Bangladesh could overtake China to become the EU’s largest apparel supplier by 2020, according to a new report from the global business information company Textiles Intelligence. Apparel imports by EU from Bangladesh in 2016 rose in volume for the ninth consecutive year and, as a result, Bangladesh’s share of EU apparel imports from all sources almost doubled over the nine-year period, from 12.2 per cent to 23.4 per cent, according to a report published in www.knittingindustry.com. China, by contrast, suffered further losses in share in the EU apparel import market in 2016. This trend has been apparent for some time now and it seems set to continue as the Chinese apparel industry grapples with problems of rising costs and labour shortages. In 2016 the share of EU apparel imports which came from China fell in volume terms for the sixth consecutive year to 37.9 per cent. In 2010 over half of the volume of EU apparel imports came from China but by 2016 barely a third did so – reflecting a sustained trend by EU buyers towards sourcing from alternative locations. In an attempt to hold on to their market share, Chinese exporters appear to be having to cut prices. In 2016 alone, the average price of EU apparel imports from China fell by a sharp 8.2 per cent. However, a strategy of holding on to market share by cutting prices is unsustainable for a country in which labour costs are rising significantly and shortages of labour are a growing problem. The success of Bangladeshi garment exporters in achieving rapid growth in market share and threatening the dominance of China in the EU apparel market can be attributed to two main factors. One is their ability to export garments to the EU duty-free under the EU’s Generalised Scheme of Preferences (GSP) Everything But Arms (EBA) arrangement.