Compared to the above three types of enterprises, private enterprises are facing the least number of problems because they often have plenty of orders to keep their production running and have the lowest production cost making them the most common type of Chinese company with which foreign businesses interface.

Since textile and clothing industries do not require much technology, investment in equipment is not a big factor. Private enterprises hire people on a more temporary basis without paying benefits, bringing down their operating costs.

However, since most of their employees are temporary workers from rural agricultural areas and because retirement and social security plans are not transferable in China, a monthly cash salary is more important for temporary workers than are benefits.

Also, since the economic reform in China, private enterprises have been allowed to compete with other types of enterprises to bid for the quotas they need. Companies should develop different strategies when doing business with Chinese textile and clothing companies.

In addition, when choosing business partners in China, companies need to consider their different strengths and weaknesses as well as advantages and disadvantages. Practicing the same business strategy across all Chinese business partners is unlikely to work well.

Finding Textile and Clothing Manufacturers in China: Where to Go

In the last ten years, Chinese textile and clothing industries have become concentrated along the east coast of China in five provinces, ShanDong Province, JiangSu Province, ZheJiang Province, FuJian Province, and GuangDong Province, and the city of Shanghai. These areas serve as China's textile and clothing centers and make up more than 80 percent of Chinese textile and clothing production and trade.

Recently, the origins of workers in Chinese textile and clothing industries have shifted from China's east coast (five provinces and one city) to China's mid-west region. Workers from mid-western regions are migrating and taking jobs with the manufacturers along the east coast. This shift is mainly caused by the increase of local labor costs along east coast U.S. companies should be mindful of both the benefit brought by this shift (e.g. possible lower production cost), as well as potential problems (e.g. inexperienced employees and unguaranteed product quality).

One interesting phenomenon in China is the development of Industrial Clusters. This model is very common in ZheJiang Province. A cluster of small textile and clothing manufacturers and supporting companies, which are often private enterprises, are located close to each other and form a production chain.

For example, one manufacturer only produces greige goods; another manufacturer, located just across the street, only does dying and printing; another one nearby makes clothing. Those small-size private manufacturers rely on each other and form an Industrial Cluster, which makes every manufacturer more competitive because they are close to each other and can complete the whole production process. For example, a fabric dyeing and finishing mill can find a textile mill next door that can provide the greige goods, which can save shipping and insurance expenses and shorten lead time.

Another new format is the Textile Industry Park. While most Industrial Clusters are formed by small-size private enterprises, Textile Industry Parks are usually a group of manufacturers with a better systematic structure, more advanced methods, better developed management, and an overall operation on a larger scale. There are several of these kinds of parks near the cities of Nantong, Wuxi, and Changzhou.