The global garment industry is realigning as China moves upmarket and Bangladesh expands its volume-driven basic apparel production.
DHAKA and BEIJING, October 11, 2025 – A significant realignment is underway in the global garment industry, as China, the long-dominant producer, and Bangladesh, the ambitious challenger, navigate a complex relationship of competition and interdependence. This dynamic is redrawing the map of the world's clothing manufacturing.
China: Strategically Moving Up the Value Chain
China is consciously pivoting from high-volume basic apparel to more complex and high-value segments. This shift is driven by rising domestic costs and a strategic focus on technology and branding.
Automation and Efficiency: Facing competition, Chinese manufacturers are heavily investing in automated cutting and sewing to maintain competitiveness in sectors like technical outerwear and high-fashion items where speed-to-market is crucial.
"Guochao" and Brand Building: The success of brands like Li-Ning and Bosideng exemplifies China's push to capture higher margins domestically and globally, moving beyond contract manufacturing.
The "China Plus One" Reality: Many global brands now adopt a "China Plus One" sourcing strategy. While China retains complex orders, it is increasingly ceding market share in basic knitwear and denim to lower-cost producers.
Bangladesh: The Rise of a Manufacturing Giant
Bangladesh has solidified its position as the world's second-largest apparel exporter by capitalizing on its core advantage: competitive labor costs. Its growth, however, brings its own set of challenges and ambitions.
Unmatched Scale in Basics: The country remains the preferred destination for high-volume orders of T-shirts, sweaters, and denim, boasting unparalleled efficiency in these categories.
Compliance and Sustainability Pressures: Following international scrutiny, the sector has made significant strides in factory safety and compliance. There is a growing push to adopt greener manufacturing practices to meet brand demands.
Infrastructure and Diversification: While investments in new ports and energy infrastructure are underway, logistical bottlenecks remain. The industry aims to move into more sophisticated products like formal wear and technical gear to capture higher value.
A Relationship of Fierce Competition and Key Partnership
The competition between the two nations is most evident in the fight for orders from global giants like H&M, Zara, and Walmart. Bangladesh's cost advantage presents a direct challenge to China's low-margin, high-volume producers.
However, the relationship is also deeply symbiotic.
"To view this as a simple takeover is a mistake," says a Global Sourcing Director for a major European retailer. "It's a recalibration. We see Chinese companies themselves investing in Bangladeshi factories. Furthermore, Bangladesh still imports a significant volume of high-quality fabrics, zippers, and trims from China. They are both competitors and client-supplier."
Future Outlook
The trajectory suggests a more defined division of labor. China is poised to focus on automation, innovation, and its domestic brand ecosystem, while Bangladesh will continue to dominate volume-driven basic apparel production. The ultimate outcome is not one replacing the other, but a more specialized—and potentially more resilient—global apparel supply chain.
