BeaverLake6 Report is pleased to provide an exclusive interview with Li Lingshen, Ph.D., Vice President of the China National Textile and Apparel Council, and President of the China Nonwovens & Industrial Textiles Association, the overseeing organization for the technical textiles industry in China. President Li is also the former president of China Textile & Apparel Press.
China has emerged over the last decade as a global leader in both importing and exporting technical textiles. My interview with President Li covers a range of subjects, including the recent tariff and trade issues between China and the United States, the maturing of the China domestic industry, and the major challenges facing the industry's future.
BeaverLake6 Report: Thank you for agreeing to this interview. Let’s start with the role of CNITA. What is the organization’s purpose? How many companies do you represent? Do you represent not only technical textile industry suppliers like fiber producers and material manufacturers but also the company’s which make end products such as those making filtration products, automotive and tent makers?
President Li Lingshen: China Nonwovens & Industrial Textiles Association (CNITA) is a social intermediary organization which is comprised of enterprises, institutions, and relative associations in the field of nonwovens and technical textiles. CNITA serves as a bridge between enterprises and government. The organization complies with laws and regulations to preserve the rights and interests of its members, providing services such as consultation, argumentation, diagnosis, identification, new technique promotion, and training.
CNITA has more than 1,000 members, including textile raw material producers, equipment suppliers and terminal product manufacturers and other related research institutes, forming a complete industrial chain. The service areas of CNITA cover 16 major end-market areas such as medical and hygiene textiles, filtration and separation textiles, geotextiles, safety and protective textiles, building and construction textiles, canvas and tarp textiles, and transport textiles.
BL6: What are the new opportunities happening in the industry?
President Li: Overall, China's industrial textile industry has embarked on the fast track of strategic development and has gradually become an important component of the national strategic emerging industry and diversified high-tech industries across many fields. National policies, expanding domestic demand markets in application areas, and overseas market expansion have all provided new opportunities for the development of the industrial textile industry.
With the continuous advancement of the military-civilian integration development strategy, the development of the military-civilian dual-use textile industry has ushered in major policy opportunities. The military-civilian integration development strategy will accelerate the mutual transformation of military-civilian products and technologies and create an unprecedented ecological environment for the development of military-related textiles.
The ever-expanding domestic demand market, such as infrastructure construction, rapid development of strategic emerging industries, improvement of eco-environmental awareness, full implementation of the two-child policy and development of healthy pension industry, will provide continuous growth for industrial textiles.
In addition, the in-depth promotion of “the Belt and Road” and “China-Africa Cooperation” as well as the demand for high-end industrial textiles such as medical and hygiene, structural enhancement and safety protection in major developed countries and regions will provide new development opportunities for China's industrial textile industry.
BL6: The US is one of the largest markets for China technical textiles. The US/China trade dispute with tariff implementation will certain cause market disruption. What impact to you see on the China domestic industry? Are you seeking new markets for products which would normally be exported to the US?
President Li: According to the data of the General Administration of Customs, Asia is the largest export area for China’s industrial textiles, followed by North America and EU. By country and region, the United States remains the largest importer of China’s industrial textiles, followed by Japan, Vietnam, South Korea and India in Asian countries. In recent years, exports of industrial textiles of China to Vietnam and India have grown rapidly. In addition, Hong Kong, Germany, Indonesia, Russia and the Philippines are also important markets. The exports of these countries and regions accounted for 51% of the total.
As domestic industrial textile enterprises have been deployed overseas, Sino-US trade friction is not enough to cause a comprehensive impact on the industrial textile industry, and the impact is still within an acceptable and digestible range. China's industrial textile exports to the United States may decline due to tariff increases, but we have also taken corresponding measures.
First, under the national “the Belt and Road” initiative layout, the industry accelerates the pace of global distribution. Among more than 60 countries along “the Belt and Road”, a large part of Southeast Asia, South Asia, Eastern Europe and North Africa are emerging economies or developing countries. The potential demand and purchasing power in these countries and regions cannot be underestimated. According to statistics, in 2017, China’s textile exports to the “Belt and Road” countries increased significantly faster than those of other countries.
The second is to accelerate the high-quality development and the progress of structural adjustment of China's industrial textile industry and deepen the domestic market. With the rapid development of China's economy, domestic demand for industrial textiles will continue to increase.
The implementation of these measures will alleviate the reliance on the US market and the impact of US-China trade dispute.
BL6: The domestic industry is maturing with rising costs for labor, raw materials and textile-making machinery. Do you see more Chinese companies investing in other countries where costs can be lower such as Vietnam, Indonesia and India?
President Li: The increase in domestic labor, land, raw materials and other costs has exceeded the increase in productivity, and the transfer of domestic textile industry to countries with relatively low cost is the general trend. The
manufacturing base layout pattern of China combined with neighboring countries (focusing on Southeast Asia and South Asia) maintains and enhances the international leadership of China’s textile industry.
In addition to cost factors, there are trade reasons for the transfer of the domestic textile industry to neighboring countries. First, it can cope with certain trade protection measures in countries such as Europe and the United States. The second is to circumvent trade barriers, directly organize production and complete sales in the local area, thereby saving tariffs set by customs of the two countries. The third is to enjoy special trade policies.
At the same time, domestic enterprises investing in countries with lower costs have a greater role in promoting local employment, economic development, and technological progress, and China's mature textile industry will also provide successful examples for local industrial development that can be imitated and used for reference.
