Coastal textile makers get guidelines to move inland for resources

Beijing has drawn up a blueprint for relocating the textile industry away from polluted and crowded coastal provinces in the east in the latest push for sustainable development.

In a directive issued yesterday, the Ministry of Industry and Information Technology urged fabric producers to move to the northwest or central regions to be closer to the sources of cotton and wool and a plentiful supply of labour.

Manufacturers in the coastal regions, which account for 85 per cent of the mainland's industry, must also climb the technology ladder, add value to their products and develop brands as their cost advantages were diminished, it said.

However, some textile firms said relocation would be commercially unviable unless the entire supply chain moved and unless government incentives were offered.

'If a factory is moved from Guangdong to Henan, for example, other companies such as suppliers and logistics service providers have to go, too, and railway and road infrastructure has to be available,' said knitwear maker Willy Lin Sun-mo, chairman of the Textile Council of Hong Kong. 'A sophisticated supply chain takes decades to develop, just like the Pearl River Delta, which took some 25 years to come to what it is today.'

The Pearl River Delta's reputation as the factory of the world has been tarnished by soaring wages and land prices and labour shortages. After a spate of worker suicides, Apple gadget maker Foxconn will relocate most of its production capacity from Shenzhen to Zhengzhou, Henan province, by the end of this year.

Lin set up a knitwear plant in Jiangxi province about 18 months ago to take advantage of the labour market but has managed to employ only half the 3,000 staff needed. 'Labour shortage is not just a problem in Guangdong,' he said. 'Insufficient labourers mean higher wages, a big threat to manufacturers.'