Date: 04/23/2000

Author: GONG ZHENGZHENG, Business Weekly staff

Although China's expected accession to the World Trade Organization (WTO) will increase the country's textile exports in general, industrial insiders said domestic enterprises must lose no time in upgrading their technologies and in sharpening their competitiveness.

Shijiazhuang Changshan Textile (Group) Co Ltd in North China's Hebei Province will beef up its efforts in technical upgrading to produce more high-end textiles, said group President Han Xihou.

"These efforts will help us survive fierce global competition after WTO accession," Han said.

China has been the world's largest textile producer and exporter since 1994, but low-grade textiles have characterized the lion's share of that trade.

To satisfy mounting domestic demand, the country imported about US$6 billion of high-end textiles annually in recent years.

With China's tariff-rates expected to decline after WTO accession, more foreign high-end textiles will flow into the country and strain domestic enterprises, especially those backward in technology, Han said.

The group, the country's second biggest textile producer, established in 1991, plans to channel 805 million yuan (US$96.99 million) into its technical upgrading in cotton spinning, printing and dyeing and chemical fibres by 2002, Han said.

This year, the group will invest nearly 160 million yuan (US$19.28 billion) in importing advanced technologies, improving existing equipment and developing products with high-added value, such as intensive-woven silk and pure cotton cloth.

Han told Business Weekly that the group expects to set up a technological innovation centre during the first half of this year and strengthen co-operation with the China Textile Scientific Research Institute to develop more new products.

"We will put more than 1 per cent of our annual sales into new product research and development beginning this year," Han said.

Within three years, annual input in research and development will account for 3 per cent of total sales.

The group's investments in technical upgrading during the past two years totalled 278 million yuan (US$33.49 million), contributing significantly to its exports.

The group exported US$1.1 billion in textiles to 60 countries and regions during the period.

Thanks to its technical upgrading efforts, the group expects to export US$70 million this year, Han said.

"We will also play an important role in fending off high-end textile imports," Han said.

To raise more funds to buoy its technical upgrading, the group's largest subordinate, Shijiazhuang Textile Share-holding Co Ltd is striving to go public on a domestic stock market by the end of June, Han said.

The shareholding company, consisting of four of the most promising textile enterprises of the group, is expected to raise 450 million yuan (US$54.22 million), more than half of which will be put into technical upgrading.

The group also plans to build a materials base this year in the Xinjiang Uygur Autonomous Region, the largest source of high-quality cotton in the country, to ensure its sustainable development, Han said.

"The plan echoes the central government's call for all-out efforts to develop the vast western region," Han said.

The group reported a profit of 130 million yuan (US$15.66 million) last year, an increase of 157.72 per cent from that of 1998.

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