China Is About to Change Supply Chains Forever

For the past four years, China has been working on their massively ambitious, and somewhat mysterious, One Belt One Road (OBOR) project, and, according to a recent story from Business of Fashion, the fashion industry could soon be feeling its effects, as major parts are now up and running.

Expected to cost around $1 trillion upon completion, the OBOR “aims to become an interconnected network of ports, roads, railways, air routes and even resource pipelines, ultimately connecting Asia with Europe and East Africa,” and is slated to combine the infrastructure of existing supply chain networks with new developments to navigate a dizzying 7,500 mile route. Amazingly, they’re already running a train between Yiwu and London that can make the trip in just 18 days, passing through seven countries in the process.

Unsurprisingly, the OBOR will have some serious ramifications on the fashion industry, both good and bad.

The good is very good. As BoF notes, “Compared to equivalent sea routes, the Yiwu-London train ride takes half as much time; compared to air travel, railways offer greater volume per journey at a lower price.” Additionally, the carbon footprint of a freight train is drastically lower than that of air travel.

But the bad is pretty bad, depending on who you’re rooting for. First off, according to BoF, China’s president, Xi Jinping, is really gunning for that “role as the new protector of globalization and free trade in the absence of American leadership.”

Second, the OBOR could allow the makers of inexpensive clothing to move their production from China to places like East Africa or Myanmar, where the minimum wages are still incredibly low. One of the main deterrents against doing just that was the logistical nightmare of shipping the goods out of those elsewheres, but, because the OBOR seeks to increase connectivity in hard-to-reach places, that deterrent won’t hold much longer.

Welcome to the New World Order.

You can read more about it at The Business of Fashion.

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