Bangladesh Relies On Downstream Raw Materials Imported From China

　　 Far away from China's Pearl River Delta“ World factory ”In the South Asian subcontinent, Bangladesh's growing textile industry is trying to challenge its powerful Chinese counterparts.

Over the past decade, many foreign companies, including Chinese manufacturers, have moved into industrial zones such as Gazipur. Jajip is located on the outskirts of Dhaka, the capital of Bangladesh. At present, more than 800 factories have been built from rice fields in the past.

What's the attraction of Bangladesh? Wages were once as low as $24 a month, just a fifth of the monthly salary of many Chinese workers, even though the minimum monthly wage in Bangladesh has been greatly raised to $43 in recent months.

Bangladesh is rapidly becoming part of the global low-end textile and clothing supply chain. In the eyes of the world, this lowland country with a population of 155 million has always been known for seasonal floods and other natural disasters.

Of Bangladesh's total annual exports of 15.6 billion US dollars, spin Products account for 80%. However, compared with China, Bangladesh's share of global clothing exports is still negligible.

Poor infrastructure, frequent power outages, poor port turnover efficiency, and other weak logistics support have hindered Bangladesh's export growth. Labor protests and political instability exacerbate business risks.

Recently, workers in Bangladesh's textile industry have launched violent protests for pay rises, leading to the shutdown of hundreds of factories that work for Western clothing brands such as Wal Mart, M & S and Jesse PANI.

The workers there asked for a three fold pay rise, bringing the monthly wage to $72. To date, most employers have not yet agreed to this condition. If Bangladesh's competitive advantage over China's will be narrowed.

　　 Supply chain advantage

For a country like Bangladesh, it is not easy to catch up with China in low-end manufacturing. One of the reasons is that China has a large and advanced supply chain.

Taking Dongguan in the Pearl River Delta as an example, the idyllic scenery of Xiaoqiao has long been replaced by many interconnected and interdependent factories. Supported by modern roads, ports, airports and railways, these factories form a huge supply chain system. Hong Kong, a financial center not far away, has become the gateway to the supply chain.

In China, despite rising manufacturing costs, powerful industrial clusters that make watches, toys, clothing and electronics are helping the exporting country maintain its industrial competitiveness.

"If you just keep making simple products, you can't compete with countries like Bangladesh or Cambodia," says Henry Tan, chief executive of clothing manufacturer Luen Thai Liantai produces high-end ready-made garments for Ralph Lauren, Adidas and Levis. Its production base in Dongguan is named "supply chain city".

"But we can still make some products here, which are high-end products or products that need high turnover," he said.

For competitors such as Bangladesh and Vietnam, the lack of supply chains has also constrained them by a stronger yuan exchange rate, as many local factories rely heavily on downstream raw materials imported from China.