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CHINA'S TEXTILE AND APPAREL INDUSTRY FEELS US PUNITIVE TARIFFS Photo: Pixabay
05.03.2019

CHINA'S TEXTILE AND APPAREL INDUSTRY FEELS US PUNITIVE TARIFFS

  • Nevertheless - automation, environmental compatibility and energy efficiency increase machine imports

China's textile and clothing industry is modernizing. High-quality textile machines are in demand. But because of the trade dispute with the USA, investments are also postponed.

How the trade dispute between the USA and China affects its business is currently being discussed by China's textile and apparel manufacturers - and in particular by the companies located in the high-quality sector: Of the approximately USD 119 billion, that they sold abroad in 2018, about two thirds went to the United States.

  • Nevertheless - automation, environmental compatibility and energy efficiency increase machine imports

China's textile and clothing industry is modernizing. High-quality textile machines are in demand. But because of the trade dispute with the USA, investments are also postponed.

How the trade dispute between the USA and China affects its business is currently being discussed by China's textile and apparel manufacturers - and in particular by the companies located in the high-quality sector: Of the approximately USD 119 billion, that they sold abroad in 2018, about two thirds went to the United States.

According to the American Apparel & Footwear Association (AAFA), 41 percent of the clothing sold in the USA, 72 percent of the shoes and 84 percent of the accessories come from China. On the other hand, the producers of intermediate products or textiles are less or hardly affected by the punitive tariffs, because here the dependence on the USA is not quite as great. Apparel manufacturers in Vietnam and Bangladesh, for example, generally are also buying in China.

Following previous punitive tariffs on Chinese imported goods, in September 2018 the USA imposed a 10 percent punitive tariff on a wide range of other Chinese imported goods, including goods from the textile and clothing industry. On January 1. 2019, the tariffs should originally be raised to 25 percent, but at the beginning of December 2018 US President Trump and China's President Xi agreed not to increase the tariffs until March 1st 2019.

Companies are reluctant to invest
It is hardly possible to make predictions about the outcome of the conflict. In view of the uncertainty, many of the companies affected are therefore waiting for the time being. German textile machine manufacturers are also feeling the effects of this, whether due to lower demand for machines from Germany or locally. According to a representative of the German Engineering Federation (VDMA) in Beijing, many investments have been stopped.

But apart from the upheavals, the modernization process of the Chinese textile and clothing industry is far from complete. Gone are the days when the numerous street markets in China were flooded with cheap clothes. They're hard to find these days. Their manufacturers either had to modernize or have since disappeared from the market.

Number of Chinese textile and clothing companies down sharply
China's textile and clothing industry has been through tough years of consolidation and modernization. In fact, between 2013 and 2017 alone, the number of predominantly private-sector companies in the sector fell by almost 11 percent to around 33,500.

Chinese customers don't want any more junk - and can usually afford better. According to the Chinese National Bureau of Statistics (NBS), they spent about RMB 1,371 billion; equivalent to about USD 207 billion; (1 USD = about 6.6114 RMB, annual mean rate 2018) on clothing and shoes in 2018. This is 8 percent more than in the previous year.

Rising personnel costs force automation
On the one hand, consumer demand has grown and led companies to invest in better machines, on the other hand, the constant pressure on personnel costs has forced them to automate their processes. Between 2010 and 2017, the number of employees in the sector fell from 10.9 million to 7.8 million.

Many have tried (and are trying) to escape the pressure by relocating their companies - for example to the interior of the country, where the wages are lower, or to cheaper foreign countries. However, the great migration movement did not take place, as most of them see themselves too strongly interwoven with their suppliers. Some are also skeptical about the move to the West, arguing that it would only be a temporary solution - and that sooner or later the wages there would follow.

Traditionally, the industry has concentrated on the provinces of Guangdong, Fujian, Zhejiang and Shandong. There, the average gross monthly wages of urban workers rose between 2013 and 2017 (latest available figures) by between 38.9 per cent (Fujian) and 48.5 per cent (Guangdong) - with significantly lower inflation rates.

