NEW YORK — While China is already a major supplier of textiles and apparel to the U.S. — for the year ended in March, it was the number-two importer in dollars behind Mexico — its manufacturers believe there’s still plenty of room for them to expand into this market.
This story first appeared in the June 11, 2002 issue of WWD. Subscribe Today.
That was evident at last week’s China Textile & Apparel Trade Show, which on Friday wrapped up its three-day run at the Jacob K. Javits Convention Center. About 160 Chinese manufacturers attended the show, many of them taking their first crack at selling to U.S. customers.
Most exhibitors interviewed said they were exploring the U.S. market now to position themselves for 2005, when quotas will be lifted among members of the World Trade Organization, clearing the way for shipments from China to the U.S. to rise dramatically. Quota in China is currently so limited that U.S. importers typically pay several dollars per dozen items imported just for the quota rights — that’s on top of the cost of goods and shipping.
Zhan Gao, president of Changzhou-based Helios Textile & Apparel Co., said his firm came to the show to try to make inroads into the U.S. to diversify its customer base.
“Our main export market is Japan, but Japan’s economy hasn’t been so strong lately and we want to expand into the U.S.,” he said.
While Japan reported last week that its economy grew in the first quarter of 2002, ending an 18-month recession, overall the Japanese economy has been soft for most of the past decade.
Zhan added that his company, a maker of woven fabrics and outerwear with 500 employees, has essentially been barred from shipping to the U.S. because the Chinese government has issued it no quota rights.
“We had no quota because we are a private company, not a state-owned company,” he explained “But after 2005, there will be no quota, so that will be a competitive advantage.”
This year, his company has persuaded a state-owned firm with quota rights to “share” some quota with it, “but the amount is limited,” Zhan said.
Another company taking its first swing at the U.S. market was PingHu HuaChengMaolu Garment Co., a Zhejiang-based manufacturer of pants, with about 2,000 workers. Speaking through an interpreter, company representative Jackueline Yao said she was hoping to find a U.S. agent to represent her company in New York.
Several of the exhibitors who already do business with U.S. customers said their shipments to this market had been up substantially early this year. According to Commerce Department data, shipments from China to the U.S. for the first three months of the year were up 47.2 percent on a square-meters-equivalent basis. While exhibitors were reluctant to comment on margins, import data showed that the dollar value of China’s shipments rose only 8.2 percent.
Henley Dong, manager of the European and U.S. department at Shandong-based Zibo Feishi Textile Co., a maker of towels and other knit products, said he has seen an uptick in orders lately that he relates to U.S. uneasiness about producing goods in India and Pakistan, two other major producers of textiles and apparel.
The U.S. military campaign in Afghanistan and the recent raising of a nuclear threat in the Indian-Pakistan dispute over the Kashmir region have left U.S. sourcing executives uneasy about shipping goods from the region.
“Some customers are moving some of their sourcing from Pakistan or India to China,” Dong said.
For the first three months of the year, imports of textiles and apparel from India and Pakistan were down on a dollar basis, but up on a unit basis.
Throughout the world, apparel manufacturing and sourcing executives are spending a lot of time wondering — and often worrying — about how the elimination of quotas in 2005 will affect production patterns. Major Chinese producers share that concern.
Richard Gu, a representative of Sunshine International Group, a Jiangyin-based vertical manufacturer of women’s and men’s wool suits, with 9,000 workers, said “it’s impossible” to predict how the business will change in 2005.
But one thing is certain, he said: “The competition will be very great.””