In February this year, relevant sectors in Shanghai and Chongqing came to an agreement that Shanghai Sanmao Enterprise (Group) Co., Ltd., one of the symbols for "made in Shanghai" in former days with a history of 73 years, would move to Chongqing as a whole, and both production lines and technical backbone crew of the enterprise would be transferred to Chongqing to start production in a new place.

In addition, Shandong Ruyi Woolen Textile Group has purchased the Chongqing Haikan Textile Group, and planned to invest over RMB4 billion yuan in the construction of a 1,000,000-spindle compact spinning production base in Chongqing. Five textile enterprises in Shunde, Guangdong signed agreements in this March to move into the "Textile Industry City in Middle China" in Fuyang, Anhui Province. Ningbo Veken Group has planned to build a textile industry park in Jiujiang, Jiangxi Province, for which Veden Group would head the list to attract investment, and its upstream and downstream manufacturers will also settle down in the textile industry park.

All these phenomena show that China's textile industry is expediting its transfer from east to the middle and western parts of China.

Transfer of industrial layout being accelerated

Statistics also indicate that although the middle and western parts of China are far inferior to the eastern part in terms of investment increment, the growth rate of investment in the middle and western parts has greatly surpassed that in the eastern part. Take for an example the investment in fixed assets that has been completed in China's textile industry during the first two months this year. In the eastern part of China, RMB9.975 billion yuan had been invested in fixed assets, up by 27.5 percent year-on-year; while RMB1.729 billion yuan had been invested in fixed assets in the middle part, up by 105.7 percent year-on-year, and RMB571 million yuan had been invested in fixed assets in the western part, up by 97.1 percent year-on-year. Such provinces and municipalities like Jiangxi, Henan, Sichuan and Chongqing all enjoyed a growth margin of over 100 percent.

Sun Huaibin, a vice director of China Textile Economy Research Center, believed that it was a rational choice for the eastern part of China under the pressure of cost. With the supply of raw materials, labor, energy and land resources in coastal areas becoming tenser while local requirements on the environment are becoming stricter, textile enterprises will certainly transfer to the middle and western parts where costs are relatively lower in order to maintain their comparative advantages.

At present, over 80 percent of China's textile industry is concentrated in Guangdong, Zhejiang, Jiangsu, Shanghai, Shandong and Fujian. Sun believed that in the textile industrial chains, the middle and western parts should take on the labor-intensive part transferred from the eastern part while the eastern part of China should adhere to independent innovation and make great efforts in such fields like brand establishment and R&D.

Structure adjustment being reinforced

What deserves our attention is that although quite a lot of industrial transfers belong to the stock adjustment in the textile industry, more are represented in terms of the increment of investment, which also constitutes one of the reasons why the investment in China's textile industry is maintaining a high growth rate.

It's known that the investment in China's textile industry maintained a growth rate as high as 80 percent in 2003, which then reduced to 30.18 percent in 2004 and 36.22 percent in the first 11 months in 2005 under the national macroeconomic control; however, the growing speed was still relatively high. In the Circular of the State Council on Accelerating the Restructuring of the Sectors with Production Capacity Redundancy recently released by the State Council, the textile industry is listed as an industry with a latent redundancy of production capacity.

However, figures show that the growth rate of the investment in China's textile industry still achieved 38.3 percent in this April, higher than that of textile exports and domestic consumption. Consequently, the textile industry is required to strengthen its resource integration and make great efforts on the structure adjustment.

Sun believes that for the moment, the independent innovation ability of China's textile enterprises still needs improvement and the investment in R&D of the total industry is less than 1 percent of its sales income. High and new technologies and high-end textile equipments are mainly relied on import. Moreover, the abilities of brand designing and independent marketing are weak, and OEM is the main form of product export. The industry integration is sure to make enterprises' advantages complementary to each other and form terraced transfer, thus improving the added values of China's textile products and creating independent brands of international influence, and turning China from "a large producer of textiles" into "a textile giant" finally.

Greater efforts to drive the implementation of policies on industrial upgrading

Recently, ten departments including the National Development and Reform Commission issued a circular requiring to adopt relevant policies and measures to promote the structure adjustment and the industrial upgrading in the textile industry. Under such a background, the industrial upgrading in the textile industry will be accelerated.

At present, what's important is that the Interim Provisions on Promoting Industrial Structure Adjustment issued by the State Council should be strictly implemented, and investment in restricted and backward textile programs should be under strict control or even be prohibited. ; we should speed up the washing out of textile techniques and equipment to be washed out should fall into disuse rapidly while preventing the expansion of low-level production capacity through prohibiting the transfer of such equipment. The improvement of resource utilization rate, saving energy resources and cutting down consumption, and the recycling and development of waste and disused polyester and regenerated fibers should be taken as emphases for the textile industry to develop a recycling economy. Policy supports to cotton research and production should be strengthened with the planting areas of high quality cotton properly enlarged while making efforts to improve the quality and per unit area yield of cotton.