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The time when largest and greatest of production activities
in the areas of Textile were assumed to be in North America
or West Europe is changing since the emergence of China as an
industrialised nation. Referring to the figures of World Trade
Organisation (WTO) China was the fifth largest merchandise exporter,
with US $ 325.6 billion, in 2002. A Chinese public source states
for China to become the world's fourth largest trading nation
this year, following USA, Japan and Germany. The production
and delivery performance in quality, quantity, price, proficiency
and competency are appearing at the level of acceptance in the
variety of textile and clothing products. The share retained
by the developing countries in the international market of textile
and clothing trade prior to Jan 1, 2005, will not be in the
same position in future. The less competitive exporters are
likely to lose the market, or at least, a reduction in export,
provided they are not the preferential exporter through any
other agreement. Identification, addressing and overcoming the
weaknesses in trading, technology, quality, marketing and management
should be addressed prior to 2005, and strengthening the business
relationship with the major international buyers.
The commodity type cotton apparel market is expected to be
dominated by the large producers. The current growth in the
textile and clothing export of China is significant and the
European Apparel and Textile Organisation considers that China
will take over a growing number of developing countries if the
growth rate in import from China continues.
The high number and low cost labour power, domestic policies,
technological growth in manufacturing and processing capacities,
working for improved standards, encouragement to research and
innovation, market control, management initiatives, exploring
and meeting the opportunities are continuously helping the Chinese
exports to dominate markets of Europe, America and Canada. The
textile and clothing exporters from India and Pakistan are from
the main afectees in Asia as a result of the growth of China.
However, factors like the shares taken from others, competing
in the market, setting value chain, product diversity, exploring
the market, domestic policies, trade structural reforms may
safeguard the position of Pakistan and India in competition
with China.
China generally has shown the highest predicted growth. Considering
the capability of China for higher utilization of several quotas,
and the important production capacities, the estimated rise
is 150% in the over all export of textile and clothing export.
This is about half of the world market in post Jan 1, 2005.
This estimation is supported by the evolution of Chinese imports
into European Union (EU) in 2002 (under product the 3rd Stage
of ATC). In 2002, within the specified product categories of
ATC, there is an increase of 53% by value, and 164% by volume.
However, there is a reduction of 42% in unit prices with only
one exception; the European Union imports from all other countries
is almost reducing, therefore the question of looking for competing
countries is insignificant.
The appearance of China on the scene of Global Textile and
Clothing Market is not sudden or by chance, it has a long history
of top executive drives reflected by the measures at public
and private sector levels. The plants working in these sectors
are effectively contributing in country export. For example,
the garment plants owned by state and private sector with associated
production share are shown in Table 1.
Chinese investment in the textile processing and manufacturing
machinery indicates the aggressive rise of China in textile
and clothing market.
France is the 5th largest exporter of textile machinery in
the world. The excellence of French machines is reflected by
export to several developed countries, that are already major
manufacturers, including Germany, Italy, USA, Spain, UK and
Japan. However, China and Hong Kong provide the largest market
(more than 100 million) for French Textile machinery.
The German textile machinery export in 2002 has shown an increase
of 5% over the previous year. China has provided no.1 market
for the German textile machines. It is believed that Chinese
Textile industry invests considerable means and money in expansion
and change. This trend provides continuous improvement in the
product quality alongwith the technological advantage to the
Chinese industry. This results in the controlled and an expanding
market share of textile and clothing product by the suppliers
of China.
In Italy there are 350 companies producing textile machines.
The companies are geared to adapt ever changing market conditions
that enable them to become leader in textile machines production.
These machines are known for the value of production and technological
quality. All these advantages linked with Italian machine technology
are manipulated in China, a major consumer of these machines.
The turnover, in 2002, in the Chinese market was worth of US
$422 million for the Italian machines. However, the other significant
Asian players Korea, Pakistan, Indonesia and Iran are the followers
of China.
Quality should compensate for the price, this is placing the
changing quality demand on priority. It is another indicator
of Chinese textile industry to strive for meeting the market
demands. This idea is guiding the Chinese industry to invest
and upgrade the production technology. A recent textile market
survey from Stork Prints, the world market leader of rotary
screen printing technology, reports over 80% of Chinese respondents
consider the changing quality demand as the most important development
in Chinese textile printing business. Once again, the Chinese
market offers the largest consumption in Asia to Dutch machine
producers. Stork Prints, Vald. Henriksen (manufacturer of atmospheric
and high temperature Jiggers), and Vanwyk (manufacturer of automated
dispensing system), all consider the China as expanding and
principal market for their products. Vald. Henriksen expect
to see a rise from 40% to 75%, and Vanwyk from 10% to 50% in
their total turnover based on the growth of Chinese textile
industry. All this high quality Dutch technology will add to
an already growing textile and clothing business of China.
For the production of quality textiles, the Chinese industry
seems to continue to rely on the European manufacturers. However
the domestic policies coupled with the market demands and an
unlimited number of work force are already the prime attractions
to locate their production units in China. The year 2002 has
shown an increase in sale volume both for the local and foreign
machine manufacturer in China.
