(Yicai Global) March 5 -- Southeast Asia has become the destination of choice for many labor-intensive Chinese manufacturers in recent years as high labor costs and difficulty in recruiting workers in China take a toll.

This was evident at the East China Fair held in Shanghai between March 1 and 4. All indicators at the fair pointed to an increasing number of manufacturers and foreign traders seeing signs of market recovery. They have either set up factories in Southeast Asia or are developing new products and technologies to cope with market changes.

China's textile exports gained 8.1 percent to USD119.1 billion (USD17.8 billion) last year from a year earlier, while its apparel exports rose 0.3 percent to USD157.6 billion, Cao Jiachang, president of the China Chamber of Commerce for Import and Export of Textiles and Apparel, revealed at the ECF. Upstream product exports rose, while downstream product exports fell. China's clothing producers shifted to areas nearby, while demand for Chinese yarns and fabrics jumped due to incomplete industrial chains in these low-cost garment-making countries.

The Chinese textile and garment industry's share of the international market has contracted. Its share of the US market fell 0.4 point to 36 percent from 2017. Meanwhile, China accounted for 33 percent of European Union imports, down 1 point and 58 percent in Japan, down 3 points.

Though the Chinese textile and apparel industry's share of the global market has shrunk, business scales are not. Chinese firms own many factories in Southeast Asia. Some foreign customers are reluctant to place orders with Chinese factories amid uncertainty over global trade, which provides opportunities for factories in Myanmar, Vietnam and other places, Cao said.

More Automation, R&D

In addition to moving plants to Southeast Asia, some have opted to increase automation and invest more in research and development to win orders.

Shimu Import & Export puts 10 percent of its annual profit into R&D, and has developed degradable nitrile rubber gloves; 'the world's thinnest' protective gloves; rubber gloves resistant to low temperatures and oil; and other new products, according to Dai Guoda, president of the Shanghai-based company.

The main export destinations for its WonderGrip gloves are Japan and Europe. The firm's orders have been lined up for May and June and its goal this year is to boost orders by at least 30 percent, Dai added.

Fourteen trade groups of more than 4,000 companies attended the ECF, which covered an area of 126,500 square meters, or 2,900 square meters more than last year's exhibition area.

There were 5,868 booths and 22,757 foreign businessmen, an increase of 2 percent compared with the previous session, from 111 countries and regions, said Shi Chen, deputy director of the Foreign Trade Development Department of the Shanghai Municipal Commission of Commerce.

Export turnover at the annual fair was basically the same as that of last year. Statistics show that the top 10 countries or regions in terms of turnover are Japan, South Korea, the US, the UK, France, Hong Kong, Germany, Italy, Canada, and Russia.