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Two Sides of China's Coin

The Communist regime guiding China's red-hot economy and its 1.3 billion people onto the world stage has had to take the good with the bad over the last year. And fashion companies, increasingly vested in the country's fortunes, are forced to ride the...

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Chinese president Hu Jintao.

Photo By WWD Staff

Appeared In
Special Issue
WWD Year In Fashion issue 2007/12/11
The Communist regime guiding China's red-hot economy and its 1.3 billion people onto the world stage has had to take the good with the bad over the last year. And fashion companies, increasingly vested in the country's fortunes, are forced to ride the economic and political currents.

The China that prized uniformity under Mao has become a study in contrasts. Masses of rural poor migrate to coastal cites to work in sometimes laxly regulated factories that churn out $22.7 billion worth of U.S.-destined apparel annually. They provide a steady stream of low-cost fashions to Americans and fuel a Chinese economic machine that has turned out a newly rich few who, with a growing taste for fine things, make up a luxe market of enormous potential.


View the full coverage of  WWD Year in Fashion 2007 at www.wwd.com/yearfashion07

Given double-digit economic growth, a higher profile with the Olympics in Beijing next year, ongoing product safety and environmental concerns and continued political friction with the U.S., China should continue to present both challenges and opportunities for the fashion industry in the years ahead. Here are a couple of takes on 2007.

THE BAD NEWS

A flood of safety concerns and recalls, from tainted pet foods and toothpaste to toys made toxic with lead paint, struck at the heart of the Made in China label this year.

But shoppers, while avoiding some products, did not retreat en masse from Chinese-made goods — a good thing for brands, since a third of all U.S. apparel imports originate in the Middle Kingdom.

The issue, which led to high-level reviews in Washington and Beijing and calls for new regulations, served as a warning for fashion companies busy reorganizing their global supply chains.

After the safety issue surfaced, as well as an increased emphasis on the environment, companies began looking at how they could better control their supply chains -—which might all add up to increased costs.

"You have to honor and reward suppliers that have the know-how, that have the knowledge level and have the resources to do the right thing," said John Eapen, chairman of the American Apparel & Footwear Association's environmental task force.
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