In light of the EU and US' limits on Chinese textiles the Chinese government adopts a proactive attitude and reached a consensus with the EU on the textile issue. The second round of talks with the US is under intense preparation. However the situation may develop Chinese textile firms must answer these questions - how to secure a footing in the midst of the increasingly fierce global industrial competition? How to respond to and cope with the various trade barriers calmly and rationally?
Optimizing industrial structure - increasing added value is of basic importance
Taibote is a garment brand for American professional females. The fabrics it uses are imported mostly from China with its T-shirts being sold at $38 apiece at Taibote stores, while the price (freight included) of the semi-finished Chinese imports is $1.41 apiece. The profits of Chinese textile firms are meager.
After experiencing one trade friction after another the Chinese textile companies have waken to the fact and are committing themselves to industrial upgrading, raising production efficiency as well as the development and manufacturing of products of high added value. Mr. Chen with
Shenzhen Diye Knitters Co., Ltd. said although the company's production of T-shirts has been affected by the limits it is not worried too much. As early as a few years ago the company has made preparation to handle international risks. It carried out industrial upgrading and diversified business. Sixty percent of the company's exports are children clothes and baby clothes. These are not under the limits.
Zhang Landi, senior international business executive, said from a global perspective the various links of textile products such as the fabric and design used as well as their production and marketing have shown new developments. Booming demand for up-market end products encourages the constant increase of high-tech content in the manufacture of fabrics. The Chinese textile firms should conform to the global trend, continue to increase input in soft technologies such as product design and development, raise added value and form a new textile export pattern that is backed by technology, based on products and wins with quality.
Brand-building - raising brand competitiveness is the key
Among Chinese textile export companies many are engaged in Original Equipment Manufacture (OEM), which means their products, once finished, are exported bearing a certain EU and US name. With the brand the profits increase several times and no trace of the Chinese textile firm remains. In another word, except for the meager profits sandwiched by distributors and raw material suppliers Chinese textile firms are left with nothing. When the product has no brand advantage the room for profits is rather small. In this case the product will be highly vulnerable to risks brought about by policy changes such as tariff increase and special safeguard measures.
To shake off the passive situation of being controlled by others the Chinese textile firms, apart from insisting on price advantage, should do more to create own brands, establish brand advantage and realize the transition from OEM to independently owned brands.
The textile industry in
Dalian has for years pursued an export strategy relying on high quality and forged an export situation in which
Dalian textiles have a ready market in the ROK. When the EU and US released restriction policies the
Dalian Association of Clothing Industry and large numbers of garment export companies reached another consensus - to vigorously forge the concept of "Dalian-made" and to eventually realize the goal of making "Dalian-made" a brand representing high quality in the international textile market.
Going global - market diversification is an effective way
Some textile companies that have overseas production bases were not worried on hearing the imposition of restrictions by the EU and US.
These companies are divided into two kinds. The first set up their plants in the targeted market, making it easy to surmount any trade barriers the EU and US may lay down. The second invest in a third country which produces raw material and where labor is cheap. Making use of the advantage in some countries where labor is even cheaper than in China and trade barriers laid down by the US and EU are fewer, they develop China's textile industry. The plant set up by
Tianjin Textile Import and Export (Group) Corporation in Saipan has had orders full for the next two or three months.
Perfecting early warning mechanism - enhancing anti-dumping personnel training is a prerequisite
Compared with China's flourishing textile industry the EU and US textiles are not competitive and their prices are not comparable to those of Chinese products. The prices have provided them with pretext to launched anti-dumping investigations on Chinese products. If the Chinese textile firms either fail to respond promptly or cope with inappropriately they will fall victim to them.
Zhang Jinsheng, director of
Shenzhen WTO Affairs Center, believes that companies should pay enough attention to relevant early warning information released by the government departments.
Shenzhen WTO Affairs Center has issued industrial early warning information regarding the EU and US' launch of protection restrictions early in October last year through textile industrial associations and garment trade associations.
To compete successfully in the international market, paying attention to relevant early warning information is an important guarantee for the textile firms. Only by vigorously training anti-dumping personnel, perfecting anti-dumping early warning mechanism, paying attention to early warning information and evolving highly sensitive detection ability can they have the initiative in a crisis.
