A decade ago, buyers would have been lining up at China’s biggest trade fair to make deals with textile firms selling material and clothing at a fraction of the prices charged in Italy or the United States. This month, exporters say, the queues have gone. “You can’t survive if you make low-end goods,” said Melinda Zhang, chief executive of Nantong Kelin Textile Co Ltd, which employs about 250 people and supplies bedding to clients including the W Hotel in Singapore. “When you compete to sell at the lowest price, there’s always someone selling at an even lower price.” 
Textile exporters, a symbol of the low-cost manufacturing behind Asia’s “tiger” economies, said this week at the Canton Fair in China’s south that they were being crushed by rising costs. There are still foreign buyers – and China is still by far the world’s biggest textiles exporter – but they said they were turning increasingly to India, Pakistan and even back to Europe, as price gaps narrow. It’s not all grim in China’s economy. Upbeat manufacturing data this week showed the strongest output since early 2011. Other firms, exhibiting household electronics and decorative materials, have been more bullish. But quiet halls during the last phase, focused on exports, of the 25,000-exhibitor, biannual three-week Canton Fair, underscore just how hard some of China’s lower margin companies are being squeezed. China’s vast economic transformation has meant rising living standards, but also rising wages, forcing companies to move up the value chain to remain competitive. High-tech industries are springing up to replace labour-intensive sectors such as textiles and apparel. “I’ve come to the fair for 10 years. At its peak, people would be queueing up to talk to us,” said a Shenzhen-based exporter selling towels and other goods. “Now there are very few people. There are more exhibitors than foreign buyers.”
Falling exports- China’s textile exports fell last year for the first time in six years, slipping 5% to $286.8bn. In January-August of this year, textile and clothing exports are down more than 4.5%. Some buyers at the sprawling fair complained of poor quality and price rises of more than 10% on some goods in the past year. Other prices have doubled in five years, but standards have not kept pace, some noted. Turkey and Italy were among countries many buyers are switching to. “Maybe they are more expensive, but they have better design,” said Sergey Gerts, an import manager at Sparta Trade House in Russia, referring to markets closer to home. Gerts was visiting the fair for the third time to buy mainly tablecloths and doormats. Among the biggest headaches for textiles and other low-end manufacturers are wages. Average wages in China have grown at an annual compound rate of more than 12% – to 45,676 yuan ($6,755) a year in 2013 from 4,538 yuan in 1994, according to the All-China Federation of Trade Unions. Authorities in China have called for a slowdown in wage rises in order for the country to remain competitive. Sam Ma, at Nantong Lu-Ri Co Ltd, which sells mostly high-end bed sheets, blankets and fleeces, said wages had been rising 5-10% a year for several years. “In five to 10 years, all the low-end production will go to Pakistan,” he said.
