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The newly released five-year development plan for the textile industry rightly points out the direction of its growth. It requires textile manufacturers to improve their ability to innovate, develop high-tech products and those with higher added value, and promote branding. The plan, drawn up by the National Development and Reform Commission, the China National Textile Industry Council and local government agencies, marks a much-needed shift of focus from quantity to quality in our textile development policies. The elimination of global quotas on textile product exports has facilitated China's textile exports since early last year. Its textile exports accounted for 25 percent of the global total last year, 10 percentage points higher than five years ago. According to the new development plan, by 2010, China's textile exports are expected to increase by over 50 percent compared to last year. But against the backdrop of these soaring exports is the low technological level of the domestic textile industry. We mostly manufacture low-end products. The large production volume may help us grab a slice of the overseas market, but it also brings trade frictions. US and European textile producers have been filing complaints about overseas competitors, including Chinese manufacturers. The Western manufacturers are beset with problems related to high labour costs, industrial upgrading and restructuring. It is irrational and violates fair trade rules for them to lobby policy-makers to impose restrictions, mainly anti-dumping charges or safeguard measures, on textile imports from China. Nevertheless, a new development strategy is badly needed for our textile sector. Trade frictions aside, an inability to mass-produce high-end products would undermine the long-term sustainability of the domestic textile industry. Now that the domestic labour costs and raw material prices are rising, the renminbi has appreciated and the tax rebate for textile exports may be further cut, domestic manufacturers must adopt an innovation-oriented strategy if they want to survive and stand out from the competition. To that end, technological improvement must be promoted and more attention must be paid to branding, a field that can create huge added value but has been largely shunned by domestic manufacturers as they can make quick profits through the mass production of low-end products. The State now needs to issue follow-up measures that will make this plan truly innovation-centered. This ambitious blueprint will not play its due role without such concrete measures. (China Daily June 29, 2006) |
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