Chinese textile firms seek allies in India

Textile firms based in Shaoxing, the textile capital of Asia, are keen to set up manufacturing bases and scout for trading partners in India. A delegation, comprising government officials and businessmen, from Shaoxing County are on a visit to India.

According to Xu Huan Ming, delegation head and secretary of the Chinese Communist Party's Shaoxing County Committee, the objective of the visit is to gauge opportunities in India and explore the possibility of Chinese textile companies using India as an export base.

"We are the largest textile centre in Asia, among the largest in the world. It is natural that we should ally with India, a country with a rich tradition in textiles," Huan Ming told Business Standard in an exclusive interview in Mumbai.

"We want to promote Shaoxing and also see how our businessmen can work with and in India," he said.

Shaoxing, located three hours from Shanghai, houses all the elements of the textile manufacturing chain from PTA to spinning to weaving, printing and garments.

The county produces 4.2 billion metres of fabric annually and has 35,000 sets of shuttleless weaving machines. The county's annual filature capacity is 1.5 million tonne.

Huan Ming said from a Chinese company's perspective, India had an advantage in labour resources both in quality and quantity.

"Moreover, India has a lot of raw material, particularly cotton, which Chinese companies are looking for," he added. The clincher, according to him, was the strong presence of Indian businessmen and traders in Shaoxing.

"We have had very good co-operation with Indian businessmen," he said. Shaoxing incidentally has the largest concentration of Indians in China, many of them having arrived here from once flourishing textile trade centres like Seoul, Taiwan and Dubai.

Huan Ming took over as county secretary a year ago. In his present role, he has administrative responsibilities for Shaoxing. He also appoints the mayor for the county.

Officials accompanying the delegation said India and Shaoxing did $145 million worth of trade in 2006. There are nine representatives of Indian companies in the county and another seven are funded by Indians.

Interestingly, while precise figures are not available, Indian businessmen who have traded with Shaoxing said the textile hub is producing beyond its capacity.

"Overcapacity has prompted Shaoxing's textile companies to explore other markets," they said. Shaoxing County claims to offer over 10,000 kinds of fabrics with about 100,000 customers visiting daily.

The county's GDP for 2006 stood at $5.8 billion with direct exports at $4 billion. Shaoxing ranks in the top 10 of the 2,000 counties in China on the basis of economic strength. "We want to become number one," Huan Ming said.