At present, China's textile industry has entered a new stage of transnational layout, and overseas investment has shown an acceleration trend of multi-regional, multi-industry and multi-form. At the same time, the strategic goal of the transnational resource allocation of the textile industry is to achieve global integration of the industrial chain and global breakthrough of the value chain by international layout.
BL6: What are three areas of concern which are challenges to the growth of the domestic technical textiles industry?
President Li: The three major challenges of industrial chain linkage, standard formulation and industrial concentration limit the development of China's industrial textile industry.
Industrial textiles can almost infinitely replace other products. For example, wet wipes can replace hand towels, soft containers made of structural reinforcement material can replace metal containers, nonwoven fabric insulation material can replace plastic film, etc. However, industrial textiles must rely on the linkage of the industrial chain to discover and develop demand. Therefore, one of the key tasks of the industry in the future is to integrate the advantageous resources of the entire industrial chain for industrial use and to promote the development of the industry efficiently.
Standardization is of great significance to social practice such as economy, technology, science and management. Only by formulating, publishing and implementing standards can we achieve the best order and social benefits. Industrial textiles are closely related to many industries such as construction, transportation, sanitation, environmental protection, aerospace, etc., and every industry has its standard. If industrial textiles are to be accommodated by downstream industries, they must be in line with the standards of downstream industries, and the standards for industrial textiles need to be formulated. The development of standards can benefit both users and the industry, and the industry can develop healthily when there are standards.
The size of industrial concentration determines the research and development capability and competitiveness of the entire industry. Compared with apparel, textile machinery and chemical fiber, the industry concentration of industrial textile industry is not high. Under such circumstances, the research and development capability of industrial
enterprises is not strong. Most companies adopt imitation strategies and follow-up strategies, and it is difficult to take an original path of independent innovation. Many of the difficulties we encountered in promoting the development of industrial textiles were indeed caused by insufficient industrial concentration, which will inevitably lead to the lack of overall competitiveness of the industry.
Click here to view the complete technical textiles events calendar that includes show information links.
BeaverLake6 Report is pleased to provide an exclusive interview with Li Lingshen, Ph.D., Vice President of the China National Textile and Apparel Council, and President of the China Nonwovens & Industrial Textiles Association, the overseeing organization for the technical textiles industry in China. Click here to read the interview.
IFAI Expo 2018 was the first show under IFAI's new CEO/President Steve Schiffman. In a quick conversation on the first day, Mr. Schiffman thought event attendance was on target with the expectation of a 500 increase over the 4500 total participants (counting both exhibitors and visitors) they had in 2017 in New Orleans. Similarly, a conversation with one of the managers of ACMA, a partner in CAMX, said their pre-registration had already topped the 6500 they had last year in Orlando. (Keep in mind, though, the 2017 CAMX show had to be rescheduled from September to December because of Hurricane Irma.) Click here to read more about the shows. Posted October 19, 2018
Positive Reviews but Still Uncertainty. On November 16, 2018, two of the US textile industry associations testified before the US International Trade Commission (ITC) in a special hearing to determine the economic impact of the proposed United States-Mexico-Canada Agreement (USMCA). The leaders of the American Apparel & Footwear Association (AAFA) and the National Council of Textile Organizations (NCTO) provided statements on how they feel the new agreement will affect their member companies.
The two organizations clearly have different biases; however, in looking over the AAFA and NCTO statements, it appears to me that while the organizations both clearly said they were not offering an endorsement yet of the agreement, they gave general overall approval for USMCA, acknowledging the 1992 North American Free Trade Agreement (NAFTA) needed updating. Both organizations are taking a wait-and-see attitude to more fully look at how the agreement impacts the complex supply chain of textiles and apparel. [Click here to continue.]
Posted November 21, 2018
NAFTA Replacement Agreement Negotiated. On October 1, President Donald Trump announced the US, Mexico and Canada had reached an agreement whichreplaces the North American Free Trade Agreement (NAFTA) that went into effect in 1994. The new United States-Mexico-Canada Agreement (USMCA) contains provisions and language that has an impact on the technical textiles industry; the most important are 1) a special section covering textiles and apparel and 2) rules of origin that will require 75% of automotive content (under NAFTA 62.5%) be made in North America. Mexico and Canada are the two largest importers of US made technical textiles and the automotive industry is the largest intended end market of these technical textiles. Click here to go to the United States Trade Representative's website and read the "Textiles and Apparel Goods" chapter. Posted October 3, 2018
Are you looking for a quick understanding of the China technical textiles industry? Through our special relationship with China Nonwovens & Industrial Textiles Association (CNITA) and their China Textile publication, BeaverLake6 Report is pleased to post the English-translation of the recently issued "Status Quo of China's Nonwovens and Industrial Textiles Industry, 2017." The report covers the different levels of the industry, geographic export demographics, and forecast the needs in the major end market applications. Click here to read the report in our China Textile website section. Posted June 18, 2018
I am pleased to announce the second part of my report 2018 State of the U.S.Technical Textiles Industry has been published by Textile World magazine.
This first part features a general industry overview, plus an evaluation of the status and impact of US trade positions.
The second part, featured in the April/May issue will cover major end markets for technical textiles such as automotive and military.
Click here to go to the Textile World website to download a copy.
Steve Warner, Publisher
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