CHEAP, CHEAPER, CHEAPEST

"As costs have risen in China, long the world's shop floor, it is slowly losing work to countries like Bangladesh, Vietnam and Cambodia at least for cheaper, labor-intensive goods like casual clothes, toys and simple electronics that do not necessarily require literate workers and can tolerate unreliable transportation systems and electrical grids. Li Fung, a Hong Kong company that handles sourcing and apparel manufacturing for companies like Wal-Mart, H & M and other Western retailers and brands. Liz Claiborne, reported that its production in Bangladesh jumped 20 percent last year, while China, its biggest supplier, slid 5 percent. Bangladesh is getting very competitive, William Fung, Li Fung's group managing director, told analysts in March. The flow of jobs to poorer countries like Bangladesh started even before recent labor unrest in China led to big pay raises for many factory workers there and before changes in Beijing's currency policy that could also raise the costs of Chinese exports. Now, though, economists expect the migration of China's low-paying jobs to accelerate." (New York Times, 16 July) RD