China India Textile Industry PK

Summary: Chinese companies are cutting job opportunities and relocating factories overseas or to regions with lower wages in China. In their report, China's textile industry exported $176 billion in 2007 and directly employed about 20 million workers, but is now facing a slow downward trend.

Chinese companies are cutting job opportunities and relocating factories overseas or to lower paying regions in China. In their report, China's textile industry exported $176 billion in 2007 and directly employed about 20 million workers, but is now facing a slow downward trend.

According to production data from January to February 2008, production increased by 5.7% compared to the same period in 2007, while it increased by 19% in 2007, which is the lower growth rate since 2003. In Guangdong, a southeastern province close to Hong Kong and also a hub of China's export industry, there was a good 11.30% decline in production from January to February this year, partly due to blizzards and the Chinese New Year holiday in February. However, at the same time, demand in the United States and Europe is also declining.

William Lowry, a major purchaser of Chinese clothing and textiles in the United States, said in an interview at a major import and export fair in China in April 2008 that the competitiveness of Chinese products is not as strong.

He said, "I am considering purchasing goods from other countries. China's reduction in tax refunds and depreciation of the US dollar have led to a 20% increase in Chinese product prices compared to the past." Therefore, it is not surprising that according to a recent industrial survey, nearly 50% of China's cotton textile industry wants to switch careers because cost expansion and the appreciation of the Chinese yuan squeeze corporate profits.

Mr. Lowry was unaware that the situation was different from a few years ago. He wanted to purchase cheap textiles from other countries, but in fact, the source of cheap goods would be quite limited. India is also telling its own story. The appreciation of the Indian rupee, soaring fuel costs, and the sharp rise in cotton prices have left Indian textile companies with no escape. They either purchase expensive raw materials for their products or face bankruptcy. For example, MH Textile Factory Co., Ltd. located in Ahmedabad is continuing to raise selling prices by 15-20%, seeking significant cost cutting measures to save the company, including cutting nearly 500 workers.

In addition, MH Textile Factory has reduced the average age of its workforce from 55 to 48 years old, utilizing more cost-effective equipment to save nearly 25% of electricity costs, and transitioning from fully computerized to paperless work environments. Even textile giants, such as Arvind Textile Factory, are actively taking measures to reduce costs.

Now we have entered an unprecedented era of cost reduction, where textile mills adopt innovative technologies to improve electricity efficiency, save fuel, compress labor, and link rewards with net departmental productivity growth.