Early this year, there was a decline in orders from garment-exporting countries in Asia that were hit by quota elimination.

In contrast, knitted fabric suppliers enjoyed healthy domestic sales as demand from local apparel companies increased significantly.

However, safeguards imposed by the US and the EU are now limiting exports of some China-made knitted apparel categories to these markets.

For this reason, knitted fabric makers in China are again looking at overseas markets to boost sales. But with a large number of suppliers competing to ship fabric to garmentexporting countries, many companies are now eyeing the more lucrative EU market.

While the US is also an option for suppliers, a looming safeguard on China-made knitted fabric has pushed more companies to focus on the EU instead.

Low prices are still the major advantage of China-made knits. To complement the industry's attractive prices, makers are improving the quality of their low-end and midrange products through equipment upgrades. Many companies are purchasing new equipment that operates at maximum efficiency but consumes less energy and occupies less floor space.

High-speed tricot machines from Karl Mayer and universal tricot machines from LIBA are popular purchases. These machines are able to generate either larger volumes or wider varieties of fabric.

Systems that produce more designs save on cost and factory space, and companies would not need to buy a separate machine for each particular type of fabric.

Larger makers are also boosting R&D capability to offer more models that cater to the high end. Many new releases from these companies are made of environment-friendly but high-performance fiber such as modal, Tencel, bamboo, soybean and Ingeo. These types of fiber are all derived from renewable sources.

Functional knitted fabric is also becoming a staple at most companies, regardless of their size or business type.

Most suppliers increased prices by up to 10 percent in 2005, due mainly to the rising cost of synthetic yarn. Export prices are expected to rise further in coming months as the cost of synthetic materials continues to rise.

Industry composition
China is the world's largest producer of knitted fabric, exporting close to 800 million kilograms in 2004. Exports topped US$3 billion, accounting for roughly one-third of global sales.

The country is home to about 2,700 suppliers engaged in the manufacture and export of knitted fabric. Most makers are small or midsize, with 95 percent having less than 500 employees each.

About one-third of China's suppliers have direct export capability, and the rest ship products through trading companies.

Eighty percent of the suppliers are locally owned companies, some of which used to be state-owned enterprises. Only about 3 percent of these remain SOEs.

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