Bloomberg Cites Anonymous Sources
Nomura Holdings' Last Week Prediction Comes True
"China's Export Growth Rate Expected to Drop by Over 1%"
Bloomberg reported on the 10th (local time) that fast fashion company Shein, hit hard by U.S. President Donald Trump's broad tariff policy against China, appears to be shifting part of its supply chain from China to Vietnam.
Sources familiar with the matter told Bloomberg, "Shein is requesting some of its major clothing suppliers in China to establish new production facilities in Vietnam," adding, "As an incentive, they are offering procurement prices up to 30% higher."
Shein plans to support the suppliers through the increased production schedule, including facility construction and the transportation of fabrics from China to Vietnam. These efforts by Shein have been ongoing for several months, with the pace of the relocation accelerating in recent weeks.
President Trump signed an executive order imposing a 10% tariff on China, abolishing the 'de minimis' exemption that had previously applied to small-value goods under $800. As a result, companies like Shein, which feature key products such as $8 T-shirts and $11 dresses, along with other low-priced goods retailers like Temu, are expected to bear the full impact of the tariffs.
However, anonymous sources told Bloomberg, "These incentives apply only during the initial few months of supplier establishment and are not permanent benefits." They also noted, "It is uncertain whether suppliers will reduce existing production capacity in China after setting up factories in Vietnam," adding, "Discussions are currently at an early stage and plans may change."
Shein denied to Bloomberg that the company plans to expand production capacity in Vietnam but did not provide further details.
This aligns with expectations that the U.S. tariff policy against China will negatively affect the Chinese economy. According to Hong Kong media The Standard and others, Nomura Holdings forecasted last week that the new U.S. tariffs would reduce China's overall export growth rate by 1.3 percentage points this year and lower its gross domestic product (GDP) growth rate by 0.2 percentage points.
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