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Walmart’s supplier says Chinese factories in ‘desperate’ state

The world’s largest supplier of consumer goods says China’s factories are getting “urgent and desperate” as worried US retailers accelerate a move out of the country amid heightened trade tensions.

China will see more factory shutdowns as the trade war that’s roiled the global supply chain exacerbates an exodus, said Spencer Fung, chief executive officer of Li & Fung Ltd. The company, which designs, sources and transports consumer goods from Asia for some of the world’s biggest retailers including Walmart and Nike, is being pushed by American clients to shift production out of China.

“US clients are definitely very, very worried,” Fung said in an interview with Bloomberg. “Everyone is making razor-thin margins already and most people have a huge percentage in China. So if the biggest source increases the price by 25 per cent, they are worried,” he said, referring to the scale of tariffs threatened on all Chinese imports to the US by President Donald Trump.

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