Most of the national machine manufacturers, are state-run and
mainly located in Jiangsu and Zhejiang. Over 70% output of national
textile machinery comes from five major state run plants located
in the two provinces. Privately owned and foreign funded plants
are increasingly capturing the market in competition with the
state-run plants. The output variety of textile machines and
accessories of China can be rated as outstanding. The five biggest
textile goods exporting provinces and their production shares
are shown in Table 2.
A significant impact of the growth of Chinese textile sector
is on the textile import of USA. The volume of textile products
in USA market appears huge and diversed with opportunities for
the textile products producing countries. One important segment
of this market is knitted and woven apparel. The apparel market
contains 57.3% woven and 42.7% knitted products. The variety
of knitted and woven apparel is shown in Table 3.
The share of Asian Suppliers in US import market increased
from 52.3% in 2002 to 55.3% in 2003. Two third of it came from
the increased Chinese supplies. However, the increased Chinese
supplies do not necessarily mean an excessive presence in US
market. This is evident by the export decline from 32.2% of
the total to 28.8% of NAFTA and CBI countries, with Mexico facing
two-third of the decline.
How does the increase in Chinese textile export to US Market
is happening? This is something argued between Chinese Textile
Industry Association and American Textile Manufacturer's Institute
(ATMI).
An explanation for the rise of the Chinese textile exports
to US Market is the displacement of products of other countries.
For example, the drop of US imports from Thailand (53.1 %),
and Philippines (49.3%) in the first six months of last year
(2002) is seen as the 12.2% up of textile luggage import from
China by US Market. In addition the US import is limited to
five categories, and there are few makers of the products, in
US, for these categories. Therefore no disruption is induced
by the Chinese products to the US manufacturing industries.
However, such explanation has been challenged by ATMI. A massive
surge is anticipated by American Textile Industry for Chinese
exports to US. US Textile, Fibre and apparel Industry and its
nearly one million workers are on struggle for life or death,
stated by the ATMI. The result of such observations by the representatives
of US Textile Industry has caused curbing measures by US Government
for controlling and limiting the Chinese Textile exports to
USA.
The choice of US foreign traders, sales people and consumers
coupled with the enhanced competitiveness of Chinese textile
products, are the main factors that dominate the in five categories
(knitted fabrics, brassieres, gloves, nightwear and textile
luggage).
The main importing regions of Chinese garments are quota countries,
non-quota countries, Asia, North America and latin America,
and the major importing countries are Japan (27.7 %), Hong Kong
(18.9 %), USA (10.5 %), Korea (5.1 %) and Australia (3.3 %).
The rise in the export of finished textile and clothing products
has caused an expanded consumption of chemicals. This would
result in an increased chemical industry in China as projected
in five year plan. The 10th five year plan for the PR of China,
estimated that China's chemical industry would increase at an
annual rate of 6-7%. In 2002, China imported 47 % more inorganic
raw materials, and 19% more organic raw materials than in 2001.
The growth of textile trade (excluding clothing and accessories)
of China at the Global scene is significantly reflected with
all the main importing countries between 2002-2003. The relevant
percentage rise and capital volume (US $ million) are shown
in Table 4.
The figure pertaining to the Chinese growth appearing at the
global industrial trade and service scene since the last one
decade, are the result of measures and reforms, both at private
and public level, over the period of several past decades. Most
importantly these are geared by continuous drive and will power.
There are several areas in the field of textile and clothing
industry and trade of China that can be taken as model for developing
countries.
There are several guidelines that can be drawn from the growth
of Chinese textile industry, its competitiveness and volume
of export for the textile sector of Pakistan. These include
the following:
· Performance oriented infra-structure in public and
private sectors
· Domestic policies
· Facilities, encouragement and security to foreign investment
· Low-cost labour force
· Skilled manpower
· Efficiency of manufacturing Plants
· Public Initiatives and reforms
· Investment in research, training and innovation
· Development of industrial Zones / Cities/complexes
· Drive for the technologically competitive industries
· Partnership and ventures with reknown companies for
research, manufacturing, training etc.
· Advanced academic programmes in most desired areas
of science, technology and engineering.
However, the incentives, amenities, regulatory and controlling
public measures, and conducive work environment etc., created
in China for setting-up industrial zone, attracting foreign
investors and manufacturers, investment in high-tech and improved
production machines and technology are all the factors to play
a model role in vitalizing the textile sector of Pakistan. Learning
from the experience of others has several advantages, including
less cost and effort consumption.
References:
1. Textile Asia, June 2003, Ps 13-15, 23-33, 64-70.
2. The Daily Dawn, Karachi, Sunday, December 07, 2003. P-10.
3. Ian Holme, International Dyer, August 2003, P-28.
4. International Dyer, August 2003, P-4.
5. International Textile Bulletin, May 2/2003 P-8
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