China now produces half of the world’s clothing and 65 per cent to 70 per cent of fiber. China and its neighbors have formed a mutually beneficial and healthy regional supply chain cooperation relationship. China supplies textiles to neighboring countries. These process and sell to the global market, and some of them return to the Chinese market. In the next few years, the production capacity of textile and clothing industries in China can be improved by a move to neighboring countries.

Large-scale textile factories in Vietnam are basically run by the Chinese. China’s textile and clothing companies or factories operating in Cambodia and Myanmar account for at least 30 per cent of the total number of local textile and garment companies. China’s investment has promoted textile and clothing in these countries.

In the global value chain of the textile and garment industry, raw materials, cotton and accessories are at the low end of the smile curve and the lowest added value of production is at the middle of the value chain. Distribution, design, marketing etc. are high value-added fields. China hopes to move to the upper end of the smile curve to enhance the level of industrial development, carry out industrial upgrading, and better integrate into the global value chain. Every link in the smile curve has development potential.