China's Textile industry should develop brands
Source: CCPIT TEX Date: 2007-08-14
The Sino-EU and Sino-US agreements will mature by the end of this year and next year respectively. The US and EU will most probably impose anti-dumping and anti-subsidy measures on China's textile products and the country is likely to face a more challenging international trade situation in the near future.
Chinese enterprises already suffer from many defects such as lack of self-owned brands, inferior position in the international division of labor, and weak capability in making profit in the industrial chains.
Market shares lost by China's textile products in the US market in 2006 were picked up by other Asian countries and India, Peru and Columbia restricted China's textile products by implementing anti dumping laws.
Chinese government and textile exporters should be ready to deal with the situation after the agreements become mature.
China's textile and garment exports reached US$ 144 billion in 2006, with a surplus of US$ 125.9 billion, accounting for 70.9 percent of the country's total surplus of goods trade. China's textile industry maintained a growth of 14.9 percent in the first quarter of this year, with a surplus of US$ 27.36 billion.
The exporters only gain a marginal profit when Chinese products are exported to the European and US markets but importers and retailers are the biggest beneficiaries. China's textile products manufacturers only take 10 percent of profits in the whole benefit chains, while 90 percent of profits belong to the brand owners, wholesalers, distributors and retailers.
Chinese textile enterprises also import a great deal of cotton, cloth and advanced textile equipment from the United States every year in order to meet the export demand.
Lack of brands resulted in gaining the minimum profit in the whole value chain. The urgent need for China's textile industry is to build brands and adjust industrial structure.
