“The future will see China disrupt the world” said Li & Fung’s chairman Dr William Fung at today’s World Retail Congress in Paris.
Fung told the audience that from 1979 to 2009 China has subsidised the price of the world’s consumer goods. He said: “For 30 years people like us enjoyed very good margins as production costs were so low.”
Fung highlighted that the increase of wages in China will now see the migration of manufacturing away from the country.
“We are seeing the second phase of China development and India is coming right behind it,” he said.
Fung also discussed the impact of Bangladesh and told the audience there has been a change in consumer behaviour. He said: “In the old days consumers asked ‘how much, what’s the quality and should I buy it?’ Now they are asking how is it made - is the process safe, are the workers paid minimum wage, is the production health and safety compliant. The world will no longer accept a business that is not compliant.”