Sino US Trade Friction Escalates, Where Is The Road Of Textile Manufacturing?

Since 2018, trade frictions between China and the United States have escalated. As one of the important industries in the US trade, the export of textile and garment industry is seriously affected by the US tariff increase. The proportion of textiles and clothing imported from China has dropped significantly, while the number of imports from India, Vietnam, Pakistan and other countries has increased significantly. Sino US trade friction has accelerated the transfer of textile clothing orders to other countries. Of course, from the perspective of the changing history of the global textile industry, we can see that the capacity transfer and industrial upgrading of the textile manufacturing sector are the trend of the times, and the current trade environment only accelerates this process.

Since the first industrial revolution, the United Kingdom took the lead in realizing the industrialization of cotton textile production as the center of the world textile industry. The global textile manufacturing center has undergone several changes in several emerging Asian countries and regions like China, including the United Kingdom, the United States, Japan, Korea and Taiwan. At present, China has become the world's largest exporter of textiles and clothing. In recent years, due to the comparative advantages of labor, raw materials and other factors of production, tariffs and trade barriers, the development of textile manufacturing industry in Southeast Asia has entered a fast lane. With the continuous transfer of the global textile manufacturing center, the division of labor and the trade pattern of the textile industry are constantly changing, and the value chain of the global textile industry is also in the process of continuous restructuring.

From the past global textile industry center shift and value chain reconstruction process, The industrial technology revolution is the basis for the formation of the world textile manufacturing center. Textile production in small family workshop mode was replaced by machine chemical plant in the industrial revolution, and the first country to grasp industrial technology became the center of world textile manufacturing for the first time. Cost elements (raw materials, labor and so on) became the main driving factor for the transfer of world textile manufacturing center. The United States became a textile manufacturing center in the early twentieth Century because of its rich cotton materials and immigrant population. After World War II to twenty-first Century, textile manufacturing centers from the United States to Asian countries were mainly due to the differences in labor costs. Exchange rate factors and trade environment factors accelerated the speed of the textile industry transfer. Japan and other Asian countries increased rapidly in the textile industry, and the trade surplus gradually increased. The developed countries led by the United States blocked textile exports through exchange rate and trade restrictions, and promoted the textile manufacturing industry to transfer to other less developed countries and regions.

　　 In the whole chain of textile and apparel industry, the labor intensive clothing manufacturing links are at the bottom of the "smile curve", with the lowest added value, and the higher value added in the design and research and downstream brand marketing is in the upstream of the industrial chain. The development process of textile industry in various countries includes: developing low value-added manufacturing links, extending the industrial chain from upstream to downstream, transferring low value-added links, strengthening R & D design or brand retail. It can be seen that the transformation from low value-added products to downstream brand retail or upstream R & D design has promoted the position of the state in the industrial chain and strengthened the relative competitive advantage.

　　 The future development of China's textile industry is bound to continue this trend, transferring low value-added links, extending from low-end textile manufacturing to high-end manufacturing and upstream and downstream industries. 。 Therefore, in the process of transferring the global textile and garment manufacturing center from China to Southeast Asia, in order to make full use of the technical strength and management experience gained in the process of industry change and value chain reconstruction and enhance the competitiveness and enhance the position of China in the industrial chain, the main development directions of domestic textile manufacturing enterprises include:

　　 (1) conform to the trend of industrial development and layout overseas capacity. 。 Using Southeast Asian countries' raw material and labor cost advantages and preferential policies to enhance their competitiveness in the global market. At the same time, a large number of textile enterprises have set up factories in Southeast Asia to form industrial clusters, making cooperation between upstream and downstream enterprises more convenient, which is conducive to reducing the cost of raw materials and products. The increase in the proportion of Southeast Asian capacity has not only enhanced the profitability of the companies, but also improved the market competitiveness of the companies and the ability to resist risks in the deteriorating international trade environment.

　 (2) upgrading the production equipment and promoting the automation process with the technology and management experience accumulated by the textile industry for many years. 。 On the one hand, it can reduce manpower cost and improve efficiency in production process. On the other hand, it can improve product quality, transform from low-end product manufacturing to high-end product manufacturing, enhance product added value and meet the changing demand of the market.

　　 (3) extend the industrial chain to the downstream production or R & D design links. 。 By extending the industrial chain to the downstream and creating a vertically integrated production mode, it can form synergy with the original business of the enterprise, accelerate the reaction speed, enhance customer stickiness and improve the overall profitability.

　　 (4) extend the industrial chain to the downstream brand retailing. 。 Through internal incubation or external acquisition brand, from simple production enterprises to brand manufacturing enterprises, the added value of brand retail links is relatively high. Textile manufacturing enterprises extend to the downstream to connect manufacturing industry chain resources and downstream market demand, and at the same time, combine capital advantages to lay the foundation for building strong brands.

Author: Chen Peng, senior partner of Beijing University