China is Australia's largest trading partner. These countries have been trading and producing for one another since the age of time. China, Asian leader in clothing manufacturing, was the number one provider for Australia and New Zealand. Recently, we have noticed a shift in our client portfolio as many Australian brands were interested in producing in Portugal. Why ?
Tense relations
Relations between these countries deteriorated after covid-19 crisis.
Indeed, Australia has taken a position in favour of the opening of an international investigation into origins of pandemic. Australia does not align with the measures put in place in China and is not willing to keep on supporting economically.
Impact on textile market?
Textile industry is one of the pillars sectors in Australia. However, shortage of raw materials due to pandemic crisis, supply disruptions and delivery delays have led to an increase in import prices.
This has impacted the textile industry and entire production chain.
Production at a standstill in China
China, the first country to be affected by covid-19, was forced to stop its production for a period of time. As the main supplier of materials in Europe, the textile industry had to redouble its efforts to ensure prosperity of their companies.
Repercussions are such that textile prices have risen considerably in the last two years.
What are the advantages of producing elsewhere for Oceania?
The tension in the China-Australia relationship has an impact on taxes between them. Manufacturing in Portugal is now as attractive as China.
Furthermore, production in Portugal guarantees a more ethical and eco-friendly production.
China is a country where "fast-fashion" is omnipresent and where the quality of products can be reviewed if you do not check on your partner.
From Portugal to Australia, the import tax is only 12%. To any Australian brands, let us know if you are thinking of manufacturing in Portugal. We are here for you !
Source : University of Sydney
Keywords : Australia, China, production, textile industry, prices, pandemic crisis.
