CHINA'S burgeoning textile industry will come under the spotlight at the Guangzhou Trade Fair. The mainland's textile exports grew by 20 per cent last year, and the industry is China's biggest foreign exchange earner. In 1991, China produced eight million tonnes of textile grade fibre. Its exports of textiles in 1992 were valued at US$24 billion. These are heady figures for a nation that was struggling with clothes rationing less than 10 years ago. The exports have contributed to China's economic growth over the past years, and played a major role in boosting its total exports last year by a massive 18.2 per cent. The industry has grown up along the coast and has taken full advantage of the benefits of the Special Economic Zones to expand. Hongkong has played an important role, particularly in Guangdong. Nearly two-thirds of China's garment manufacture is linked to Hongkong companies. Despite these impressive statistics, the industry still has problems. Poor quality products, and the post-Tiananmen political backlash led several countries to reduce, or cut off, trade with China and to source from other countries, particularly Taiwan and Pakistan. In addition, slow and unreliable delivery schedules discouraged customers from placing too much faith in regular orders. The Chinese Government is aware of the problems and is trying to overcome them. In 1989 and 1990, growth in the textile industry was less than two per cent. China's major market in 1990 was the United States, and one-eighth of US textiles were imported from China. A lack of raw materials, particularly cotton, wool and, to a lesser degree, silk, hampers further expansion and will continue to do so for several more years. The eighth five-year plan has put great emphasis on the textile industry, and is looking to foreign investment to help overcome some of the problems. Currently, China has more than 1,000 textile companies producing medium and high grade textiles for export. Overseas investment in these companies is estimated to be US$1.25 billion. It is expected that the investment will enable the companies to take advantage of the latest technology. The Shanghai Municipal Textile Bureau is looking for foreign co-operation in more than 160 projects, ranging from dyeing, knitting and garments to chemical fibre and textile machinery. The bureau is asking for co-operation because the industry is short of funds and lacks technology. It is hoping the co-operation will take the form of investment and technical co-operation. Jiangsu province is in the same position. Last month, it announced measures to promote its textile industry which include six Sino-US ventures that will acquire equipment and technology. Taiwan has also invested in China's textile industry: 22 per cent of Taiwanese investment is in textile-related projects. Textile machinery drastically needs improvement throughout China. A survey of the industry shows that only 20 per cent of textile machinery is up to date, and, out of 800 textile machinery factories, fewer than 40 produce modern equipment. This weakness is being tackled in two ways. The government is offering loans totalling 3.5 billion yuan (about HK$4.7 billion) to fund 648 projects this year, an increase of 20 per cent over last year. The loans are to improve textile machinery, primarily in export companies and major government-owned textile production houses. In addition, dismantling of old machinery is in hand, and new equipment has been bought from Swiss, German, Italian and Japanese companies. Hongkong companies account for two-thirds of China's foreign investment, which often takes the form of a swap of machinery for garments. China Resources Textile Company, primarily in the import/export agency business, has invested in more than 20 mainland joint ventures using advanced computerised equipment. It has also introduced the latest yarn-testing equipment from Italy and Switzerland. China Resources Textiles Company is the sole agent for nearly 100 enterprises in China.