Development of the Chinese textile and clothing industry 2013 to 2017
(% change over previous year) *)
  2013 2014 2015 2016 2017 Cjamge
Number of companies 37,376 36,642 36,488 35,197 33,326 -5.3
.Textile industry 21,666 20,821 20,545 19,752 18,726 -5.2
.Clothing industry 15,710 15,821 15,943 15,445 14,600 -5.5
Number of employees in 1,000 persons n.a. n.a. 9,140 8,667 7,784 -10.2
.Textile industry n.a. n.a. 4,645 4,362 3,912 -10.3
.Clothing industry n.a. n.a. 4,495 4,305 3,872 -10.1
Turnover in RMB bn. 5,553 5,934 6,222 6,458 5,700 -11.7
.Textile industry 3,608 3,829 3,999 4,084 3,611 -11.6
.Clothing industry 1,945 2,105 2,223 2,374 2,089 -12.0

*) only companies with an annual turnover of more than RMB 20 million are included.
Source: National Bureau of Statistics (NBS)

Environmental legislation and energy efficiency as additional investment drivers
The industry also has to deal with a generally stricter environmental legislation, which increasingly is being implemented. Added to this is the growing importance of the energy efficiency aspect.

Both are good news for German textile machinery manufacturers, according to VDMA estimates. As a result, the market for high-tech machines is expanding and the resulting demand is still far from being met by local production. China imported USD 4.2 billion worth of textile machinery in 2018, an increase of 6.7 percent over the previous year. A further customer potential arises from the growing importance of technical textiles.

According to Chinese customs statistics, German suppliers supplied textile machinery worth USD 1.1 billion to China in 2017 (latest available data) - a whopping 28.3 percent more than in the previous year. Despite this success, however, they had to cede their previous leading position as the main supplier country to Japan. However, this statistic shows only one side of the medal. Almost all well-known manufacturers are now represented in China with their own production facilities - and no figures are available about their activities.

Imports of textile machinery to China by selected countries
(SITC item 724; in US$ million, change from previous year and percentage share)
  2015 2016 2017 Change Share 2017
Total, thereof from 3,354 2,907 3,897 34.1 100.0
.Japan 728 765 1.169 52.8 30.0
.Germany 1,219 851 1.101 29.4 28.3
.Italy 415 347 448 29.1 11.5
.Taiwan 206 187 203 8.6 5.2
.Belgium 134 124 173 4.0 4.4
.Switzerland 104 111 126 13.5 3.2

Sources: UN-Comtrade; Calculations by Germany Trade & Invest

Environmental model companies point the way ahead

Already today there are manufacturers with ambitious plans in environmental protection. One of them is the Dongrong Group. Based in Chifeng, Inner Mongolia, the Cashmere company has been selected by the government of the Autonomous Region, together with a dairy company, as a model company for environmental protection. This included President and owner Cheng Xudong having his company - by the way inspired by the German Pavilion at the World Expo in Shanghai 2008 - sealed energetically (albeit not with materials "Made in Germany").

The next big step will be the purification of the company's own waste water. "Cheng describes his goal as follows: "Fish, suitable for consumption in our canteen, should be able to swim in it. The company is already now growing vegetables for the canteen itself. In his efforts it is financially supported by the state. But certainly not all entrepreneurs are so ambitious.

And there is still an old Chinese saying for many companies: "The sky is high - and the emperor is far away". In other words, what the central government decides in Beijing does not necessarily have to be implemented in the huge hinterland. But all these efforts show in which direction the journey goes.

