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Cheap China is over, Li & Fung warns

24/03/2011
Specialist Hong Kong-based consumer goods sourcing company Li & Fung has warned that labour shortages will put production costs in China up by 20% and that this marks the end of the era of China driving cheaper consumer goods for the whole world.

Li & Fung announced sales figures of $15.9 billion for 2010 and net profit of $550 million. The company has moved a large proportion of the apparel sourcing it carries out on behalf of big-name retailers to alternative countries, but it still sources 57% of its business in China, including, following its acquisition last year of footwear manufacturer Jimlar Corporation, shoes for Coach and Calvin Klein.

On announcing the results, company president, Bruce Rockowitz, said: “This marks the beginning of a new era at Li & Fung, one in which higher prices have brought the industry status quo to an end."


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