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Beijing fair a snapshot of textile trade |
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2006-4-18
Beijing fair a snapshot of textile trade
BEIJING - China is fast catching up to developed countries as a producer and consumer of top-quality clothing because manufacturers are learning more and shoppers are spending more, but financial barriers still hem in the country's massive textile production capacity, industry leaders gathered in Beijing said last week.
The fashion appeal of Chinese-made clothes is improving as local producers learn from more advanced countries, such as Italy and South Korea, how to choose fabrics and avoid imperfections on the assembly line. Meanwhile, consumers, especially younger people, increasingly do not mind spending up to 20% of their incomes for durable or name-brand clothes, not just something cheap that looks good as in years past.
At the same time, last year's increase in the value of the yuan, plus textile import quotas in developed countries, are hurting Chinese manufacturers.
This rosy, but gray-tinted, view of China's apparel industry emerged from a cross-section of textile exhibitors from 18 countries who were scouting for business at the sixth annual Intertextile Beijing trade fair, held last Tuesday to Thursday. Intertextile Beijing is the top trade fair for apparel, fabrics and accessories manufacturers and suppliers wanting to reach northern and northeastern China, and comments from the Beijing Exhibition Center floor indicated China is building on its long-held status as a low-cost production base for sales abroad into a place where high-end clothes can be both made and sold.
"Chinese want to follow the fashion, but price is always an issue," said Ian Cerruti, marketing manager with the Italian men's-wear company Lanificio Fratelli Cerruti, which sends fabrics to mainland China via Hong Kong. Comparing China with Italy, he said, "They're not yet at that quality, but they will be there soon."
Cerruti said his company gets China orders for wool fabrics that may be two or three years behind current fashions in Europe. But Chinese consumers like European fashions enough to buy, study and later duplicate them, said Andreas Schmitz, president of the 109-year-old German suit fabric maker Willy Schmitz Tuchfabrik. Managers of foreign brands say China's studies are fair, not theft.
"Chinese like the European style. If it's something special, they will pay a lot of money for it,'' Schmitz said. "Then they find they can do it themselves.''
Average urban income of 10,493 yuan (US$1,308), though not as high as foreign textile makers would like, has allowed younger city dwellers to spend 10-20% of their salaries on fashion - up to 10,000 yuan per month for clothes lovers who can afford the habit. Younger consumers value comfort over formality, said Zhang Yanyan, 23, a textile-industry worker from the relatively well-off Jiangsu province. Name brands and novelty also count.
"Chinese like new things, so fashion becomes more important," said Yao Yuan, a Chinese national who works for a Hong Kong clothier. "Sometimes they wear clothes just to show off that they have a name brand."
Selling to China was a top reason for attending the Beijing trade fair. A Pakistani fabric maker came for his first time because of the number of potential consumers in China. Ploucquet, a German company that makes a waterproof clothing membrane similar to Gore-Tex, attended the fair to establish its name with Chinese sports-clothing manufacturers. The number of exhibitors was 683 this year, up from 564 in 2005, and 7,392 visitors attended on the first day, said Eva Tam, spokeswoman for the event organizer, Messe Frankfurt (Shanghai) Co Ltd.
"Usually [exhibitors] say there's a great potential, otherwise they wouldn't come," Tam said. "Most of them come every year. They say the Chinese manufacturers are becoming more professional. They know what they want."
But textile makers still say China doesn't spend enough money. Chinese factories looking for name-brand European fabric suppliers don't want to buy anything more than $10 per square meter of fabric, though the best lines are $50-$60, said Antonio Cecchetto, international export manager for the 55-year-old Italian fabric maker Teseo SRL.
Chinese textile workers still cut corners without proper supervision, said Patumma Bunjanya, senior sales merchandiser with Akko Group International Co Ltd, a Bangkok-based fabric maker. Akko plans to send a Thai employee to its China factory of 500-1,000 workers to stop defective garments from leaving the assembly line for markets in Europe, Bunjanya said.
Chinese manufacturers say revaluation of the yuan is hobbling the nation's $409.3 billion textile industry, which grew 116% over the past five years and employs 19 million people, mostly in coastal southern China. The roughly 3% hike in the currency's value since last July and talk in the industry of further increases this year deter companies that depend on exports, because a stronger yuan directly cuts into profits by making Chinese-made products pricier overseas.
"We can get by, we can eat, but it's hard to make money," said Wang Chunjiang, director of the Beijing office of the 35-year-old Hong Kong-based export company Aunley & Co Ltd. "The yuan [exchange] rate is not good for the industry." He said the availability of cheap labor should satisfy foreign companies enough to stop pressuring China to revalue its currency.
Textile quotas in the European Union also should come down, said Liu Haohai, a representative of Shandong Daluge Weaving & Dying Industry Co Ltd, a 10-year-old private Chinese company worth $28 million. It sends 40% of its goods to Europe.
Foreign textile exporters say they have benefited mildly from the currency revaluation. They also export fabrics to China via Hong Kong, a route that some say saves on taxes, and trust a handful of Chinese partner factories to take care of costly legal details in the mainland.
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