Sunday, 29 November 2009

The Big Issues right now

Here's the big stories in the latest Source

Chinese and Vietnamese unions start to flex their muscles
Routine worker disputes at a Chinese Triumph lingerie factory and at apparel factories in Haiphong seem to be showing growing normalisation of industrial relations in two countries with a reputation for discouraging union activity, after a period when jobloss fears had been discouraging strikes.

"Cotton shortage" fears in most producer nations.
Reduced cotton acreage is pushing cotton prices up. Prices to Chinese domestic customers are being kept stable as its government releases strategic reserves - but businesses are waiting for decisions on cotton import quotas. Brazil - the world's fifth largest producer - looks likely to import cotton too. Governments in India and Pakistan react differently to pressures for cotton export bans.

Vietnamese child labour allegations

Serious allegations about child labour throughout the apparel subcontracting industry, especially in Hanoi and Saigon, are made by Vietnamese investigators. And the Vietnamese government accepts the allegations are true. The Uzbek government, unsurprisingly, still denies it's using forced child labour in its cotton fields

Problem countries emerge

Botswana's largest garment factory closes. Madagascar faces serious threats to its duty-free access to the US. Kenya frets about its long-term ability to compete. And a raft of countries see sales falling so fast their garment industry's log-term future has to be at risk

Mixed news on trade rules

EU looks more likely to drop anti-China shoe duties. The withdrawal of Sri Lankan duty-free concession looks inevitable - but will not be effective till June 2010, and it is unclear whether its government will honour its 2008 promise to subsidise export prices to compensate for the concession loss. US legislators seem to lose interest in full duty-free access for Bangladesh and Cambodia - but support looks stronger for limited access.

Politicians step up interference

Ethiopia's opposition party attacks US company's selection of an Ethiopian supplier. Cambodian opposition urges caution over buying garments from Cambodia. And Honduran politicians still fail to settle differences.

"Yuan appreciation" expectation droops as China's share reaches record high

As China's share of US garment imports hit an all-time record, hopes grew - both among US textile makers and among non-Chinese garment manufacturers - that China would start to let the value of its currency appreciate. These hopes proved ill-founded, leading to fears that pressure for other anti-Chinese sanctions would build up

Survivor businesses adopt different strategies

An analysis of garment and textile businesses in China shows that most larger, quoted, companies have seen profits improve in 2009. But they adopted a range of strategies - often involving diversification out of garments and textiles - to achieve this. There are growing signs too of India's larger, quoted, companies expanding and stepping up hiring. But in many cases, this is at the expense of debt levels rising - and analysts are switching their fears about Indian businesses away from falling sales to concerns about their ability to manage debt

...and labour shortages still abound

Almost every month we report, with mild astonishment, a new country that's short of labour. In Vietnam, the same problems remain: wages in the big cities are just too low to attract anyone to move, while there simply are not enough people near the provincial industrial estates where jobs are being created. But now Malaysian garment factories are short of workers, though sales are flat. And even North Korea can't find enough people.