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Shandong: Major provinces of textiles encounter “short board” of clothing

Shandong's textile and garment industry holds the second-largest overall capacity in China, with its cotton production leading the nation. However, when it comes to the garment sector, Shandong lags significantly behind. The province has only a few well-known apparel brands, which limits its global influence. At the "12th Five-Year Plan" Industrial Upgrading and Development Forum held on the 23rd, industry experts and business leaders emphasized that during the "Twelfth Five-Year Plan" period, the Shandong garment industry must break through its current limitations and build national and even international brand recognition. Despite being a major textile province, Shandong's garment industry still faces several challenges. With over 2 million employees in the sector, the province leads in yarn and fabric production, ranks second in worsted yarn, third in printing and dyeing as well as woolen fabric, and fourth in clothing and chemical fiber. Weiqiao Group is not only the largest cotton textile enterprise in China but also the world’s largest in this field. Yet, these impressive figures do not fully reflect the weaknesses of Shandong's garment industry. According to Xia Zhilin, chairman of the Shandong Textile Industry Association, the development of the garment industry in Shandong is lagging compared to other textile sectors. Whether measured by the growth of enterprises above a certain size or by profit, tax, and export growth, the garment industry falls behind. Gu Qingliang, a professor at Donghua University's School of Management, pointed out that the apparel market requires development on both ends. While Shandong can still compete in the low-end market, it is falling behind in the high-end segment, where profits are highest. He noted that China's luxury consumption is growing rapidly and is expected to become the world's largest luxury market within two years. Meanwhile, many Shandong-based apparel companies are still focused on earning low processing fees. As Xia Zhilin explained, while a product might fetch just $20 in processing costs, it could be sold for hundreds or even thousands of dollars elsewhere. This has led to an increase in the number of garment enterprises and output, but not necessarily in profits. During the "Twelfth Five-Year Plan" period, revitalizing domestic demand will be crucial for Shandong's garment industry. Xia Zhilin urged companies to focus more on branding, aiming to move away from the current situation of having little-known labels. He suggested that increasing the value of individual products could boost profitability. Although exporting may seem safer, building a brand domestically involves higher risks, such as dealing with retailers and distribution issues, but it also offers greater potential rewards.

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