On entering a Columbia shop in Beijing to purchase a wind jacket for herself, Xiao Wanzi found that almost half the products in the shop were made in China. They were not, however, branded, marketed and designed in China.

For years, although the Chinese garment industry has gained a pivotal place in the international industrial chain, it is not the largest beneficiary. A China-made shirt sold on the world market currently brings only a 20-percent profit to the factory that produced it. The rest of the profit goes to designers, retailers, marketers, distributors and wholesalers-mainly abroad.

It's a dilemma leaving some in the garment industry wondering if they're at the wrong end of the chain.

Out of the loop

Over the past few years, domestic textile enterprises have not only seen their profits dwindling, but also have to come to terms with soaring costs. Raw material and transportation costs increased by 10 percent, while labor costs grew by 15-20 percent in the first half of 2005, according to statistics from textile and garment associations in Zhejiang and Fujian provinces.

These soaring costs may lead textile producers, who no longer taste the profits of mass-producing and exporting their garments, into the largely untapped market of domestically produced higher-quality and high-end garment brands, said Chen Guoqiang, Deputy Director of the Industry Economy Research Center under the China Garment Association.

Other Asian developing countries, such as India and Bangladesh, have lately shown an increased competitive edge in textile and garment 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 Chinese Ministry of Commerce.

Economic pressures are driving Chinese textile manufacturers to create their own global fashion brands as they aim to offset stiffer competition and the higher costs of labor, energy and transportation. Some Chinese fashion brands, such as Jifen and Exception de Mixmind, have opened their overseas market and been well accepted.

A hard road to sew

Yet it can take decades to build a major fashion brand. Currently, most Chinese garment makers sign contracts with foreign-owned clothing labels to supply products of that label's own design. This leaves them little room to develop, pool their creative resources and invest in the construction of their own high-profit brands.

Moving forward in the world garment industry will require creativity from Chinese producers in order to develop and market their own international trade brands, said Sheng Jingsheng, President of the Romon Group, a textile producer in Zhejiang Province.

Outside of Hong Kong, garment makers on China's mainland have had little experience building major fashion brands. According to Keith Brosnan, senior account planner with Launch Advertising in Shenzhen, the trend among Chinese manufacturers has been to export own-brand products to less brand-conscious, yet highly price-conscious, markets like Russia, Africa and the Middle East. These products, however, lack Chinese brand names. Brosnan believes that until there's a well-known Chinese designer or a China-owned international retail outlet, garments with recognizable Chinese brand names will continue to comprise only a small fraction of exports.

People do see a growing interest in design among Chinese manufacturers, however. Twenty-some years ago, design schools were a foreign concept in China. Now there are over 450 design schools and design houses, churning out the potential "creatives" for what could one day become a burgeoning design industry. Chinese designers are known to inject traditional and cultural elements into their designs-especially within the fashion arena-a possible marketing angle for future Chinese brands internationally.

"It's gratifying that Chinese garment brands and designs are gradually being accepted by the international market, but compared with garment powers such as Italy and France, the Chinese garment industry still has a long way to go," said Jiang Hengjie, Executive Vice Chairman of the China Garment Association. "The gap lies not only in clothes, but also in the input in advanced equipment used in production, all the way down to the characteristic creations of designers, as well as marketing and brand strategies."