GDP: $5.56 trillion/$4,300 per capita (2001)
This story first appeared in the January 14, 2003 issue of WWD. Subscribe Today.
GDP Change: +7.3 percent (annual)
Population: 1.28 billion
Unemployment: 10 percent in cities, higher in rural areas.
Textile & Apparel Exports to U.S.: $8.09 billion, up 23.8 percent*
Key products: Cotton and synthetic-fiber apparel, printed fabric, innerwear, children’s wear.
Key companies: Shanghai Zhongxing Textile Co., Suntex Integrated,
Shenzen H&S Garment Co. Ltd.
Currency: 8.29 yuan = $1 U.S.
The American Textile Manufacturers Institute isn’t the only voice in the industry expressing concern about China’s growing role in the apparel supply chain. Since China joined the World Trade Organization in December 2001, its exports of textiles and apparel have been growing rapidly, particularly for products on which quotas were dropped last year, like luggage and bras.
China is rapidly gaining ground on Mexico, which is currently the U.S.’s leading supplier of textiles and apparel but last year saw its shipments of those products to the U.S. fall 7.7 percent. It’s been almost 25 years since China started loosening state controls on its economy and over that time the country has become a major exporter of everything from simple toys and garments to television sets and computers.
Manufacturers of all stripes are increasingly looking at China as a highly appealing location for factories. The primary reason is its massive population: Not only is China’s the largest in the world, but its population is still largely rural. About half of Chinese workers are currently employed in agriculture — largely on small rural family farms, where they may be underemployed. That has lead to a heavy rate of migration into cities, which ensures a constant flow of new workers and keeps wages low. Despite their low wages, though, Chinese garment workers are regarded as highly skilled and efficient, while its companies are said to be very flexible and accommodating to export customers.
While the southern province of Guangzhou and the area around Shanghai have been the primary centers of manufacturing in recent decades, sources said factories have been migrating to the north and west of the country in search of new opportunities. With a new president, Hu Jintao, who has expressed strong interest in further opening China’s economy, it’s likely the Middle Kingdom will only gain in importance as a production center.
*For the 12 months ended October 2002, compared with year-earlier period.
**China data excludes Hong Kong Special Administrative Region.
SOURCES: THE CIA WORLD FACTBOOK, U.S. COMMERCE DEPARTMENT, OANDA.COM