 

More information:
China USA Tariffs
Source:

Stefanie Schmitt, Germany Trade & Invest www.gtai.de

30.01.2018

TEXTILE AND CLOTHING MANUFACTURERS INVEST IN EGYPT

  • Chinese companies are planning several major projects
  • Germany is supplying more textile and clothing machinery

Several Egyptian and Chinese companies have announced some heavy manufacturing investments in textiles and clothing. The government is committed to creating new production priorities for textiles and wants to increase added value. Labor-intensive industries benefit from the low value of the Egyptian pound for their exports. For textile and clothing machinery, Germany achieved a delivery share of around 20 percent in 2016. In the Egyptian textile and clothing industry, the signs point to expansion and modernization. Local media reported on a series of investment plans by Chinese and Egyptian companies. According to the newspaper Al Gomhouria, a Chinese producer is planning the world's largest textile factory for USD 6 billion in the economic zone on the Suez Canal.

  • Chinese companies are planning several major projects
  • Germany is supplying more textile and clothing machinery

Several Egyptian and Chinese companies have announced some heavy manufacturing investments in textiles and clothing. The government is committed to creating new production priorities for textiles and wants to increase added value. Labor-intensive industries benefit from the low value of the Egyptian pound for their exports. For textile and clothing machinery, Germany achieved a delivery share of around 20 percent in 2016. In the Egyptian textile and clothing industry, the signs point to expansion and modernization. Local media reported on a series of investment plans by Chinese and Egyptian companies. According to the newspaper Al Gomhouria, a Chinese producer is planning the world's largest textile factory for USD 6 billion in the economic zone on the Suez Canal. The Chinese companies TIDA and Shoon Dong Roy want to build a clothing factory for USD 800 million. Sino-Egypt Minkai plans to build a textile industry complex for around USD 750 million. The local paper and stationery manufacturer Mintra plans to start the production of sports shoes with an initial investment of USD 50 million. Manufacturing in the 10th of Ramadan City is scheduled to begin in mid-2018, serving both the domestic and overseas markets. Egypt is still importing about 85 percent of the shoes sold in the country.
Oriental Weavers plans to purchase new production lines, machinery and equipment in 2018. For this purpose, EUR 6 million are to be invested. According to the newspaper Al Shorouk, the expansion will be financed by a bank loan.

State relies on new textile cities and more value added
The Egyptian state also wants to strengthen textile and clothing production. The Ministry of Investment and International Cooperation, the Supreme Council for Textile Industries and an unnamed Chinese partner want to set up a free zone for textile production in Minya. The ministry plans to provide part of the funding through international institutions and create specialized training programs for workers. According to media reports, the project value should be at USD 324 million.

In early 2017 the Egyptian Ministry of Industry announced that it would set up new textile production centers at a total of ten locations. In particular, spinning mills and weaving mills are in the spotlight. This perspective is shared by the Ministry of the Public Sector. It is aimed primarily at increasing value adding and therefore carried out a study in 2017.

Import demand for textile and clothing machinery is expected to increase
Egyptian textile and clothing companies often produce with a lot of manual work and partly outdated machines. On the one hand, the government is keen to ensure that as many jobs as possible are created for the approximately 800,000 young people who enter the market each year. On the other hand, a more automated and modern production of textiles and clothing would enable more complex products. These could be sold at a higher profit, but may also require less human labor.

An Indian company has secured a contract to modernize cotton processing. In compliance with a framework agreement with the Cotton and Textile Industries Holding, Bajaj Clothing automates cotton ginning systems. A total of eleven companies in different parts of the country will be equipped with the new machinery until August 2018. In late December 2017, Egypt Today announced that the government wants to modernize the spinning and weaving mills in Northern Egypt. The investment volume will amount to a total of one billion Euro over a period of five years.

The newly announced projects are expected to increase the demand of import machinery in the near future. Like other types of equipment, the vast majority of textile and clothing machinery will be imported into Egypt. Deliveries from Germany were able to improve both in absolute terms and relatively in 2016, despite an overall shrinking of the volume of imports. The German supply share jumped from 15.8 to 20.4 percent compared to 2015.

