PPT Part 1- Introduction

Slide 1

Textile products are an essential part of our customers’ everyday lives and represent an important sector
in the global economy. As global population is projected to rise, the demand for products like clothing,
towels and other textile products will also increase, while resources are expected to become more
scarce. The challenge facing the world is how to produce an increasing volume of products while
working to conserve resources.

Source：https://www.walmartsustainabilityhub.com/sustainable-textiles

Slide 2

 China is home to the largest textile production industry in the world.

 It is also home to the largest textile export industry in the world.
 The Chinese textile industry is therefore a key player in the national economy, the
international markets, and the global economy as a whole.

Important China Textile Industry Statistics

 Over 4.5 billion meters of clothing is produced by the China textile industry each month.
(Statista)

 Customs data from the China textile industry shows that the export of clothing and accessories
fell by 0.4% in 2017, even though textile exports saw an overall growth rate of 4.5%. (South
China Morning Post)

 Labor costs for the textile industry in China have been steadily increasing, reaching a record
level of $336 per month in Shenzhen. That is double what other textile workers make in other
countries in Southeast Asia. (South China Morning Post)

 For the first time in history, a survey of 34 fashion company executives in the United States
indicated that fewer brands were looking for products that were manufactured in China.
(South China Morning Post)

 The segment with the most import value for the textile industry in China included women’s
suits, blazers, dresses, skirts, and other general clothing other than swimwear. Almost $900
million in import value was achieved. (HKDTC Research)

China Textile Industry Trends and Analysis

  China’s role as the #1 provider of textiles and garments is undisputed. That is not going to
change any time in the near future.

 Competitors: What is going to change is the influence disruptors have on the global textile
industry. Others in Southeast Asia, most notably Bangladesh, are gaining a market share of the
global industry because their labor costs are much lower than China – a shift that is recent.

 Wages for workers in China have doubled, and sometimes tripled, from what the industry was
paying just 20 years ago. That has led to higher costs in the export market, which has caused
consumer shifts.

 Caps on imports from China have affected the industry in negative ways as well. Although the
U.S. continues to lead in total purchases, North America and Europe are taking measures to
protect local companies from a dump of cheap textiles on their domestic market. That has
caused shifts in pricing and structure for the industry as well.

 Shifts in consumer preference promote new opportunities for the China textile market. The
demand for designer brands, labels, and limited-edition fashion offer new chances for the
industry to find success. It will take some time to adapt to this changing market, but it is going
to happen and the industry will continue growing because of it.

Source：https://brandongaille.com/21-china-textile-industry-statistics-and-trends/

Slide 3

China is the largest textile producing and exporting country in the world. With its rapid growth over the
last two decades, the Chinese textile industry has become one of the main pillars of the country’s
economy. Clothes, clothing accessories, textile yarns and textile articles are amongst the top export
goods from China. In 2018, China’s textile exports were valued at approximately 119 billion U.S.
dollars, a figure that corresponds to 37.6 percent of the global market share. Low cost and vast labor,
reduced commercial barriers and material supply availability are a few of the competitive advantages
the country offers for the clothing manufacturing industry. In regards to material supply, for example,
China produced around 79 billion meters of cloth in 2017 alone, and 5.99 million metric tons of
cotton in 2017/2018. 

Slide 4
Slide 5

Textile and Apparel Sales in China

China's textile industry maintained a moderate rise in the first quarter of 2016, although the growth of
exports to the European Union (EU) and the United States recorded a sharp fall. Chinese textile exports
in the first quarter grew by 22.16% reaching EUR 24.6 billion3. The growth rate is 3.17 higher than the
same period last year in percentage points. China's textile exports to the US and the EU, which set
quota limits reached the sum of EUR 7.3 billion, representing a growth of only 9.7%, 47 percentage
points lower than the growth rate of the same period last year.

On the other hand, textile exports from Mainland China to Japan, Hong Kong, Republic of Korea and
the Association of Southeast Asian Nations (ASEAN), which have no quota restrictions, jumped to
28.38%. That means 23.32 percentage points higher than the growth recorded in the same period last
year. Production is expected to increase textile 20% and total exports increase 15% in 2016. In terms of
production capacity, China remains world leader. According to a 2016 study by Prof Shang Lu4 : “In
2014, the latest statistics available, textile fiber production in China exceeded 50 million tons,
accounting for 54.36 percent of world share. By 2013, as much as 64.2 percent of the world’s chemical
fibers, 64.1 percent of synthetic fibers and 26.2 percent of cotton were produced in China. On the other
hand, apparel production in China reached 29.9 billion units in 2014, up 10.4 percent from 2013. Given
China’s vast production capacity, it is very likely that it will remain the top apparel-sourcing
destination for most EU and US fashion apparel companies for many years to come”. Growth rates of
the Chinese T&A Industry, continues Prof Shang, have showed a downward trend: “[…] output of
China’s T&A industry (measured by value added) grew only 7.0 percent between 2013-2014, a
significant drop from 10.3 percent between 2009-2010”. Similar patterns can be seen in all the other
main indicators in the industry (sales revenue, net profit to investment), as a result of the overall
slowdown of the domestic economy.

Slide 6

Key Growth Drivers

China has experienced an astonishing growth of its economy by doubling its per capita income every
five years. In 2015, China had a population of 1.3 billion people, of which 652 million lived in urban
areas. A total of 69 million households have a middleclass status and 53 million households have a
middle-high class status. Each year 40 million people join the middle class, and its average GDP
growth remains above 7% annually. These macroeconomic data support the great potential of the
Chinese consumer market, but the main problem for European companies still do not understand the
real possibilities and opportunities in the Chinese market. Innovation, added value and environment
pollution appear as new challenges and offer enormous business opportunities that the T&A European
companies can leverage. Among the main factors driving the future development of the T&A Industry
in China there are:

 Free Trade Zones

China is a political economy; therefore, foreign companies aware of the political priorities of the
country will have a faster path to market and will guarantee better results. Currently it is favoring the
establishment in free trade zones. China following approval and launch in 2013 of the Free Trade Zone
of Shanghai, in March 2015 adopted three more areas in Guangdong, Tianjin and Fujian. Knowing the
advantages offered access T&A for exhibition in the Free Zone itself and subsequent entry into the
Chinese market through these customs (called express by the speed in the process), it provides a clear
advantage to those European companies intending to have permanent presence in the Chinese market.

 Annual Disposable Incomes

First it is important to be aware about the fact of anual disposable incomes increase every year together
with consumption habits inclination in China. More Chinese and even more annual expenditure on
clothing per capita in China contribute to growing trends.
  Online Chinese Market

Another important thing to consider is the evolution of the online Chinese market. Since 2013 China
has become the world's largest Ecommerce market globally, and the country offers great opportunities
for European companies that want to sell online.

China’s E-commerce sector has grown at a remarkable rate during the last decade. After a slow start,
the industry took off around 2004 as new payment mechanisms (predominantly Alipay) and Alibaba’s
platforms (Taobao and Alibaba) began to catch the attention of the fast growing number of internet and
mobile phone users