Why has China’s textile and apparel industry managed to grow against the odds?
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While many industries in China are currently struggling with overcapacity and declining profitability, the textile and apparel industry is experiencing growth in both exports and profits. Customs data show that in the first four months of this year, China’s exports of mechanical and electrical products amounted to 2.39 trillion yuan, a decrease of 2.4%. During the same period, clothing exports amounted to 288.26 billion yuan, representing a 1.7% increase, while textile exports reached 215.2 billion yuan, with a growth rate of 5.1%. According to the Report on the CIIE Industry Prosperity Index for the first quarter of 2016, prepared jointly by institutions such as the China Economic Conditions Monitoring Center under the National Bureau of Statistics, the industries showing rapid profit growth were manufacturing sectors related to consumer upgrading, such as textiles and clothing, as well as furniture manufacturing. In the first quarter of this year, the main business revenue of the apparel industry increased by 6% on a year-on-year basis. Why has China’s textile and apparel industry managed to achieve growth despite adverse conditions? Firstly, Chinese textile and apparel companies place great emphasis on innovation. China boasts the world’s largest textile industry, with its textile production accounting for more than half of the global total. However, the share of textile and apparel products in European and American markets has reached a ceiling, leaving little room for further volume growth; therefore, the focus must shift to offering higher quality products at premium prices. Thanks to innovation driven by all its employees, Guangdong Yida Textile Co., Ltd. has evolved from a traditional textile factory into a high-tech enterprise. Mao Zhigang, director of the Excellent Engineering Department of the company group, said that through extensive use of robots, Inditex employees creatively designed and produced 285 types of small accessories, securing 183 patents. Last year, the company’s sales reached 5.6 billion yuan. Jiang Songyun, general manager of Quanzhou Shanghe Import and Export Trade Co., Ltd., said that a type of sportswear produced by the company is very popular in foreign markets due to its strong sweat-wicking and breathability properties, as well as its thin fabric. “Increasing the technological content of products has become an effective way to enhance competitiveness. ” Currently, many Chinese clothing brands have entered the international mid-to-high-end markets. For example, Jiangnan Bu Yi has opened 38 stores in more than 10 countries and regions such as Japan, France, and Russia ； Posidon is sold in over 400 mid-to-high-end brand boutiques across 8 **. Secondly, the new business models driven by “Internet+” have enabled China’s textile and apparel industry to tap into new opportunities. Xia Lingmin, vice president of the China National Textile and Apparel Council, said that e-commerce is one of the strongest drivers for the development of China’s textile and apparel industry. In 2015, the total value of e-commerce transactions in China’s textile and apparel industry reached 3.7 trillion yuan, a 25% increase compared to the previous year. This represented 20.56% of the total volume of e-commerce transactions across the country, making it once again the largest category for online sales. “The influencer economy is driving changes in the textile and apparel industry. ”Ma Li, a researcher at Galaxy Securities, said that this new business model of turning social media traffic into sales is gradually taking shape. Before mass-producing goods, influencers can gather feedback from their followers to test the market response to different styles of clothing, which will also improve inventory management and reduce waste. Third, China’s textile and apparel industry is allocating domestic and international market resources more flexibly. As a major cotton-producing region in China, Xinjiang is no longer content to serve merely as a raw material base. Since the 12th Five-Year Plan period, it has attracted many domestic textile and apparel companies to shift their operations to the west, thanks to its high-quality cotton resources, favorable policies, and geographical advantages. Last year, the fixed asset investment in Xinjiang’s textile and apparel industry amounted to 31.79 billion yuan, a year-on-year increase of 231%, with more than 380 new textile and apparel enterprises being established. “In recent years, as labor and land costs in China have risen year by year, the textile and apparel manufacturing industry has shifted to locations with lower costs; a significant portion of these locations are found along the Belt and Road Initiative. ”Xia Lingmin said that in this regard, the need for cooperation among the countries along the route is quite strong. “‘The ‘Belt and Road’ initiative provides businesses with excellent opportunities to expand their international operations, seek new breakthroughs, and mitigate risks. ”Wang Tiankai, president of the China National Textile and Apparel Council, said that based on cooperation, countries along the route can promote joint industrial development and achieve structural upgrading. 》》》》Article source: Shanghai Qianshi
