By Kate WoodardThe Guardian’s Chinese-language business reporterChina’s glass-clothing factories are under pressure after being hit by the steep rise in imports from the US, where production is concentrated in California.
The Chinese state-owned enterprises that manufacture cloths have been struggling with falling demand for their products, as the cost of producing in China has soared to more than $8,000 (£6,800), from about $2,000 in 2013.
Glass manufacturers have been losing their business to other Chinese manufacturers that are cheaper to produce and sell in China.
A growing number of Chinese factories are now producing the clothing made from the cloths of foreign companies, and have become more competitive, says a report by the Beijing-based consultancy Grew, citing data from the state-run Xinhua news agency.
But the rise in production also meant that they are facing pressure from foreign companies and governments that want to expand their presence in China and sell their goods in Chinese markets.
The number of foreign factories that make clothing in China increased by 17 per cent between 2013 and 2020, according to the report.
It said that while most of those factories are located in the southern part of the country, they are also operating in other regions, including the west, central and western provinces.
They are also becoming more dependent on local partners, the report said, and they need to compete with local firms and industries.
But they face growing pressure from China’s government, which has intensified efforts to regulate the country’s textile industry and imposed a number of restrictions on imports from foreign countries, including by restricting the export of certain textile products.
The government has also been clamping down on foreign companies that sell their cloths in China, restricting their supply chain and making it more difficult to source cloths domestically.
This has caused the cost to manufacturers of the fabric of clothing to rise by up to 15 per cent since 2014, according the report, with the total cost of cloths at over $6,000 a kilogram.
Grew said that this meant that China’s cloth industry was becoming more reliant on foreign firms to grow.
However, the growing competition and high cost of imports meant that some of the factories were now having to sell their fabrics overseas, with many losing their ability to export to other countries, it added.
“While the impact on the sector is substantial, it is important to remember that there are still a number [of foreign] factories that are still operating in China,” Grew said.
“China’s economy is not yet completely self-sufficient and its textile sector is a critical part of its economy.”
For now, it will likely remain a highly dependent sector in China.