.
Some global luxury brands hide the "Made in China" label out of sight, or print the words so small that they can only be seen by a magnifying glass, according to the Financial Times.
Another industry trick is to manufacture the products in China before applying some finishing touches in a European nation, so buyers may receive the impression that the goods were made in France or Italy.
US luxury brand Coach has been the first brand to say proudly that its goods are made in China, though the company announced last year that half of its production lines will be relocated to other Asian countries.
