As home textiles suppliers around the world brace for a flood of Chinese-made product following the 2005 quota drop, Chinese suppliers are also scrambling to prepare themselves for the tumult of unencumbered trade.
They anticipate cutthroat price competition as the little fishes of the country’s industry contend with China’s dragons — the handful of large, quality-conscious producers that are working to establish themselves as stable global resources. Many believe consolidation is inevitable. Along the way, suppliers will need to shift their focus from chasing growth at all costs to profitable growth.
Many Chinese home textiles mills see both opportunities and challenges in the forthcoming abolition of the quota system.
Xie Zhichun, marketing manager of the Shanghai Worldbest Hometex (Group) Co., Ltd., welcomes the abolition of the quota system. With the elimination of the quotas, he said, his company — which manufactures bedding, curtains, tablecloths and garments — will have more opportunities to expand direct sales to the world market, including the United States. Meanwhile, he noted, countless small and medium-sized mills may take advantage of open trade to expand their exports by using cut-throat prices, creating chaos for all producers.
Still, Chinese home textiles manufacturers have been busy making preparations.
Worldbest Hometex, established in 1993 under China Huayuan Group, the country’s largest textiles group, has invested heavily to upgrade existing production equipment while building six major production bases outside China — in Thailand and Africa. The company has also invested $48 million to build a home textiles park in East China’s Zhejiang Province.