Import of textile and clothing machinery into Egypt (in USD  1,000)
HS Category 2015 thereof from Germany 2016 thereof from Germany
8444 1,135 0 4,481 2,025
8445 34,550 10,653 26,105 5,429
8446 18,902 984 23,591 13,346
8447 26,040 5,940 15,713 3,052
8448 23,39 5,158 20,574 3,365
8449 440 0 299 0
8451 34,796 3,335 36,512 2,334
8452 30,456 1,264 23,186 1,698
8453 3,087 5 3,678 137
Summe 173,145 27,339 154,139 31,386

Source: UN Comtrade

The consequences of the release of the Egyptian pound in November 2016 will mainly benefit labor-intensive industries and those that are processing mainly local raw materials. After October 2016, the value of the EURO soared from just under 9 to 21 Egyptian pounds and has stabilized at this level. According to various figures the textile and clothing companies in the country employs between 1.0 and 1.2 million workers. It is reported that state-owned enterprises are strongly represented in the textile sector, while the private sector plays a greater role in the clothing sector.

The advantage is dampened by the import requirements for cotton. In Egypt, especially soft and high-quality long-staple cotton is grown and exported. By contrast, domestic textile and clothing companies mainly use short-staple cotton from abroad as a raw material. Their import as become more expensive due to the currency developments. Nevertheless the competitiveness of Egypt's textile and clothing exporters has improved as a result of the new foreign exchange situation. Their exports should have developed better in 2017 than at the peak of the currency liquidity crisis in the previous year. At that time, exports fell by12.6 percent to around USD 1.7 billion.

Egyptian exports of textiles and clothing
(Selection, in USD millions, Change in %)
HS Category 2015 2016 Change 2016/2015
57 339.8 303.5 -10.7
60 2.0 35.7 1,685.0
61 483.6 388.0 -19.9
62 870.4 756.6 -13.1
63 262.2 227.2 -13.3
Summe 1,958.0 1,711.0 -12.6

Source: UN Comtrade

Increasing labor costs at Asian production sites, long transport routes and sometimes dissatisfaction with the product quality make some customers look for new sources of supply for textile and clothing products. According to a report by the news portal Middle East Eye, Egypt lies at least with USD 100 as a monthly salary for workers roughly equivalent on a level with India or Bangladesh and about half of Chinese salaries. In addition, the country at the Suez Canal is capable of fast deliveries to Europe and the United States. Regional competitors include Turkey and Tunisia. Egyptian manufacturers are not always recognizable as such, as they often manufacture for major international brands. Middle East Eye names Calvin Klein, Decathlon, Tommy Hilfiger and Zara as examples. In November 2017, Dice Sport and Casual Wear agreed to supply Levi Strauss & Co. with children's clothing.

Since 2017, Egypt became part of the Better Work Program of the International Labor Organization. The program includes 30 apparel factories in which the working conditions should be improved. Such confirmations could then give Egyptian products competitive advantages in export. However, to stand up to the tough international price warfare and at the same time to meet by the customers expected production standards will be a challenge.

China's fashion designers are becoming more successful internationally © Martina Böhner/ pixelio.de
04.07.2017

CHINESE FASHION DESIGNERS COMPETE WITH IMPORT CLOTHING

  • Chinese fashion companies are becoming more creative and work on their branding
  • German fashion has a hard time with it

Beijing (GTAI) Chinese fashion has the reputation for being less creative and of poor quality. Well established brands are rare. But this is now changing. More and more local designers succeed in making a name for themselves on a national and an international level. This is why it will be harder for imported clothing to establish itself on the Chinese market in the future. Chinese designers meet the local taste with a mixture of Western and Chinese elements.

  • Chinese fashion companies are becoming more creative and work on their branding
  • German fashion has a hard time with it

Beijing (GTAI) Chinese fashion has the reputation for being less creative and of poor quality. Well established brands are rare. But this is now changing. More and more local designers succeed in making a name for themselves on a national and an international level. This is why it will be harder for imported clothing to establish itself on the Chinese market in the future. Chinese designers meet the local taste with a mixture of Western and Chinese elements.

When it came to buying clothes, Chinese customers had for several decades only two choices - either settle for cheap domestic bulk goods or spend a lot of money on an imported product. First came the luxurious brands, especially from Italy and France, which China's new millionaires adorned themselves with, then more and more shops opened, targeting the ongrowing middle class and in which also German business clothing sold well.