While many industries in China are currently struggling with overcapacity and declining profitability, the textile and apparel industry is experiencing growth in both exports and profits. Customs data show that in the first four months of this year, China’s exports of mechanical and electrical products amounted to 2.39 trillion yuan, a decrease of 2.4%. During the same period, clothing exports amounted to 288.26 billion yuan, representing a 1.7% increase, while textile exports reached 215.2 billion yuan, with a growth rate of 5.1%. According to the Report on the CIIE Industry Prosperity Index for the first quarter of 2016, prepared jointly by institutions such as the China Economic Conditions Monitoring Center under the National Bureau of Statistics, the industries showing rapid profit growth were manufacturing sectors related to consumer upgrading, such as textiles and clothing, as well as furniture manufacturing. In the first quarter of this year, the main business revenue of the apparel industry increased by 6% on a year-on-year basis. Why has China’s textile and apparel industry managed to achieve growth despite adverse conditions? Firstly, Chinese textile and apparel companies place great emphasis on innovation. China boasts the world’s largest textile industry, with its textile production accounting for more than half of the global total. However, the share of textile and apparel products in European and American markets has reached a ceiling, leaving little room for further volume growth; therefore, the focus must shift to offering higher quality products at premium prices. Thanks to innovation driven by all its employees, Guangdong Yida Textile Co., Ltd. has evolved from a traditional textile factory into a high-tech enterprise. Mao Zhigang, director of the Excellent Engineering Department of the company group, said that through extensive use of robots, Inditex employees creatively designed and produced 285 types of small accessories, securing 183 patents. Last year, the company’s sales reached 5.6 billion yuan. Jiang Songyun, general manager of Quanzhou Shanghe Import and Export Trade Co., Ltd., said that a type of sportswear produced by the company is very popular in foreign markets due to its strong sweat-wicking and breathability properties, as well as its thin fabric. “Increasing the technological content of products has become an effective way to enhance competitiveness. ” Currently, many Chinese clothing brands have entered the international mid-to-high-end markets. For example, Jiangnan Bu Yi has opened 38 stores in more than 10 countries and regions such as Japan, France, and Russia ； Posidon is sold in over 400 mid-to-high-end brand boutiques across 8 **. Secondly, the new business models driven by “Internet+” have enabled China’s textile and apparel industry to tap into new opportunities. Xia Lingmin, vice president of the China National Textile and Apparel Council, said that e-commerce is one of the strongest drivers for the development of China’s textile and apparel industry. In 2015, the total value of e-commerce transactions in China’s textile and apparel industry reached 3.7 trillion yuan, a 25% increase compared to the previous year. This represented 20.56% of the total volume of e-commerce transactions across the country, making it once again the largest category for online sales. “The influencer economy is driving changes in the textile and apparel industry. ”Ma Li, a researcher at Galaxy Securities, said that this new business model of turning social media traffic into sales is gradually taking shape. Before mass-producing goods, influencers can gather feedback from their followers to test the market response to different styles of clothing, which will also improve inventory management and reduce waste. Third, China’s textile and apparel industry is allocating domestic and international market resources more flexibly. As a major cotton-producing region in China, Xinjiang is no longer content to serve merely as a raw material base. Since the 12th Five-Year Plan period, it has attracted many domestic textile and apparel companies to shift their operations to the west, thanks to its high-quality cotton resources, favorable policies, and geographical advantages. Last year, the fixed asset investment in Xinjiang’s textile and apparel industry amounted to 31.79 billion yuan, a year-on-year increase of 231%, with more than 380 new textile and apparel enterprises being established. “In recent years, as labor and land costs in China have risen year by year, the textile and apparel manufacturing industry has shifted to locations with lower costs; a significant portion of these locations are found along the Belt and Road Initiative. ”Xia Lingmin said that in this regard, the need for cooperation among the countries along the route is quite strong. “‘The ‘Belt and Road’ initiative provides businesses with excellent opportunities to expand their international operations, seek new breakthroughs, and mitigate risks. ”Wang Tiankai, president of the China National Textile and Apparel Council, said that based on cooperation, countries along the route can promote joint industrial development and achieve structural upgrading. Zhan Lingzhi, former chairman of Anhui Huamao Group, said that textile and apparel companies going global as part of the Belt and Road Initiative are driven not only by factors such as domestic market costs, but also by the need for China’s textile and apparel industry to allocate resources more effectively on an international scale in order to grow stronger.