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Where Made-in-China Textiles Are Emigrating

Southeast Asia’s textile industry pays wages lower than China’s

On a December morning, workers at Top Form International’s newest plant in Cambodia are painting a long line of latrines. Rows of sewing machines sit idle in a dimly lit warehouse, while next door 150 18-year-old women learn how to sew bras on used Singer sewing machines. Chairman Willie Fung has big plans for the factory on Phnom Penh’s outskirts: By the end of 2012, 1,200 workers will produce 80,000 bras a month for sale to the U.S. and Europe. Eventually, this tiny Southeast Asian nation of 14.7 million people could account for one-third of Top Form’s output.

“Cambodia is just like China was 20 years ago. It’s on the verge of a big expansion,” says Fung, a 40-year veteran of the business who may open more factories outside Phnom Penh. Hong Kong-based Top Form, which supplies Vanity Fair, Warnaco Group, and Wacoal, has reduced its China production from 65 percent of total output three years ago to just over 50 percent now. It could drop to just one-third. “In Cambodia, people are happy to have a job,” says Fung. “But in China we keep losing workers. Whether we like it or not, we will be moving out.”