But the local competition does not sleep. The Chinese textile and clothing industry faces a massive financial pressure; therefore many companies have to take a decision; either they become better or they have to go. Anyone who remains has to change his production and his products in such a way that they can meet the more and more demanding customers, especially within the domestic market.

This includes the positioning of own brands. The Dongrong Group from Inner Mongolia is currently following this path. It has become well known for manufacturing cashmere products for famous British and Italian fashion labels, and now sells its own design under its own label ("Dongli") in its own shops.

Owning a store – or even better several stores - is the dream of most young Chinese fashion designers, who are increasingly making a name for themselves on the Chinese market. This is also due to the retail structure in the People’s Republic of China, which is unusual for Germans. The typical German clothing retailers with several brands in the assortment do not exist. Instead, mono-brand stores dominate - either as single stores or in the large malls as sublet retail space.

Nevertheless, Chinese companies have a lot to catch up on branding and quality. Even the familiarity of important Chinese suppliers is usually limited to local buyers. For the majority of European customers, however, they are not even a concept. But according to industry insiders, this is also changing. The number of successful Chinese fashion designers and companies is growing even internationally.

Despite deficits in areas like creativity and branding, the scene is growing and finds an ongrowing customer base. Accordingly, things will become even more difficult for German fashion, which usually cannot compete with the glamour of the Italian or French competition. Although there are more Chinese people who are able to spend a lot for good fashion, but there is also a larger local offer, which is price oriented to foreign markets and meets the Chinese taste with a skillful mix of Western and Chinese traits.    

Chinese Importes of Apparel*)
(in Mio. US$, change in comparison to the previous month in %)

  2014 2015 2016 1st quarter 2017 Change
Clothing and accessories 5,626.1 6,018.0 5,947.5 1,490.8 8.6
from Germany 5.8 6.7 6.2 1.2 -9.8

*) HSPos. 61+62
Source: China Customs; calculation by Germany Trade & Invest

China's fashion designers are becoming more successful internationally

Many of the new Chinese fashion designers have studied abroad, worked and / or cooperated with foreign designers, and now combine typical Chinese with modern Western clothing and cuts. With their designs, they do not only create interest in the relevant fashion weeks abroad, but are also increasingly bought in China. Pioneers are fashion designers like Ma Ke ("Wuyong", "Mixmind"), who designed the clothes for China's elegant First Lady Peng Li-yun, or Paris-based Guo Pei, who was named by the Time Magazine 2016 as one of the 100 most influential people in the world. In the meantime, a large number of fashion designers and designers have made themselves a more or less wellknown name.

Among the new labels are for example the Eve Group from Beijing or ANNDERSTAND (founded by Yu Ge, who gained experience already at Louis Vuitton and Gucci) from Shanghai. With tailor-made models from Yu Ge, the underwear brand AtoG Lingerie (founder: Zhou Yingying) even made it to the fashion weeks in London, New York, Milan and Paris. They are particularly popular among the middle and upper classes. These population groups are often looking for a modern, national identity and would like to dress up individually and elegantly - apart from the unattainable big brands from France or Italy, which nevertheless are already in the Chinese metropolises almost "at every corner”.

Return to old traditions 

For example, exquisite new editions of Chinese sheath dresses (Qipao) aree in demand - such as by HanartQipao from Shanghai. Founder Zhou Zhuguang is convinced: "Qipao is the future and perhaps also the beginning of a Chinese haute-couture." The costs of a Hanart dress range from 3,800 to 60,000 yuan (RMB, circa 570 to 9,030 US $, 1 US $ = circa 6,642 RMB, yearly average 2016). Buyers have often embraced a refined Chinese lifestyle - including tea drinking, reciting poems, and collecting Chinese antiques.

