Chinese companies have cut job opportunities and moved factories overseas or to lower-wage Chinese regions. In their report, China's textile industry, which exported US$176 billion in 2007 and directly employed about 20 million workers, is now facing a slow decline.

Production data for January-February 2008 shows that production increased by 5.7% compared to the same period in 2007, while in 2007 it increased by 19%, which is a relatively low growth rate since 2003. In Guangdong, a southeast province adjacent to Hong Kong, which is also China's export industrial center, the output fell by 11.30% from January to February this year, partly due to the blizzard disaster and the Chinese New Year holiday in February, but at the same time, the United States and Europe demand is also declining.

William Lowry, a large purchaser of Chinese clothing and textiles in the United States, said in an interview at China's largest import and export fair in April 2008 that the competitiveness of Chinese products is not so strong.

"I'm thinking about sourcing from other countries," he said. "China's reduction in tax rebates and the depreciation of the U.S. dollar have led to a 20% increase in the price of Chinese products compared to the past." So it is no surprise that according to a recent industry survey, China's cotton is close to 50%. The textile industry wants to change careers, because the cost expansion and the appreciation of the Chinese renminbi squeeze the profits of enterprises.

Unbeknownst to Mr Lowry, the situation is different from previous years, he wants to source cheap textiles from other countries, in fact, the source of cheap goods will be quite limited. India is also telling its own story. Rupee appreciation, soaring fuel costs and soaring cotton prices have left Indian textile companies with nowhere to go. They must either procure expensive raw materials for their products or face bankruptcy. For example, MH Textile Mills Ltd in the Ahmedabad area is continuing to raise selling prices by 15-20%, resorting to drastic cost-cutting measures to save the business, including laying off nearly 500 workers.

In addition, MH Textiles reduced the average age of its workforce from 55 to 48, made more use of cost-effective equipment, saved nearly 25% in electricity costs, and shifted to a paperless work environment with full computerization. Even textile giants, such as Arvind Textiles, are aggressively taking cost-cutting measures.

We have now entered a historical era of cost reduction. Textile mills adopt innovative technologies to improve power efficiency, save fuel, compress labor force, and link remuneration with net increase in departmental productivity.