Want to buy cheap Chinese clothes abroad? Less chances than before... If you wish to buy a Led- hors (a Chinese clothing manufacturer based in Quanzhou, Fujian Province) shirt in London, you would find its price has been raised by over 20% this year. Or buy a Mengdiqiu (another Chinese clothing manufacturer based in Shishi, Fujian Province) casual trousers in New York? It could be twice as much as you expected, as its factory price this year is already 25 dollars for each pair of trousers.According to China’s Ministry of Commerce (MOC), in July, the average export price of textiles and apparel increased by 24.7%, merely 0.9% growth in volume however; the average export price increased 18.5% in shoes and hats, at the same time, the volume number increased by only 1.3%. In general, the average export price of Chinese products had been raised by 10.3% in the first 8 months of this year. Change has come to Made-inChina.Why?Many reports commented constantly soaring cotton and chemical fiber raw material prices, increasing labor costs, and appreciating RMB are the main factors of the surge of Chinese textile and apparel prices. Are there any more reasons behind these increases?“May I suggest you are not only concerned about the influence of the price of cotton or raw materials, but more importantly to ensure that the competitiveness and bargaining power of our enterprises has improved significantly,” said Shen Danyang, spokesman of MOC, to China’s Foreign Trade.“The impression of China-Made products is usually cheap and good, or sometimes cheap but poor quality. In the past, we were more likely to promote the economy and trade growth in size, but now we focus much more on quality, our own brands and price.” Shen further explained. “Our advanced enterprises now have more power to negotiate and decide the price in the international market.”“I think it is attributed to the development of foreign direct investment of China’s manufacturing industry,”said Mei Xinyu, researcher at Chinese Academy of International Trade and Economic Cooperation. “The overseas direct investment of Chinese enterprises, especially in the trade and logistics fields, improved the image of Chinese manufacturing industry in international markets, and also enhanced our ability to negotiate prices for export products. We now have a better price with a stronger voice.” Mei said.Who benefits?“Of course the Chinese own brands will benefit most from the price increase. You can see from the trade structure,”said Shen, “We had much more processing trade in the past, which we often say most profit of the smile curve was taken by foreign companies, and only a small slice of the profit left for Chinese OEMs(Original Equipment Manufacturers). However, we can see more and more general trade nowadays instead of processing trade. In August, we already have over half of general trade in trade pattern structure. That was the first time since January 2009,” he added.In the first eight months of 2011, the general trade volume increased 32.1%, this is 16.3 percentage points higher than that of the processing trade, according to the statistics of China Customs. In the general trade, a lot of raw material processing jobs are done in China; including R D and marketing are all conducted by Chinese enterprises, most of which are small and medium enterprises, which are usually private enterprises. “The enterprises in the general trade, which have their own brands are growing bigger and quicker in the trend of price increase,” Shen was optimistic.Who hurts?With higher price, the orders are more difficult to win from the EU and US however. Many export enterprises are experiencing reduced orders. CITIC Securities’ Research in mid-August showed that, orders for Suzhou export processing enterprises had declined compared with last year. Huatai Securities Research also showed that in Dongguan, export orders suffered an abnormal decline in June and July. The proportion of short term orders grew, increasing business risk. In October 15-17, the first 3 days of the 110th Canton Fair, China’s biggest import and export fair since 1957, the statistics showed that 51.7% of the orders were short-term orders within 3 months, and 35.5% were mid-term orders within 6 months. The future is still unclear.“You’ll find most of our general trade products are sold to new emerging nations and developing countries.” Shen said. And what he said was echoed by the recent Canton Fair. In the first 3 days of the 110th Canton Fair, the statistics showed that over one third of the orders were from Mid-East, India and Vietnam. The increased cost will be finally transferred to the customers.At the same time, as Chinese products price competitiveness is reducing, some labor-intensive manufacturers have moved outside China, such as Vietnam, Bangladesh, Pakistan, Indonesia, and Mexico and other lower cost countries, to seek cheaper cost. Good news for them, but made it more difficult for many Chinese manufacturers. A research report released by United Bank of Switzerland(UBS) this year believes that in the past 2 years, in the U.S. imports of low-end light manufacturing products, Vietnam, Bangladesh and Indonesia are increasing their market share in clothing and footwear, whilst Mexico continues to expand its furniture market.