Recalling some decor patterns of national minorities, such as the elaborate embroidery art of the Dong or Miao nationality from southern China, is also popular. In particular, Vimemo (founded in 2009 by Yu Ying) from Guizhou has earned a reputation. Vimemo employs about 3,000 female embroiderers and batik dyeing worker in homework and ensures that techniques, which only a few grandmothers are still proficient in, do not die out. In this sense, a research and development center with a school is to be built in 2017. The very high-priced pieces of silk or cotton are sold in own shops (at the Beijing International Airport, for example) or via the Internet.

The Chinese designer, Su Renli, uses the old techniques of handicrafts (for example, the dyeing of fabrics in yamswurze extract) combined with sustainably produced materials and modern cuts. Other promising brands with an individual style are, for example, Zuczug or Icecle based in Shanghai, some of them partly coming into the market with serious eco-friendly products.

Despite the growing health awareness and promising approaches - such as the recently founded "Uncover" project - sustainable fashion in China has so far only been a niche. Against this background, the company Jiaxing Jiecco ("LangerChen") in Zhejiang, founded by Miranda Chen and Philipp Langer, is producing their fabrics that are mainly certified according to the strict Global Organic Textile Standard (GOTS) primarily for foreign customers. Genuine eco-fashion or fair produced clothing has so far been a concept for the fewest Chinese. "After discussing food safety, the discussion about healthy clothing will follow," Miranda Chen is convinced. But time has not yet come.

Chinese textile and clothing industry © Walter Babiak / pixelio.de
02.02.2016

CHINA'S TEXTILE AND CLOTHING INDUSTRY IS ORIENTATING TOWARDS NEW

  • Creating local branding
  • Gradual relocation towards abroad

Beijing (gtai) - Away from cheap mass production or relocation are the alternatives for the Chinese textile and clothing industry. A domestic "Go-West" does probably not pay off in the long term, the migration however to Southeast Asia has already started. At the same time German quality suppliers expect new sales opportunities if the companies strengthen their competitive position through more quality. This became clear at the last "Intertextile" October 2015 in Shanghai.

  • Creating local branding
  • Gradual relocation towards abroad

Beijing (gtai) - Away from cheap mass production or relocation are the alternatives for the Chinese textile and clothing industry. A domestic "Go-West" does probably not pay off in the long term, the migration however to Southeast Asia has already started. At the same time German quality suppliers expect new sales opportunities if the companies strengthen their competitive position through more quality. This became clear at the last "Intertextile" October 2015 in Shanghai.

The Chinese textile and clothing industry is under massive pressure of costs. Away from cheap mass production or relocation is the need of the hour. Until now the industry is primarily located at the Pearl River and the attached Yangtze River Delta, where wages on average are the highest nationwide. According to the China National Garment Association (CNGA) about 70% of the production volume account for the five provinces of Shandong, Jiangsu, Zhejiang, Fujian and Guangdong.

Supported by the policy is the move to the more favorable central and western provinces. This happens not least to the preservation of local jobs and the development of the far less booming regions of the country. In this sense not only the CNGA endorses the relocation of clothing manufacturers to Xinjiang. In the western province 30% of the cotton of the country is grown, which with 6.2 million tons in 2014 is the largest cotton producing area in the world. After association investments the authorities are planning investments amounting to USD 3.2 billion, amongst other things for the establishment of "Textile Industry Parks".

Another attempt to shift the Chinese textile industry from the coast to the west, represents the Ningxia Ecological Rextile Industrial Demonstration Park, which was opened in December 2014. According to China.org.cn by 2020 here about 50,000 people work should be working there in the textile industry.

"Go West" is not attractive for private textile and clothing companies

To which extent these efforts will be successful remains to be seen. However, said by a Chinese businesswoman, "Go West" at best will be a medium-term solution, because also there sooner or later the wages would rise (not to mention the already there noticeable higher logistics and other costs). If to move, then only to permanently cheaper overseas locations. A migration to Vietnam, Bangladesh or Cambodia is already going on. But the fact is that so far a large displacement wave - at home or abroad - has not yet happened.

