Return To The Textile And Garment Industry: See How Bangladesh Tigers Eat Chinese Cheese

The quota system has been trained to become a nomadic industry, where labor is cheap and where trade preferences are available.

If we want to survive in the increasingly fierce competition, clothing and textile enterprises must become international players, grasp the customers in their hands, make the market thorough, design and develop.

Time flies, I left the textile and garment industry for 11 years, and the times changed at an incredible speed.

In 2001, the textile quota system completely distorted the market rule of the global textile and garment industry. At that time, the quota was king - the whole industry was full of quotas, and the distribution of quotas nourished the soil of corruption.

In 2005, the quota was abolished, and the textile and garment industry entered the so-called "post quota era".

The abolition of the quota system is China's most important beneficiary.

In 2005, China is still in the "demographic dividend" stage of labor, coupled with the increasingly perfect infrastructure and the increasingly mature industry. The Chinese textile and garment industry is just like a runaway horse.

In the year when the quota was abolished, China's textile and garment exports exceeded 100 billion US dollars for the first time.

During this period, there are still some sequelae of trade protection and appreciation of the renminbi.

The challenges brought about by the implementation, but the fact that China's textile and garment industry dominates the world is increasingly undeniable. The strength of the ants and the world's factories has impressed the world.

By 2013, the world's textile and garment industry seemed to have undergone a strategic change.

Bangladesh, a country that has not been seen more than a decade ago, seems to be taking away cheese from large chunks of Chinese enterprises, and has become the second largest exporter of textile and clothing.

Before 2003, the author visited Bangladesh for many times, in order to get the quota.

At that time, the garments made in Bangladesh had neither quality nor reliable delivery, but the innovations that India enterprises were good at were not available.

After the abolition of clothing quotas, everyone is equal, and why Bangladesh has become the biggest beneficiary after China. This Bengal tiger seems to be covetous with the dominance of China's textile and clothing industry.

Although visiting Bangladesh again and again, everything seems to be coming and going, everything seems to have an answer.

This is not the same as the Bangladesh tiger.

It is no accident that we stand out after the abolition of clothing quotas.

Textile and clothing are labor-intensive industries. The first demand is to have sufficient labor force.

Bangladesh has a population of 160 million, which is eighth in the world, though it is small compared with 1 billion 300 million in China.

What is more to be reckoned with is that 70% of these 160 million people are under 40 years old, so Bangladesh is not an aging country. In a trendy way, the labor force there has the potential of sustainable growth.

Bangladesh now has 60 million of the workforce, and only about 4000000 of the garment and textile industry has created jobs.

The army of textile and apparel made $about 22000000000 in exports in 2013, accounting for 82% of the total export volume of the country by 27 billion US dollars.

This abnormal proportion highlights the importance of textiles and clothing.

This is important for Bangladesh, whose gross national product is only 114 billion dollars and GDP per capita is only 828 dollars.

Compared with China's counterparts, Bangladesh's textile and garment enterprises are still in a period of vigorous development.

In recent years, the absolute export of China's textile and apparel products has increased significantly, while the relative proportion of total exports has been declining year by year (Figure 1).

Indeed, from the point of view of exports, China's textile and clothing products are "an industry with a good sunset but just a dusk".

Compared with Bangladesh, the equipment of Chinese enterprises is not as good as that of Bangladesh.

Enterprises in the industry generally encounter problems such as obsolescence, aging of equipment and market prospect.

Other high-tech exports, such as high-speed railways and wind and solar energy, are more like sunrise.

In fact, from the long-term core competitiveness of the country, China and Bangladesh can only be seen from this small comparison.

Back to Bangladesh's textile and garment industry.

From the buyer's point of view, the demand of consumers is basically saturated. The era of rising tide is over. The emphasis now is not to make the cake bigger, but to cut it up.

The rapid growth of Bangladesh's textile and garment industry has been won in such a brutal competition.

From this point of view, it fought a beautiful battle in the post quota era according to its competitive advantage.

In Bangladesh, textile and garment enterprises usually do not sell at home, because the products left to sell domestically for export are enough for domestic consumption.

This is very similar to that in China at the beginning of reform and opening up. The textile and garment industry is mainly "making clothes for others".

