Textiles and Clothing in China: Competitive Threat or Investment Opportunity?
A Textiles Intelligence research report on China's textile and clothing industry, its exports, its consumer market and foreign investment
China's textile and clothing industry has grown rapidly to become one of the leading suppliers of textile and clothing imports to US and West European markets, and there is still huge potential for further growth. China itself is becoming a consumer society, and its own domestic market is mushrooming as demand for high quality Western clothing increases. This Textiles Intelligence report, at 353 pages the largest of the regional studies in this section, looks at trends in China's imports and exports in the light of trade liberalisation, tariff cuts and the phasing out of quotas. It also examines the prospects and identifies opportunities and potential pitfalls for foreign partners who wish to embark on joint ventures with Chinese enterprises, to gain a foothold in the markets of the world's most highly populated country.
An Industry of Continental Scale
The report opens with China's economic and political background, then maps the structure of the industry: its development, size and organisation, employment, manufacturing by region, rural textile enterprises, and the industry sector by sector. Company-level detail grounds the survey in named examples, including profiles of Handan No 4 Cotton Mill and Ngai Tat (Shenzhen) Garments. A chapter on the changing role of government trade corporations follows the administrative restructuring of the industry, decentralisation of decision making, the role of the China National Textile Council and textile education — essential context for any foreign partner used to dealing with a purely commercial industry.
Production and consumption are analysed fibre by fibre: natural versus man-made fibres, cotton, man-made fibres, wool, silk, cashmere, ramie, flax and linen, jute, angora rabbit hair and fur fabric, with consumption per head by fibre type. A separate chapter covers China's textile machinery industry — efforts to update it, the equipment produced, loom manufacturing, joint ventures and machinery imports and exports.
Exports, Quotas and the World Trading System
International competitiveness is examined through labour costs and competition from other Asian countries. China's fibre, textile and clothing exports are tracked by trend, market and product, alongside quotas, quota evasion and transshipment, barriers to export growth and the factors favouring it. China's position in the world trading system receives its own chapter: China and the Multi-Fibre Arrangement, the USA-China and EU-China bilateral textiles agreements, the MFA phase-out and the GATT Uruguay Round, and China and the World Trade Organisation. Two appendices support the analysis — quotas restricting Chinese textile and clothing exports to the EU and US markets, and selected Sino-foreign textile, garment and related projects.
China as a Market, and Investing in China
The report gives equal weight to China as a destination. One chapter covers China as a market for foreign suppliers of fibres, textiles and clothing: imports by product and source, and government import policy. Another covers investing in the industry itself: sources of foreign investment, advantages and disadvantages, investment priorities and incentives, tax rates for foreign-funded enterprises, manufacturing in the economic zones, projects funded by the World Bank, UNIDO and other development organisations, how to approach the Chinese market, choosing a joint venture partner, and the international banks and law firms in China.
Regional perspectives complete the picture. Hong Kong's links with China — Hong Kong as a gateway, its investment in China, Sino-Hong Kong joint ventures and China as a market for Hong Kong brands — are treated in depth, as are Chinese inward investment from South Korea, Singapore and Taiwan, European and US investment in Chinese manufacturing and retailing, Japanese investment, and growing cross-border trade with the Commonwealth of Independent States. The closing chapters turn to the Chinese consumer market — foreign involvement in retailing, purchase criteria, consumer expenditure on clothing and the market for denim jeans — and to future prospects: China to 2000, modernisation, labour costs, income and consumer demand, opportunities for inward investors and the problems facing foreign enterprises.
Common Questions
What question does the China report set out to answer?
Whether China's textile and clothing industry is best understood as a competitive threat or an investment opportunity: it examines China as a leading supplier to US and West European markets, as a rapidly growing consumer market in its own right, and as a destination for foreign joint ventures.
Which fibres does the report analyse for China?
Cotton, man-made fibres, wool, silk, cashmere, ramie, flax and linen, jute, angora rabbit hair and fur fabric, with production and consumption compared by fibre type and consumption per head.
What practical investment guidance does the report contain?
Investment priorities and incentives, tax rates for foreign-funded enterprises, manufacturing in the economic zones, choosing a joint venture partner, projects funded by the World Bank, UNIDO and other development organisations, and the international banks and law firms in China.