That Vietnam and Bangladesh have climbed in a few years to the third and fourth place of the main source countries for the PRC in terms of clothing (Vietnam: USD 587.5 million, Bangladesh: USD 364,7 each in the first ten months of 2015 for HS-Pos. 61 and 62), results very predominantly on already shifted production capacities of Chinese manufacturers. They bring their products from there back to China to sell them here.

Vietnam as a manufacturing site should also gain in the course of the in October 2015 successfully completed negotiations for the Trans-Pacific Partnership (TPP) trade agreement between the US and Vietnam in importance for Chinese enterprises. After coming into effect exports from Vietnam to the United States will be duty-free. In November 2015 for example was to read in China Daily, the Huafeng Co. of Shandong would be planning to build a textile mill in the Southeast Asian neighboring country with an investment of 700 million Renminbi (RMB - approximately 110 million USD, 1 USD= 0,157 RMB, the average rate as of November 2015).

Cambodia does not play in the foremost league yet, but pushes with power forward: During the named period, imports of knitted and crocheted clothing rose by 38.1% to USD 124.8 million (HS-Pos. 61) and other clothes (HS-Pos. 62) by 18.4% to USD 32.3 million.

However, for the relocation certain limits are set as the target countries often reach their capacity limits. Considered has to be the in China existing extremely advantageous integration of the various stages from cotton growing over the wide textile processing up to the final cutting and sewing of clothing.

Superiority in quality rather than relocation

Instead on a further relocation innovative companies and designers rely on an upgrading of their products. The aim is to serve more demanding customers in the Chinese market - and to position themselves abroad. To these belongs the fashion designer Ma Ke, who designs clothes for China's First Lady Peng Liyuan, or Guo Pei, who caused stir with her creation for the singer Rihanna at the Met Gala 2015 in New York.

Apart from individual stars of the scene also increasingly large companies such as the down jacket specialist Bosideng or the men’s wear designer Mark Fairwhale and Ningbo PeaceBird move away from pure volume production towards brand building and quality. Bosideng has even opened its own flagship store in London. The awareness of important Chinese brands such Heilan Home or Metersbonwe is still limited to local customers, for the majority of European buyers they are not a concept. But according to sector insiders this is likely to change, step by step.

Market share of the 10 most important suppliers for men’s wear in China 2014
Brand Country of origin Market share (in %)
Heilan Home PR China 2.9
Jack & Jones (Bestseller) Denmark (Tianjin) 2.4
Nike USA 1.0
Youngor PR China 1.0
Uniqlo Japan 1.0
Romon PR China 1.0
GXG PR China 0.9
Adidas Germany 0.8
Metersbowe PR China 0.8
Mark Fairwhale PR China 0.7

Source: China Daily based on Euromonitor

For German suppliers in terms of top materials (usually the most expensive materials), accessories (such as interlinings, buttons, thread, packaging) or also in cutting and sewing, China remains interesting. This was demonstrated once again at the last "Intertextile" in October 2015 Shanghai.

Two opposing trends are apparent: On the one hand exhibitors reported about a shift in demand to other countries in the wake of rising wages and ancillary wage costs. On the other hand suppliers of more expensive products can now look and hope beyond of inexpensive mass markets to the emergence of new niches, so a producer of woven-real hair fur materials. A provider of real horn buttons thinks similar.

The next "Intertextile" with a German pavilion takes place from October 11th to 13th 2016 in Shanghai ("Intertextile Shanghai Apparel Fabrics Autumn Edition"; information under www.auma.de or www.intertextile.com.cn).

Generally exhibitors recommend for risk diversification to build a second pillar next to the site in China. "The caravan moves on," is said. Currently the lowest wages for garment workers are being paid in Bangladesh, the country also benefits from duty-free agreements for imports into the EU. The latter also applies for Cambodia. Also very competitive the seamstresses are working in Vietnam and India. Moreover, Africa (specifically for example Ethiopia) will play an important future role, also a production facility in Korea (Dem.) is not outrageous for Chinese textile companies.

In general free trade agreements should get considerably more weight in future, as this is the case today.