Quota elimination at the end of 2004 will trigger a major
restructuring of the global textile and clothing industry from which
China will be the main beneficiary. The world's buyers now have
greater access to China's low price garments and will shift more
orders to the country. Many predict that China's share of US and EU
clothing imports will double or even treble in the next five years.
91% of respondents in a survey of Chinese summer garment suppliers
were expanding capacity in anticipation of increased orders, and
intended to focus on higher value EU and US markets at the expense
of Asia. New factories are being built and existing factories expanded.
Workers are being hired and machinery purchased. Products with the
highest expected growth rates were said to be men's T-shirts, men's
casual shirts, women's summer dresses, and girls' summer wear.
However, the industry faces major challenges. State-owned import/
export giants are facing competition from producers who can now
deal directly with buyers. Traditional trading firms are buying plants
to cater to buyers who want to deal directly with manufacturers while
offering improved customer service. But producers face hurdles such
as power supply interruptions, skills shortages, rising labour and raw
material costs, and reduced tax incentives. With prices likely to
remain flat, Chinese suppliers will have to add value to their products
if they are to maintain a competitive edge-not only against suppliers
in other low cost countries, such as India, Vietnam and Mexico, but
also against rival domestic manufacturers. | 
