By  on January 25, 2005

NEW YORK — Chinese manufacturers are boosting production with the lifting of apparel and textile quotas among World Trade Organization members this month, although some worry about the continued restrictions their exports will face.

A contingent of 41 Chinese textile and apparel manufacturers made this point while exhibiting at the Chinabrand trade show, which wrapped up its four-day run Sunday at the Jacob K. Javits Convention Center here.

Pan Pingli, foreign trade department manager with Lu Thai Textile Co., said his company had added 2,000 employees at its headquarters in Zibo in Shandong province. The fabric maker is expanding into the shirt business, with the goal of offering full-package garment production services. The firm now employs 10,000 people and produces 3.8 million yards of fabric a year.

“We’re still building up that operation,” Pan said, referring to the shirt business, which it launched early this month.

The company plans to sell its shirts under the Lt Grff brand, reflecting a drive by China’s government to urge its manufacturers to diversify their operations beyond contract production for foreign-owned brands.

Liang Shuhe, vice director general for the department of foreign trade at China’s Ministry of Commerce, said the show’s mission was to boost Chinese brand names.

“Through years of global competition, China has learned the importance of name brands,” he said. “The U.S. is our partner of choice for carrying out the name-brand exportation strategy.”

He said developing brands would give Chinese exports a tool other than price on which to compete. Many manufacturers elsewhere in the world, particularly in the West, complained loudly in the run-up to the Jan. 1 expiration of quotas that they’d be unable to compete with Chinese makers’ low prices.

“Consumers in the U.S. and [European Union] are interested in design and technology…more than the price of a product,” Liang said. “This is where Chinese enterprises lack strength.”

Among the apparel makers at the show, which featured producers of everything from small all-terrain vehicles to hinges, many said their export business still leaned heavily toward contract production for Western brands.

Han Lei, manager of Lanyan Group Co., a maker of denim fabric and jeans also based in Zibo, said his company, which employs 8,000, exports most of its production. It produces 65 million yards of denim and 10 million pairs of jeans a year. The bulk of its export sales are goods made under contract for major U.S. brands, not under its own label.Likewise, John Shi, sales manager with suit and shirt maker Hongdou Group, based in Jiangsu province, said while his company sells garments in China under the Hongdou name, most of its exports to the U.S. are under other brands. The company employs 16,000 people in 86 factories and has the capacity to produce 90,000 suits and 600,000 shirts a month.

A co-worker, Angie Qi Zhu, said the lifting of quotas among the 148 WTO nations has been a boon to Hongdou’s business. Quota rights in China were informally traded as commodities and in her product categories became cost-prohibitive.

“It was as much as $10 a suit for us and that made it very difficult,” she said.

China still faces the prospect of safeguard quotas and a recently imposed export tariff ranging from 2.4 cents to 3.6 cents per garment or set, as in the case of suits, but the phasing out of quotas and the ensuing charges have proven a significant competitive boost to the company. She said last year her firm received orders for 14,000 suits from U.S. customers. In the first few weeks of this year, the company has already gotten orders for 170,000 suits.

China’s apparel and textile exports to the U.S. have been rising sharply in recent years, with shipments valued at $14.43 billion for the year ended Nov. 30, a 25.8 percent increase from the prior year. Most observers expect Chinese shipments to grow even faster in 2005 now that there are no limits.

The nation’s integration into the world economy has not been without controversy, and the show proved a target for those who disagree with Chinese policies. On Thursday, two protesters disrupted the opening ceremony to remind the world of the Tiananmen Square massacre and protest China’s Taiwan policies. On Friday, U.S. Sen. Charles E. Schumer (D., N.Y.) held a press conference outside the Javits center to unveil legislation that would impose heavy tariffs on Chinese imports to offset the effects of China’s fixed exchange rate.

To access this article, click here to subscribe or to log in.

To Read the Full Article

Tap into our Global Network

Of Industry Leaders and Designers

load comments
blog comments powered by Disqus