Chinese clothing manufacturers gain foothold on European soil with their own factories
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Business
Chinese textile company Shanghai Jingqingrong Garment, which supplies clothing for multinational fashion chains such as Japan's Uniqlo or Sweden's H&M and COS, will open its first textile factory outside China, in Catalonia. This is the result of an investment project by the textile company that has received the support of the Catalan government. It is a recent example of the trend for Chinese garment and textile manufacturers to locate more within Europe.
Shanghai Jingqingrong's textile company is located in the Catalan town of Ripollet, a few kilometres north of Barcelona, in the Vallès Occidental region. The plant's management is preparing to open in the first half of 2024 and create some 30 jobs. This is the result of an investment of around three million euros set aside by Shanghai Jingqingrong Garment to launch a new international knitwear production line. Producing knitwear is a category that textile companies in Catalonia have historically specialised in. The image of the industrial area has attracted the attention of the Chinese company, according to Roger Torrent, minister of enterprise and labour for the Catalan government, the department that supported the initiative through Acció, an agency that supports foreign investments and business competitiveness.
"It is no coincidence that Chinese companies like Shanghai Jingqingrong Garment are starting their international expansion strategies from Catalonia, one of the most industrialised areas in Europe and one of the main gateways to the continent," Torrent said in a government statement. He further highlighted that "Chinese companies have invested more than one billion euros in Catalonia in the past five years", in "projects that have led to more than 2,000 jobs”.
Supplier of Uniqlo, H&M and COS
Shanghai Jingqingrong Garment was founded in 2004 and counts chains such as Uniqlo, H&M and COS among its customers. It is a company specialising in all processes related to fashion manufacturing, from design to production and subsequent global distribution in different regions of the world.
From the first half of 2024, these tasks will also be carried out from Catalonia, where the new production facility will be added to the operations the textile company currently has in Shanghai and in China's Henan and Anhui provinces. These production centres employ around 2,000 workers and have a production capacity of around 800,000 garments per month, catering to the textile firm’s trading relationships with companies in different regions of the world. Its customers mainly include companies from the European Union, Japan, the US and Canada, generating an export volume of about 25 million dollars a year.
China's 'soft power'
China is exercising 'soft power' in different parts of the world, reported Catalonia's government in a statement. The textile company was selected by Minister Torrent and part of the government that visited China last October 2023. The tour of the Asian giant was aimed at motivating trade and attracting new foreign investment projects in the region, the Catalan government said. The government also wanted to identify the potential the region has for Chinese companies. Local production, with raw materials from China, could be an accurate response to the needs of companies in a wide variety of sectors, including textiles.
Producing closer to home again, after previously opting for production in countries far away, is known as 'nearshoring' in the fashion industry. This can mean that companies start producing in their home country, or in the continent on which they are located. Much production today still takes place in Asia, but closer to Europe, with popular production countries being Turkey and Morocco.
'Nearshoring' became more popular during the pandemic because of unstable supply chains between Asia and Europe. Producing closer to home usually means more flexibility due to shorter delivery times.
Chinese companies in Catalonia and Barcelona province “have raised 1.16 billion euros through foreign investment from China over the past five years”, Torent said. This investment has led “to the creation of 2,100 new jobs”, the region’s government reported, based on figures from Acció and derived from data collected by the Financial Times' fDi Markets. Building on this profile of relations between China and Catalonia, “there are currently 114 subsidiaries of Chinese companies based in Catalonia”, for which “Acció has promoted several initiatives in recent years to facilitate the establishment of Chinese companies in Catalonia, such as the Barcelona China's European Logistics Centre project”, better known as 'Barceloc'. This project is a collaboration with the Port of Barcelona, Barcelona city government and several specialised logistics companies. The project is also known as 'China Desk'.
"In addition to all this," Torret's department added, "several cooperation agreements have been signed with companies and government agencies in recent years to promote technological cooperation and boost commercial relations," such as the one now signed with textile company Shanghai Jingqingrong Garment, which has allowed it to land in Catalonia.