In 2011, Bangladesh overtook India and became the second largest exporter of textile and apparel products after China.

In 2013, the total export volume of textile and clothing increased by 11%, which far exceeded the growth rate of GDP 6%.

From the perspective of industry segmentation, knitted products increased by 10%, woven fabrics increased by 20% and footwear increased by 25%.

In the first half of 2014, exports of textile and clothing maintained a good momentum of growth.

{page_break}

Mixed and sustainable growth and cheap labor force

Of course, the textile and garment industry needs more than just the labor force, and more importantly, the "cheap" labor force. If the minimum wage of Bangladesh is the largest increase compared with other countries, the advantage of "cheap" is obvious because of the low starting point (Table 1).

The minimum wage in Bangladesh is not only very competitive, but also has considerable competitiveness.

Of course, the minimum wage is only for the novice, even in Bangladesh, the wages of skilled workers have reached 120-130 dollars / month.

I am most impressed by Bangladesh's children. The markets run by cars see children everywhere, some are helping adults, some are playing, and many times they see only 5-6 year old children holding their own brothers and sisters.

I asked curiously the accompanying local agent Guide: "is there no compulsory education in Bangladesh?"

"Yes! Bangladesh has the goal of universal education. In addition to public schools, the government even subsidizes some private schools.

The national constitution also provides free education for children and adolescents aged 6-18. "

It was probably my doubts. He added: "in fact, there are quite a lot of schools in Bangladesh, just more than 80 thousand primary schools and 17 thousand secondary schools.

As for these children who do not go to school or preschool children, unlike your golden baby education center in the United States, the so-called "early education" is not popular and the quality is poor.

The enrollment rate of preschool children is only about 10%, but 1/4 was not experienced before primary school.

What's more, the primary and secondary schools are facing the problems of poor education quality, lack of resources, and a large proportion of teachers and students. This leads to a large number of children and adolescents dropping out of school. Almost 6 of students in grade 10% drop out of school, and the proportion of 10 grade students dropping out of school is 70%.

"What is the reason for dropping out?" I asked.

"There are different reasons, but mainly poverty. Boys are more to help adults work," he said, pointing to a boy who was about more than 10 years old, who was passing bricks for adults in the house. "As for girls, many are for early marriage or to help parents do housework."

Ironically, it is precisely such a failed education system that provides Bangladesh with the next generation of sustainable cheap labor.

By contrast, China's single child policy and the tradition of emphasizing education make China's cheap labor quickly lose its sustainability.

No matter whether it is joy or sorrow, the stability of the production base undoubtedly has a lot of benefits to the company's business development. But after a few years and more than ten years, these children will continue to play the role of cheap labor of their parents and older brothers and sisters.

The cost of life for rapid development

In April 24, 2013, a 8 storey building in Bangladesh collapsed on its own, resulting in the death of more than 1100 workers and 3000 people in a garment factory, causing the world's largest similar disaster.

In fact, the day before the accident, the local authorities have issued a notice to close the building and stop using it. Even the radio has reported on the hidden dangers of the building.

A bank and several shopping malls in the building were evacuated from the building as required.

But the proprietor who was lucky enough to take the initiative to ask the workers to go on working for second days, thousands of workers paid the cost of life and blood.

Six months ago, a garment company in Bangladesh, Dhaka, had a fire. Due to the ineffective fire rescue, more than 100 people died and more than 200 people were injured. It is the most serious fire accident in the history of the country.

The garment factory called Tazi Ryan is quite large, with 1600 workers, and many retailers and brands all over the world are processing garments here.

Its building has 9 floors, although there are stairs, there is no emergency access to the factory.

Frequent accidents and unsafe working conditions, coupled with low wages, have become the trigger for frequent labor disputes.

The story of an entrepreneur I know is rather sad: some workers who want to go on strike go to his business to encourage workers to take part in the strike, but because his factory is either of the best working conditions or salary, the workers refuse to take part in the strike.

Unexpectedly, their attitude angered the lobbying workers, who set fire to the factory in a fury.

Fortunately, arson did not cause casualties in the evening, but the work of more than 1800 workers was burned, causing significant economic losses.

Successive accidents have attracted the attention of international organizations and retailers including the United Nations, as well as clothing brands. Europe and the United States have established their own industry alliances.