"The 'new normal' situation implies the reality of slower growth rates ... in China's economy, coupled with spiraling costs that are going out of control," explained Zhang Tao, the secretary general of the Sub-Council of Textile Industry, The Textile Industry Chamber of Commerce.

To counter the sharp rise in production and labor costs, China is also looking around for production sites beyond its shores - migration that typically focused more on apparel than textile production. But in a shift in thinking, says Tao, Chinese companies are looking to set up full manufacturing bases in the markets they wish to serve. Toward that end, Chinese textile companies have been buying up manufacturing assets such as mills in the United States, the most recent one in South Carolina.

This is a reversal of the mass sourcing of textile and apparel production from what was then a low-cost production site more than two decades ago. Textile production in China is no longer profitable for many manufacturers, both international and Chinese, who are turning their backs on China.

Read Full Article