Global supply-chain giant Li & Fung will source less than half of its goods from China this year for the first time in 15 years as the company looks elsewhere amid rising manufacturing costs and the trade war. China accounted for 51 per cent of Li & Fung’s total sourcing business in 2018, down from 54 per cent in 2016, according to chief executive Spencer Fung.
The 113-year-old Hong Kong company supplies apparel, accessories and other products to global retailers. It generates nearly 80 per cent of its revenue from the US for its main supply chain management business.
Chairman William Fung said that Li & Fung had started shifting some of the sourcing from China to Southeast Asian countries such as Vietnam because of cheaper labour costs even before the US-China trade had started. As a result, the company suffered minimal impact from the trade war, he said.