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Chinese Garment, Textile Industry Sees Slowest Growth in a Decade

It’s been a tough year for the Chinese textile and garment industry. Challenged by increased competition from countries with lower labor costs–notably India and Cambodia–coupled with a decrease in international demand and inconsistent cotton prices, the sector’s formerly supersonic growth has slowed to a crawl.

According to China Daily, China’s textile and garment industry saw its slowest growth in over a decade. Average garment sales, polled from 100 of China’s biggest retailers, increased only 2% in 2012, compared to nearly 5% in 2011. Sales values rose 12%–impressive, until you consider last year’s 20% rise.

Industry leaders–designers, manufacturers, and lawmakers–now stress the need for innovative design, if China continues to compete with its Asian neighbors. Gianni Zhang, Hwa Yi Fashion Group’s president, told China Daily that the industry’s traditional business model, which focuses on manufacturing, rather than design and brand building, needs to be reversed.

Marjorie Yang, chairwoman Esquel Group, a Hong Kong-based cotton shirt producer, echoed Zhang. She told the newspaper that Esquel has partnered with the Chinese Academy of Sciences to research new dyestuff, and predicted that companies continuing to focus on production will struggle to remain competitive.

Zhang Xiaoji,  director-general of foreign economic relations at the Development Research Center of the State Council, pointed out that despite higher labor costs, China does retain a major advantage over countries like India and Cambodia: a highly developed industrial chain, and continued investment in new production technologies. “We are getting closer to US and European levels,” he said.