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.