BEIJING — "Technological textiles are seen as a panacea for all of our woes, but in fact they have limitations," remarked British Clothing Industry Association director general John Wilson at the Global Textile Economic Forum here. "Things like cell-phone gloves, solar panels and such will only affect a small few. They will not create wealth or jobs."
Wilson was among the speakers at the fourth-annual GTEF, organized by the China National Textile and Apparel Council and held at the Diaoyutai State Guesthouse here. The forum's official theme was the unwieldy combination of "Science & Technology, Brand and International Cooperation."
The speeches by 21 leaders of the global textile and apparel industries ranged from China-specific issues to global trends to country and company case studies. Many of the speakers addressed the thornier subjects of intellectual property rights, fair trade and corporate responsibility.
Yang Meide, the chairwoman of China's Esquel Group, presented an impassioned lecture on the latter issue, claiming that social responsibility in China must emerge through culture, morality and national pride rather than legal means. Viable domestic brands, she added, will follow the same path.
"China is outgrowing its image as the world's factory, and it will become the world's business partner. This will happen by regulating social responsibility via culture, not by law," Yang argued. "China needs transparency for health, safety, working hours and fair pay. China can contribute to global social responsibility. China's own brands will emerge when they are socially responsible and proud to be Chinese. They need our own people to be willing to wear their products."
Yang said international concepts of social responsibility are becoming increasingly common in the Asian nation, with 9,000 rules about workers' rights enshrined in the China Social Compliance Statutes, although she skirted the question of enforcement of those rules. She also argued that environmentally friendly technology is also cost-effective in the long term, and drives innovation.
"The textile industry is moving upstream, and the labor-intensive sectors are moving to poorer countries, and we hope Chinese companies will export good labor practices when they go," said Yang.
She argued that China is rapidly moving away from being the world's factory to being the world's marketplace. "There is a changing of the image of the textiles industry in China under way. China is not just sweatshops of underpaid labor. It is not just child labor, with long hours. It is not just low-cost and low-tech: we can do everything else, too. Since the 1980s, China has been changing. Two-thirds of textile firms are privately owned, 40 percent are foreign-owned. The technology is sophisticated. A-class players are far more than cut-and-make factories; they're doing their own design and supply chain management," Yang explained."With problems like unemployment, China will find ways to deal with them. China will find its own ways to develop," remarked Pierre Cardin optimistically. "China has its own advantages, which it can export. I know the situation during Mao, but now the Chinese like fashion. China is the world's future."
True or not, China's rising status as a manufacturer and market has caused concern for many nations' textile and apparel industries. Wilson pointed out that, in the past 15 years, the industries in "China and the U.K. have changed diametrically. In the U.K., textiles employment has decreased 60 percent, and manufacturing 40 percent. Chinese textiles employ 19.6 million people, and that will grow to 23 million in 2010."
Issues like "dumping, prices, currency and seizing products all need to be addressed. We need each other, but these issues are real," Wilson said.
Paolo Zegna, speaking as the president of the Federation of Italian Textile and Fashion Industries but also out of his company's long experience in China, chastised the local government on several fronts, including the quality of the raids on several luxury outlets in Shanghai last January. "The confiscation of luxury goods and the wide reporting of it is useless and inappropriate, not in accordance with international standards or even the latest local standards. Free, open markets with clearly defined rules is the goal for everyone," Zegna said. "If Chinese companies all make the same product, or copy others, China will never rise."
Zegna highlighted the tensions between Chinese and Italian textile manufacturers. "The growth rate in Chinese textiles has been 25 to 35 percent per year, but for the Italian industry, it has been the reverse. From 2001 to 2005, it felt like Italy was being invaded by textile products from China. We lost 12,000 companies, an 8 percent drop in the clothing industry. China is seen as more of a dangerous enemy than a future partner."
However, he continued, "the worst for Italy is over. We're aware of China's competition, but we're also aware of our own advantages: research, marketing, technology and the image of Italy. The China threat is becoming the China opportunity. China is the third-largest export market for Italian textiles. Italian textile companies are increasingly looking to cooperate with their Chinese cousins."There is great potential to cooperate, but we need to react to the market," Zegna stressed. "Italy has only a fifth as many textile companies as China, labor costs in Italy are 20 times that of China, and the average Chinese textile company employs 500 people, while Italian companies average 10. Italy has a 40th of China's textile workers, but they are eight times more efficient. China does have competitive labor costs, and is training better technicians and investing in machinery and technology."
