West and East lose out as China grows its market share

New trend emerges in garment sector JOY ORLEK CHINA’S METEORIC rise has created economic challenges not only for traditional Western trading nations, but for its Asian neighbours as well. Taiwan in particular has lost market share as the Chinese dragon cuts a swathe through world markets. “Our overall import volumes haven’t grown dramatically – we’re moving more and more from China at the expense of other regions in the world and in Asia,” UPS Supply Chain Solutions director Thore Saether told FTW. But change is clearly the only constant in world trade, and just as UPS was adjusting its markets to cater for the Chinese onslaught, particularly in the garment manufacturing sector, a new trend has emerged. “We’ve found that a surprising amount of garment manufacturing has returned to southern Africa,” he said. “There’s been a 30% increase in volumes this year over what we were moving last year.” Good news indeed, but unlikely to be sustainable. “It implies that there were problems of quality or production in China. But once China has the capacity to handle the volumes, it’s likely to win the business back because ultimately a lot of decisions are based on cost.” There’s been little change in the product mix moving on the route, with electrical goods, high value luxury items, healthcare items and limited processed foodstuffs all holding their own. “We’re still doing a lot of heavy machinery from Italy and Germany, but give it a few years and this too could change.” UPS has responded to the growth by opening up a huge number of offices in China, says Saether. “We’re opening up as China is opening up.” And that’s at a rapid rate. “One of the big benefits of doing business with China is that it’s incredibly user-friendly. They make it easier to do business than any country I’ve ever dealt with in my 25 years in the industry. “It’s like looking at a modern version of Chicago or a hi-tech version of London. They all speak English, there is a passion for business and they have a highly developed work ethic.” Add to that the government’s commitment to build an efficient infrastructure to support this rapid growth, and the sky is the limit.