President and executive director of Li & Fung, Ltd., Bruce Rockowitz, told audience members at the Reuters Consumer and Retail Summit that he believed that the low-cost era in China was likely over. Rockowitz said China was moving into “an era for higher prices,” citing greater commodities prices and labor costs.
Despite growing costs, Li & Fung will continue half of its production in China, switching to sourcing from China’s cheaper interior to its coastal area as infrastructure in the interior grows with high-speed railways.
Li & Fung said that China would continue to be its biggest sourcing country, followed by Vietnam. Despite China being its biggest sourcing country, Rockowitz said the top 100 retailers only accounted for 10 percent of total domestic retail.