Despite signs of a global economic recovery this year, liang yongsheng feels a sense of frustration.

Falling demand in traditional European, American and Japanese markets and rising manufacturing costs at home are gripping business owners in both directions.

"There are almost no visitors from Europe, and the U.S. is doing better."Liang yongsheng, a manager of nanjing ouheng clothing co., LTD., told China business news about the Canton fair.

The third phase of the 113th Canton fair, which opened on May 1, mainly showcases textile and apparel, footwear, pharmaceuticals and medical care, which are traditional labor-intensive enterprises sensitive to cost and price.

Today, China's competitive advantage in traditionally labor-intensive industries has been eroded by rising labor prices, weak foreign demand and a volatile yuan.The growth in demand in emerging markets in South America (Mexico, Brazil, Chile), northern Europe and Africa has not been enough to ease the slack in traditional markets.

Despite their reluctance, most of the business owners at the fair acknowledged it.

Demand and cost

Periodic changes in foreign market demand make it difficult to guarantee orders.

Han, manager of shandong lufeng weaving & dyeing co., LTD., in charge of garment export, told reporters that compared with the dismal situation in the same period last year, the order volume this year has picked up by 20%.In order to cope with such a small year, enterprises can only from the cost and price adjustment to maintain the market.

Although the price of raw materials has fallen due to competition from domestic raw material companies, this cannot offset the rising labor and processing costs.Qian Yang, business manager of the textile and garment department of jiangsu huihong international group co., LTD., told reporters: "due to the rising printing and dyeing costs, coupled with the improvement of national environmental protection standards, the decline in the price of raw material cotton is not reflected in the finished products."

Mr. Qian said the company's exports fell 10% in the first quarter of this year, and that its outlook for the year was not optimistic."Labor costs are at an all-time high, but the garment industry is still in short supply, and young people are reluctant to go into textile processing."

In addition, the exchange rate is one of the obstacles cited by business owners.Processing and manufacturing products are highly sensitive to price changes. The fluctuation of RMB exchange rate has not only deterred foreign buyers from placing large and long orders, but also squeezed corporate profits.

Order: from quantification to differentiation

Only its own integration and self-upgrading of the industrial chain can change the current dilemma.

Qian Yang believes that the automation of traditional labor-intensive enterprises can not be achieved overnight, and this process of small and medium-sized enterprises can not afford a large amount of capital investment, can only choose to sacrifice the price in the original model.This pattern is clearly unsustainable.

In the context of falling prices, but lufeng fabric and apparel prices."Orders have come through September, and we expect both sales and exports to rise steadily this year."Manager han told this reporter that the profit of the first quarter of this year increased by 40% compared with the same period last year.

"On the one hand, we strengthen cost control, such as scale and the whole industrial chain of production, the production planning arrangement, improve the workshop machine running speed, etc., on the other hand, to strengthen the supporting service, such as early in the design, development, the support of clients fabrics, from semi-finished products to finished product, and even the final logistics services are packaged to clients, to save their time and energy."

In his view, quantified orders will definitely flow to peers in southeast Asia and other places, they choose to do high-grade, difficult orders.

Of course, export pressures remain, such as customer demand for product differentiation and demanding standards for product quality.Manager han told reporters that the change in order structure, including more styles, small batch, design and color, short cycle brought difficulties to the enterprise."We have adapted to the mass production of tens of thousands of pieces at one time, now there are only hundreds of pieces in a batch, and there are different styles and colors of the requirements."[China business news]