**Abstract**
Since last year, customers purchasing Vanke Eslite shirts have noticed a change on the label — it no longer simply says “Made in China,†but now reads “Made in Bangladesh.†These garments are produced by Nantong Xingao Printing and Dyeing Co., Ltd., which has established a factory in Bangladesh. The company has been expanding its operations overseas for several years, and this shift is part of a broader trend.
This is not an isolated case. As labor costs in China rise, along with the appreciation of the yuan and increasing raw material prices, the traditional advantages of “Made in China†are gradually fading. Once the global manufacturing hub, China has seen many foreign manufacturers relocate their operations to other countries. While some companies remain, others are seeking more cost-effective alternatives.
Apple’s recent decision to build a production line in the U.S. reflects this trend. Although former CEO Steve Jobs once claimed that iPhone production would never return to the U.S., the company has now committed hundreds of millions of dollars to domestic manufacturing. This signals a growing movement among multinational corporations to re-evaluate their supply chains.
Historically, manufacturing has shifted from Europe to the U.S., then to Japan and South Korea, and finally to emerging economies like China. According to Liu Jiejiao from the Chinese Academy of Social Sciences, rising costs and industrial relocation are natural processes. “It’s inevitable,†he said.
**Rising Labor Costs**
Last summer, Adidas announced the closure of its only factory in China and ended contracts with ten suppliers, sparking discussions about the future of “Made in China.†The company explained that the move was aimed at streamlining procurement and achieving greater efficiency. Despite this, Adidas still sources 40% of its global products from China.
However, labor costs in China have become a concern for foreign firms. In Suzhou, Adidas workers earned over 3,000 RMB per month, while wages in Cambodia were just $130 — less than a third of that. According to a survey by the American Chamber of Commerce in China, 47% of respondents identified rising labor costs as the biggest risk to their operations. Many companies are now considering moving to countries like Cambodia, Bangladesh, and Vietnam.
Adidas acknowledged the challenges posed by rising costs, stating that they continuously review their sourcing strategies. “While labor and material costs are important factors, we’re always looking for ways to reduce input costs,†the company said.
**Anglo-American Revelation**
The phenomenon of “industry hollowing out†is not new. Both the UK and the U.S. have faced similar issues, with manufacturing jobs moving overseas over the years. Now, both nations are working to bring some of these industries back.
In 2013, British food producer Symington planned to move noodle production from Guangzhou back to Leeds, creating local jobs. Similarly, British clothing brands like TopShop and River Island have brought some production home. The trend of “re-shoring†has gained attention, especially as companies seek better control over supply chains and higher quality standards.
Liu Jiejiao noted that even though China’s textile industry is advanced, it still struggles to meet the high quality standards required by British markets. “Chinese manufacturing may be efficient, but it doesn’t always match the precision needed for certain specialized tasks,†he said.
**Chinese Manufacturing Worries**
Liu Jiejiao warns that within the next 20 years, China may face a large-scale shift in manufacturing. As per capita income rises, fewer people will be willing to work in low-wage jobs, and production costs will increase. He also highlights non-labor-related concerns, such as corruption and trade tensions with Western countries.
Some companies fear that “Made in China†could lead to increased trade barriers, prompting them to look elsewhere. “This requires stronger international cooperation to ensure a fairer trading environment,†Liu added.
However, not all manufacturing moves equate to “industry hollowing out.†Liu emphasized that while some parts of the supply chain may shift, core technologies and high-value segments can remain in China. The U.S. serves as a good example: despite a decline in manufacturing jobs, it has maintained control over high-end production.
“China must focus on retaining key sectors to avoid hollowing out,†Liu concluded. By investing in innovation and maintaining a competitive edge, the country can continue to play a vital role in the global economy.
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