Where Is The Way For The Textile Manufacturing Industry To Gradually Upgrade The Sino US Trade Friction?

Since 2018, Sino US trade frictions have gradually escalated. As one of the important industries of domestic trade with the United States, the export of the textile and clothing industry has been seriously affected by the tariffs imposed by the United States. The proportion of textile and clothing imported by the United States from China declined significantly, while the growth rate of imports from India, Vietnam, Pakistan and other countries increased significantly. The Sino US trade friction accelerated the transfer of textile and clothing orders to other countries. Of course, from the perspective of the history of global textile industry changes, it is a general trend to transfer the production capacity and upgrade the industry in the textile manufacturing sector, while the current trade environment only accelerates this process.

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

Judging from the previous process of global textile industry center transfer and value chain reconstruction, The industrial technological revolution is the basis for the formation of the world textile manufacturing center. The textile production of the small family workshop model was replaced by the mechanized factory in the industrial revolution, and the country that first mastered industrial technology - Britain became the world's textile manufacturing center for the first time; Cost factors (raw materials, labor, etc.) have become the main driving factors for the transfer of world textile manufacturing centers. The United States became a textile manufacturing center in the early 20th century due to its rich cotton raw materials and immigrant population. From the second world war to the 21st century, textile manufacturing centers from the United States to Asian countries, mainly due to differences in labor costs; Exchange rate factors and trade environment factors accelerated the transfer of the textile industry. Japan and other Asian countries developed rapidly in the textile industry, and the trade surplus gradually increased. Developed countries led by the United States blocked textile exports through exchange rate, trade restrictions and other means, and promoted the transfer of textile manufacturing industry to other underdeveloped countries and regions.

　　 In the whole industrial chain of textile and clothing, the labor intensive garment manufacturing link is at the bottom of the "smile curve", with the lowest added value. The design research and development in the upstream of the industrial chain and the brand marketing in the downstream have higher added value. The development process of textile industry in various countries includes: developing low value-added manufacturing links → extending the industrial chain upstream and downstream → transferring low value-added links → strengthening R&D design or brand retail and other high value-added links. It can be seen that the gradual transformation from low value-added product manufacturing to downstream brand retail or upstream R&D design has improved the country's position in the industrial chain and strengthened its comparative competitive advantage.

　　 The future development of China's textile industry is bound to continue this trend, transfer low value-added links, and extend from low-end textile manufacturing to high-end manufacturing and upstream and downstream industrial links Therefore, in the process of the global textile and clothing manufacturing center gradually transferring from China to Southeast Asia, in order to make full use of the technical strength and management experience accumulated for many years in the process of industry change and value chain reconstruction, strengthen competitiveness, and enhance China's position in the industrial chain, the main development directions of domestic textile manufacturing enterprises in the future include:

　　 (1) Follow the industrial development trend and layout overseas production capacity Make use of the raw material and labor cost resource advantages and preferential policies of Southeast Asian countries to enhance the competitiveness of products 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, which makes the cooperation between upstream and downstream enterprises more convenient and helps reduce the circulation costs of raw materials and products. The increase in the proportion of production capacity in Southeast Asia has not only enhanced the profitability of each company, but also enhanced the market competitiveness of each company and its ability to resist risks when the international trade environment deteriorates.

　 (2) Use the technology and management experience accumulated in the textile industry for many years to upgrade production equipment and promote the automation process On the one hand, it can reduce the labor cost in the production process and improve efficiency; on the other hand, it can improve the product quality, transform from the low-end product manufacturing to high-end product manufacturing, improve the added value of products, and meet the ever-changing consumer demand of the market.

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

　　 (4) Extend the industrial chain to downstream brand retail Through internal incubation or external acquisition of brands, the transformation from a pure production enterprise to a brand manufacturing enterprise has a high added value in the brand retail link. The extension of textile manufacturing enterprises to the downstream can connect the manufacturing industry chain resources and downstream market demand, and at the same time, combine the financial advantages to lay the foundation for building a strong brand.

Author: Chen Peng, Senior Partner of Beijing University Zongheng