Quotas Do Not Matter

What is the most effective strategy to limit China's textile and clothing export to the global market? Many people believe it should be trade restrictions. That's why the United States hurried into sever at rounds of negotiations In 2005 to put safeguards back onto several product categories, hoping to slow down the flood of Chinese textile and clothing products into the U.S. market.

However, the interviews show that most Chinese textile and clothing enterprise are not worried about trade restrictions. Over the years, China's textile and clothing industries have become adept at dealing with different forms of trade restrictions in the global market through different strategies. This has forced them to develop ways to either avoid trade restriction or obtain more quotas.

China's textile and clothing products will increasingly enter the global market regardless of the kind of trade restriction applied. Therefore, quotas or any other form of trade restriction may not be a big concern for U.S. companies when they do business with China.

So what is the biggest challenge for China's textile and clothing industries? Many Chinese companies have been frustrated with the constant changes in the trading environment. Such changes make forecasting and long lead-time business harder.

The changes include both bad and good changes, such as the government policy on exporting taxes, minimum wages, energy prices, and currency exchange rates. A stable trading environment is what most Chinese textile and clothing companies hope for, even if some part of the trading environment is not ideal for them.

In China, Quantity Is Giving Way to Quality

China's textile and clothing companies, faced with increasing production costs, are starting to lose their economic advantage to such countries as Vietnam and Cambodia; thus, Chinese companies are beginning to change their focus from quantity to quality.

If foreign companies need to produce complicated, high-quality goods, China remains a good choice. However, in situations where quantity at a very low cost is the primary goal, Southeast Asian countries may be the most economical choice.

With this new attention to quality, there has been a dramatic increase in the creation of Chinese labels featuring the work of Chinese designers. This trend opens up new opportunities for foreign companies to partner with Chinese designers and manufacturers in the development of new lines that cater to both Western and Chinese buyers.

This study provides first-hand information and the latest findings about China's textile and clothing industries to the world using a variety of resources and perspectives.

The findings from this study can help non-Chinese importers, distributors, and retailers better understand how to select and where to look for a business partner in China.

Knowing about what their Chinese partners' fears and worries are will enable foreign companies to better develop strategies to tackle those fears.