Langsha Group, China's largest sock manufacturer, temporarily stopped cooperating with Wal-Mart this July because the latter offered unacceptably low prices for purchase orders.
Currently, Chinese sock manufacturers noted that their production costs are soaring. Many EU purchasers have agreed to raise unit prices in purchase orders. Wal-Mart, however, insisted on its previous low offer price, leaving no profit margins for manufacturers. Neither Wal-Mart nor Langsha could compromise on the price issue so they split up. Fortunately, they have reached an agreement recently and Langsha has begun making medium- and high-priced products for Wal-Mart.
According to Cao Xinyu, vice chairman of the China Chamber of Commerce for Import and Export of Textiles, in addition to Langsha there are some other textile companies that surrendered purchase orders from Wal-Mart due to excessively low offering prices. This reflects great progress to improve on the part of Chinese textile companies, Cao added.
For more details, please read the full story in Chinese. (http://www.china-cbn.com/s/n/000004/20071207/020000062373.shtml)
(China.org.cn December 7, 2007)
