China's textile producers say developing their own clothing labels will help offset stiffer competition and higher costs for labor, energy and transportation.   

Chinese garment makers still lag far behind in developing their own brands of clothing, said Sheng Jingsheng, president of Romon Group, a leading textile producer in Zhejiang Province.

"At Romon, for example, we top all domestic garment producers with 5 million suits exported annually but only several thousands of them were domestic brands exported to the United States," Sheng said.

Chinese garment makers usually sign contracts with foreign clothing labels to supply products of the later's own design.

Moving forward on the world trade stage will require Chinese garment produces to be more creative and develop and market their own international trade brands, said Sheng.

Competition between Chinese textile producers is also on the rise as earlier this month they dramatically bid up the minimum price on 21 categories of textiles that gives the winners a specified quota to export to the United States.

Almost 30,000 qualified textile enterprises in China tendered bids for the quota. The final prices on most textile categories were much higher than expected when the results were released by the Ministry of Commerce.

The competition was especially fierce because some categories of textiles were blocked from entering the United States for six months. While the trade embargo on Chinese textiles to the United States dampened growth in the Chinese industry, insiders also blame the lack of quality Chinese brands.

Yet the bid results likely indicate an end to China's low-priced textile exports as local textile producers are also facing stiff international competition, insiders said.

Other developing countries, such as India and Bangladesh, are showing an increased competitive edge in textile and garments exports.

China's textile exports to the United States have grown by 32 percent since January 2005, while India and Bangladesh saw growth rates of 34 percent and 20 percent respectively, according to the latest figures from the Ministry of Commerce.

Domestic textile enterprises also have to come to terms with soaring costs. Raw textile materials and transportation costs increased by 10 percent and labor cost by 15 to 20 percent in the first half of 2005, according to statistics from the textile and garments associations in Zhejiang and Fujian provinces.

This may indicate that textile producers will no longer see huge growth by exporting larger and larger quantities of foreign labels but the market has not yet been fully tapped for higher quality garments, said Chen Guoqiang, deputy-director of the industry economy research center under China Garment Association.

Increased global competition could help China's textile and garment industry to build elite brands by improving product quality, said Hong Zhaoyi, general manager of Qipai Group, or Seven Brand Group, a leading men garment producer in Fujian Province.

After seven rounds of talks between the United States and China in November, a major obstacle to bilateral trade was cleared by signing a three-year agreement on textile trade that imposes quotas on Chinese textiles.

The agreement provides for a progressive increase in imports of major textiles and apparel products from China -- by 10 to 15 percent in 2006, 12.5 to 16 percent in 2007, and 15 to 17 percent in 2008.

Thirty percent of the agreed quota next year will be distributed through public bids, according to the Ministry of Commerce.

(Xinhua News Agency December 20, 2005)