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The Textile Manufacturing Blog is the place for conversation and discussion about Industrial Fibers and Fabrics, Textile Technology, Engineered Fabrics, Machinery & Instrumentation as related to the textiles field. Here, you'll find everything from application ideas, to news and industry trends, to hot topics and cutting edge innovations. This blog is inspired by the Textile Manufacturing newsletter from GlobalSpec, which you can subscribe to here.

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China Considers Haute Couture

Posted March 15, 2007 4:49 PM by Snowman

In the March 5, 2007 Textile Manufacturing & Technology newsletter, the point is made that

"Apparel manufactured in China as a commodity item currently returns only 20% of its sale price to the factory. For this and other reasons, the Chinese textile industry would do well to consider building high-end fashion brands. But can a country well known as the textile factory of the world re-invent itself as a manufacturer of high end fashion goods?"

The US and Japan used commodity manufacturing to bootstrap themselves to producing branded goods with higher market value. Manufacture of the abandoned commodity goods was eventually taken over by less developed countries.

In the case of China--because of domestic unemployment concerns, there is no evidence that it will abandon the manufacture of commodity textile goods once it has build up high-end textile production. As a result, third-world textile-manufacturing countries do not stand to benefit from China's move up-scale in the same way that they did form the experiences of Japan and the US.

Question: What will the global economic consequences be--for developed and developing countries--if China succeeds in completely monopolizing the global textile trade?


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#1

Re: China Considers Haute Couture

03/16/2007 12:20 AM

This fits neatly within the bell curve of developing nations.

First, it is a complete impossibility for China to monopolize an industry with as broad a market as textiles. By the time China makes its quality / product upscale movement significant, many currently third world nations will also have moved upward and be in a better position to take a growing portion of the low end of this international market. They will compete and they will get a portion of the market to produce products that more developed countries have / or will have lost interest in producing. Additionally, large institutional / multinational buyers will split their orders between nations to acquire supply line security and to maintain an upper hand in negotiations.

Second, victory goes to the innovators of new technologies and new products. The rest just follow the way of old established industries.

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#2
In reply to #1

Re: China Considers Haute Couture

03/16/2007 4:18 PM

Or maybe innovations in marketing--if not in technologies or products. See, for example,

http://www.csmonitor.com/2006/1013/p01s02-woaf.html

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#3
In reply to #2

Re: China Considers Haute Couture

03/16/2007 7:38 PM

China has a very bad track record when it comes to how it treats it's own people, and it's common practice to use prison labour. There are plenty of Falongong practitioners who can vouch for the thousands of work camp labourers pumping out products for the international market. Unfortunately the CCP wants to stay in power at any cost and corruption is rampant throughout the entire political infrastructure . It will take a long time to clean up their act.

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#4
In reply to #3

Re: China Considers Haute Couture

03/17/2007 5:44 PM

It's still not clear how much human rights are likely to be at issue. Unions in the US have tried to use the issue, but textile manufacturers have threatened to off-shore operations in response. Meanwhile individual consumers are caught between wanting the cheap Chinese products and wishing to hold on to their jobs at home. See, for example, Oded Shenkar, The Chinese Century (Wharton, 2006; p. 173-6).

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#5

Re: China Considers Haute Couture

03/20/2007 11:30 AM

I remember an article in Business Week a few months ago about the moving of textiles out of Thailand into China because the price in Thailand was $12.00 a dozen for shirts and they can get them in China at $10.00 a dozen. Those are the same shirts you are paying $25 to $39 each in the stores. What gets me is that when you see textile pictures in China the equipment is brand new. I live in what used to be a textile state, not anymore. Unfortunately you cannot compete with a low wage country, we used to think that less educated people could not do the more technical work of today but that was a joke.

Don't blame the people of these countries if they did not have these low paying job they would starve or be back plowing to eke an existance, blame the US companies that love to sell imports, they make bundle. Can you imagine how many shirts you can put in a cargo container and ship to the US for about $2,000 and then sell for $39 or more. NC is pouring money into a new container port in Wilmington to take on the bigger cargo ships that are being made right now to send even more.

When I was in Hong Kong about a year ago, I passed miles and miles of containers waiting to be loaded on ships as I went to the new airport.

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#6

Re: China Considers Haute Couture

03/30/2007 8:52 AM

Developing countries MUST reduce or cap imports otherwise the local development of the clothing industry will be destroyed.

The imports must be recognized as the importing of unemployment and poverty.

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