A deepening economic malaise is forcing companies in Jinjiang of China to reinvent themselves to survive, which forces many manufacturers to close down their units. “I’m considering moving to Bangladesh,” said Lin Genghuang, a Jinjiang native who owns a shoe factory. Jinjiang used to be a manufacturing boomtown, a place making shoes and garments for American and European supermarket shelves. But these days, the city on China’s southeast coast, like many of its manufacturing bases, is losing its edge because of rising wages and lack of product innovation. “Business is barely holding up here”, Lin told the Chinese news agency Xinhua. “The company’s export volume is still climbing, but rising wages, the appreciation of the yuan and intense price competition are squeezing the already paper-thin profit margin”. Since its joining in World Trade Organization in 2001, cheap labor has fueled its export boom and powered the economy to become the world’s second largest. Now China’s manufacturing sector is running into problems these days: squeezed from one end by markets with even lower labor costs, such as Vietnam and Malaysia, and yet struggling to move to a higher value chain because of intensified competition from developed nations. As Chinese manufacturing faces rising wages and lack of product innovation, a window of opportunity has opened for Bangladesh to enlarge its export base globally with its low labourer costs, now the lowest in global markets. Businesses with supply chains and operations in Burma, Bangladesh and Cambodia are benefiting from the world’s lowest labour costs, according to a new global ranking conducted by Risk analytics company Verisk Maplecroft. Bangladesh can explore the opportunity through addressing the issues properly, local manufacturers say. Bangladeshi manufacturers say they are now seeing bright prospects for increased earnings from exports of various goods like particularly in the leather sector after the readymade garment industry because of a policy change in China, the world’s largest economy. “Bangladesh to be an attractive destination for leather sector entrepreneurs as China, the world’s largest footwear manufacturer, is shifting focus away from this sector”, a leading exporter of foot wear goods told the daily. Bangladesh’s annual $550-million footwear industry may grow to a $15-billion sector within a few years, if the opportunity is seized. Leather sector businessmen say foreign entrepreneurs are interested in Bangladesh’s footwear, thanks to the availability of raw hide, processing infrastructure, low labour cost, and a slew of government incentives including duty-free machinery imports. China’s annual leather footwear production had dropped by more than 7.45 per cent in 2014. According to the Export Promotion Bureau (EPB), Bangladesh earned $ 1.29 billion from exports of leather, leather goods and footwear in the 2013-14 fiscal. The amount accounts for 4.2 percent of the country’s total exports. Footwear alone fetched $550 million in foreign exchange of the leather sector’s total export earnings. Leather Goods and Footwear Manufacturers and Exporters Association (LGFMEA) President Syed Nasim Manjur said China, the world’s largest footwear manufacturer, is now withdrawing from the global market. “At least 51 foreign companies had already expressed interest in establishing joint-venture footwear units in Bangladesh. And we are ready with huge potentials to attract foreign investments in the sector,” he recently told a news agency. Bangladeshi manufacturers are planning to fill the vacuum in the international footwear market being left by China, he noted. Vietnam and Brazil, three big manufacturers of leather footwear, were cutting down on this sector. So, a window of opportunity has opened for Bangladesh to expand its export earning and attract foreign investments in this sector after readymade garments, manufacturers say.
