by Eugene Gerden
The technical textile and industrial fabrics industry in China may receive a massive impetus for further growth this year, thanks to the recently announced plans of leading local producers and the national government, who are working to create a significant increase of exports in this market. At present, China remains the world’s leading producer of technical textiles and industrial fabrics, with a global market share of 30 percent. Specialty textiles’ share of overall light industry in China is estimated at 20 percent, in terms of both volume and value.
Currently, about 90 percent of the Chinese annual domestic production has been sold within the country, with only 10 percent being shipped as exports. This situation helped to prevent the rapid growth of the industry, and has been one of the main obstacles for more active development.
The ongoing stagnation of the Chinese national economy, however, caused in part by the recent trade wars with the United States and the devaluation of the yuan, may result in a change in the current balance in the market.
Supply and demand
The economic decline, which has been taking place in China since 2013–2014, has already led to decreased demand for industrial fabrics and technical textiles from some major domestic markets, and has forced textile manufacturers to consider alternative markets and global sales.
For Chinese producers, the situation is also complicated by the fact that, so far, a significant portion of domestic textile production has been heavily subsidized by the state, which has sparked serious criticism from the United States and other Western countries about what is perceived as unfair advantages provided to the Chinese technical textile industry, both in domestic and global markets.
The cessation of trade wrangling between the U.S. and China, currently being discussed by both sides, could result in a significant cut of further state subsidies to the Chinese technical textile industry, and lead to a decline of profits for local and domestic manufacturers. For this reason, many leading Chinese industrial fabrics producers are considering transferring at least part of their sales to foreign markets. Implementation of these plans will be also part of the state strategy in China to diversify the national economy through an increase of exports of manufactured goods. In the case of technical textiles, part of the state plan begins with exporting up to 25 percent of the annual domestic output.
As part of these plans, particular emphasis will be devoted to increasing exports of fabrics used in the production of medical textiles and products. Medical textiles are currently experiencing the biggest demand in China’s industry, and already account for a significant portion of the country’s textile exports to countries in Europe and the Americas.
The growth in production of medical textiles occurring in China in recent years was mainly a result of the growing need for more effective sterilization, sanitation and protection against bacteria in health care settings. There is an increasing use of medical textiles in biophysical monitoring systems, patient tracking devices and other innovative applications in the Chinese health care industry.
Exports of fabrics intended for use in the construction, civil engineering and architectural industries will be also increased.
The United States is currently the largest market for industrial textiles manufactured in China. In 2018, the export value amounted to US $3.74 billion, an increase of 7.09 percent over the past year. Japan was the second largest market for textiles from China, but exports to Japan have decreased by 3.12 percent during the same period.
Some emerging regions are being targeted by Chinese manufacturers and the government—especially Africa, where the presence of Chinese businesses, including textile manufacturing, has significantly increased in recent years. Of special interest are parts of southeast Africa, particularly Zambia and Tanzania, which are considered potential sites for production facilities, operated by Chinese capital.
Challenges to growth
According to the latest data from the Chinese Ministry of Finance, the domestic production of industrial fabrics continues to grow at an annual rate of 7–8 percent. The industry currently employs about 60 million people, with the Guangdong Province (the most populous province in the country, located on the South China Sea Coast) a center of production. In the case of geotextiles, most of the Chinese production is currently concentrated in the Lingcheng district (located in Dezhou City, Shandong Province), with more than 10 billion yuan of main business income and 0.82 million tons of geomaterials produced in 2018.
Additional pressure is being put on Chinese manufacturing by the ever-tightening ecological restrictions in China, which are especially relevant for the technical textiles sector. According to the Chinese Ministry of Finance, the technical textiles industry is one of the top five polluting industries in China, and it regularly attracts increased attention from local regulators. Leading Chinese textile manufacturers are increasing investments in environmentally friendly production technologies to avoid government penalties (or closures).
In addition to efforts to expand the growth of exports, the Chinese national government is moving to facilitate the acceleration of R&D activities in the industry. Unlike other nations such as Russia, China has never had a strong scientific investment in the field of industrial fabrics and technical textiles; most of its developments in this field were copies of some Western products.
According to an official spokesman of Liu Kun, China’s Minister of Finance, that siutation could change soon. Reportedly, despite the ongoing stagnation of the Chinese national economy, there is a high interest from local producers for the establishment and expansion of R&D activities in the field of textile innovation. Liu Kun says, “In an era of economic turbulence, only those enterprises that are focused on the implementation of advanced ideas and technologies could survive.”
One area of commercial interest is in multiaxial technical fabrics (textiles used as a basis for composite materials), which remains probably one of the most promising segments of the Chinese textile market, attracting interest from from both local investors and producers.
The Chinese Ministry of Industry and Information Technology estimates the current demand for multiaxial fabrics in China is about 400,000 tons per year, with an annual growth rate from 20 to 25 percent. Further research will focus on fire-resistant and other safety fabrics; the volume of investments from Chinese business in this area already exceeds US $150 million.
In a recent report, the Italian Trade Commission estimates that there are approximately 2,500 technical textiles companies in China, with a ratio of domestic to foreign companies of 4:1. An internal push for textile exports is likely to have a significant impact on global trade in this industry.
Eugene Gerden is an international freelance writer based in St. Petersburg, Russia.
The U.S. trade deficit with China was $419 billion in 2018; U.S. exports to China were $120 billion while imports from China were $540 billion.
The biggest categories of U.S. imports from China were computers and accessories, cell phones, and apparel and footwear. (Many of these imports are from U.S. manufacturers that send raw materials to China for low-cost assembly. Once shipped back to the United States, they are considered imports.) China is currently putting more emphasis on exports of technical and industrial fabrics.
China’s biggest imports from the U.S. are commercial aircraft, soybeans and autos. In 2018, China canceled its soybean imports after President Trump imposed tariffs on Chinese steel exports and other goods.