During the January-August period this year, growth of China's imports of yarns and fabric from the EU, the United States, the Association of Southeast Asian Nations, India, Thailand and Viet Nam all surpassed 10 percent. At the same time, China's imports of textile machinery from the EU surged 30 percent year-on-year, 19 percentage points higher than last year. The imports of textile machinery from Japan grew 27.5 percent.

According to Gao, China's textile industry provides cheap but good textiles to consumers in developed countries, especially to those with low incomes. Figures from U.S. Department of Commerce indicated that in 2006, the average unit price for textiles imported from China was $1.45 per square meters while that from the rest of the world was $1.79 per square meter. Every square meter of textiles the United States imported from China saved $0.52 for U.S. consumers and $9.68 billion for the whole year.

Time to upgrade

Competition based on low added value and low profits means many Chinese textile enterprises have been losing money.

Figures from the CNTAC show that only 40 percent of China's textile enterprises show a profit, while the other 60 percent break even or fail to make a profit.

The MOFCOM, the NDRC and other related government departments are calling on textile exporters to speed up the transformation of the industry. "Chinese textile exports should abandon the focus on quantity alone," said Gao.

In fact, some enterprises had already noticed the crisis, becoming aware that the OEM pattern of low added value and low technology could not bring in more profits and would lead to accusations of dumping.

A kind of cotton quilt that can be washed repeatedly attracted attention at the 2007 China (Shaoxing) International Textile Expo held on October 21-24. The quilt, made of specially processed ultra-long cotton fiber, compares favorably with down-padded quilts in terms of warmth and durability. Even after repeated washing and drying, it still retains its fluffiness. This cotton quilt was produced by Shaoxing Oumeiya Textile Co. Ltd. (SOTC), after four years of research.

SOTC was once only a factory that processed materials according to samples provided by clients from home and abroad. Although it still does this, independently developing new products has been its most recent focus.

Two years ago, the Chongqing No.3533 Printing and Dyeing Garment Factory developed 75 varieties of battle fatigues and fatigue materials suitable to different terrain and weather such as sea, desert and forest. These products, with high technology content, can resist fire, infrared rays and ultraviolet radiation. They have been exported to the United States, Russia, France, Germany and other countries.

The Chongqing Kunlang Trading Co. Ltd. developed a kind of wood fiber towel that is antiseptic and deodorizing and has a long service life and high water-absorbing capacity. It has been ordered by companies from Europe and the Americas.

Such products of high technology content are in high demand abroad and bring profits without worries over dumping charges.

At the China Textile Innovation Conference held on October 30 in Shanghai, 23 companies were awarded for product development contributions.

However, not many textile enterprises are in transformation on the whole. Less than 10 percent of the total are in the process of upgrading to higher technology products. Less than 1 percent are focusing on improving the technology content of their products and developing independent brands. Most enterprises are simply maintaining the pattern of production of low-added value products.

In Gao's opinion, if these enterprises want to survive, they must strengthen adjustment of their product mix, promote innovation of textile technologies and equipment, develop energy-saving technology, create differentiated and environmentally friendly products and increase labor productivity. More importantly, they must nurture independent brands of international influence.

"Textile enterprises can actively promote international operations by setting up factories abroad in order to utilize both domestic and overseas resources and markets to increase their own market influence and improve the position of the Chinese textile industry in the global industrial chain," Gao said.