The abiding mysteries of China and India

The first Clothesource Tradetrak for 2013 confirms twoperennial mysteries.

Apart of course from why the EU can never release its trading data as fast as the Americans and Japanese. Which means we can comment sensibly only on what happened in the first two months of the year – because, whereas the Americans, Japanese and Chinese published their trade data for March weeks ago, the Europeans have only just published their February data.

But it’s still good stuff, and shows three completely different sets of trend:

-         -  Japan’s move away from China is gathering pace. In the first quarter of 2013, China accounted for just 80.5% (below 80% in February and March) – down from 92% in 2008

-       -    America’s just not moving from China, however many journalists claim it is. In Quarter 1 of 2013, Chinese imports accounted for 37.7% of US garment imports – the highest Quarter 1 share we’ve ever recorded for China in the US

-       -    China’s share IS slightly down in Europe (40.3% in February, compared with 41.9% the previous year).

But Chinese prices are falling faster in both the US and EU than among garment imports overall.

Meanwhile, India’s share of imports continues to fall in the US and EU (after annual growth in Q4 of 2012 in the US), and is even lower in Japan than it was in 2012.

Indian spokespeople continue to be in denial over this: they pretend Indian garment exports are falling because the US and European markets are themselves falling – or even claim exports are healthy, because they’re selling more yarn to China (true, and an intriguing future Blog itself. But wholly irrelevant to the job prospects of Indian apparel workers.

Understanding China’s continuing competitiveness, as well as India’s lamentable performance in garment (and arguably any kind of) manufacturing, since 2005 are central to the future not just of garment manufacture, but of poor country development.   There isn’t one, simple explanation for either. But commentators would help understanding these two huge conundrums if so many didn’t endlessly keep on asserting China is losing competitiveness, when it patently isn’t.

And Indians might do themselves a few favours if they didn’t keep on asserting India’s dismal performance in manufacturing was all down to sluggish western markets. Those Indians’ solution to the wring problem – sell more to Brazil or the Middle East – is getting India almost nowhere: India’s garment exports are looking dreadful because Indian garment makers just can’t compete with global players.

They’re just as bad at competing with the Chinese or the Indonesians in Brazil as in Germany.  Until they’ve learned that basic lesson, Indians manufacturers – and, which is more important, India’s industrial workers – are going to lag their peers elsewhere in the developing world.

This is why we’ll be returning to these two themes repeatedly over the forthcoming months