Chinese producers remain unaware of concerns like the environment and work conditions, he said, because most business goes through middlemen, but "China's 2006 five-year plan outlines opportunities for turning the China-Italy relation into cooperation" through the establishment of strong Chinese brands, both locally and abroad; planned development of company clusters in Western China, with better supply chains, and growing concern about the environment and technology.
While intellectual property rights are a global issue, it is particularly a concern in China's globalization. "[IPR] was always part of business-to-business international exchange," pointed out Guriqbal Singh Jaiya, director of the World Intellectual Property Organization's Small and Medium-Sized Enterprise Division, in his discussion on IPR law's evolution since the 1833 Paris Convention. "But 200 years is not enough to change people's attitudes. We've had thousands of years of property being physical, and are still adjusting to the intangibles."
He cited the examples that "80 percent of the value of Microsoft is intangibles, and the value of the Coca-Cola trademark is $60 billion.…All 21st-century companies can only prosper via intellectual property.
"Intellectual property adds value at every stage of innovation and the commercial process: innovation, marketing, consolidation, value chains and e-commerce," Singh Jaiya continued. "'Trust and support' are what branding is all about. Branding depends on the trust of the customers. 'Intellect' means science and technology, and innovation. 'Property' means exclusivity, but franchising, partnerships, etcetera broaden their accessibility, so relationships are crucial."
Many of the talks stressed how important brands are in the apparel business. Dominique Jacomet, vice chairman of the Union des Industries Textiles and the future director general of the Institut Français de la Mode, advised on how to build a global brand. "A brand needs to be strong in the domestic market to survive in the international market. It needs domestic production and distribution," he said. "Partnerships are an option, whether a subsidiary or a partnership, offering economies in terms of resources and time saving, but possible loss of control. Joint ventures are a compromise."In accordance with this year's forum theme, most of the speakers touched upon the technological future of the textile industry. Dr. Wolf-Rudiger Baumann, director general of the Confederation of the German Textile and Fashion Industry, presented on developments like microprocessors in fabrics used for health monitoring and on the environmental impact of the production process. "The world population will rise to nine billion by 2050, mostly in poor nations. Our generation must provide development for future survival. Textiles are part of this challenge. Technical innovation happens in every arm of daily life: plastics, metal, papers and textiles…which play a role in all industries."
Several representatives of national textile associations took the podium and offered their countries' industrial development as case studies. William Wong, chairman of the Taiwan Textile Federation, traced the island's growth since the Fifties, its change to a technology-intensive economy in the Eighties and its current shift to brand marketing to cope with an oversupplied global and Asian textile industry.
Myeng-Keun Ha, vice chairman of the Korean Federation of Textile Industries, said textiles represent 10 percent of South Korea's employment, but that growth peaked in 2000 — a year when apparel imports rose 19 percent — and the country experienced a $2 billion trade deficit in 2006.
China is likely to face its greatest future competition from the other Asian giant of India, and both economies are heavily dependent upon textile exports for growth. "Textiles and clothing play an important role in many developing countries. They represent half of world textile production. In no other category do they so dominate," said Prem Malik, chairman of Indian Texprocil. "In developed countries, textile manufacturing is what launched the industrial revolution. Production lines are now shifting to developing countries, a 'third migration' to Asia."
The textile industry employs 82 million people in India, making it the country's largest employer, said Malik, and contributes 17 percent of its exports and 4 percent of its gross domestic product, or a value of $32 billion. By 2012, India's textile industry value will rise to $110 billion, going from 4 to 7 percent of the global market, and employing an additional 14 million people.
Like China, India is becoming a more attractive market, said Malik. "The Indian GDP is growing at 8 percent a year. Foreign brands are jostling for shelf space.…Organized retail will go from 3 percent now to 12 to 15 percent by 2012. Brand awareness will spread to small cities and rural areas, because of the GDP rising, individual income rising, more women working and youth and contemporary culture rising."Malik described the Indian market as one where the line between international and local brands blurred. "Local brands are being introduced by international companies, and then Indian companies are investing abroad to acquire global brands."
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