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Shanghai sets up export innovation bases to boost light industries

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Shanghai has recently unveiled the opening of its light industrial goods export innovation base with 20 member enterprises. This is the second of its kind following the opening of the export innovation base for clothing and accessories.

Setting up export innovation bases for garments and other light industries is an important step taken by Shanghai to accelerate the transformation of its mode of foreign trade development, upgrade its export products, and rejuvenate its traditional industries. Through policy guidance and financial support, relevant industries and enterprises are guided to build a public service platform to improve upon their product design, sample production, display and testing capabilities, extend their foreign trade value chain, promote the transformation of foreign trade activities from traditional OEM operations to the design and manufacturing of proprietary brands, and open up new international marketing channels.

Due to rising business costs, diminishing labour cost advantages, sluggish research and development innovation and other factors, Shanghai once renowned for its light industrial goods has lost its international competitive edge in recent years. Some brands have even degenerated into cheap goods sold at street stalls. The establishment of export innovation bases on the strength of industry leaders to develop designs, samples, brands and services as a cluster will help increase the competitiveness of Shanghai's light industrial enterprises as a whole, enabling them to fight for overseas markets as a team rather than on their own.

Exporters' manufacturing, research and design capabilities play an increasingly important role in international trade with further segmentation and division of labour. Export enterprises capable of designing their own products and making samples quickly are in a stronger position to receive more orders and more efficient in exporting their goods. They are also better able to build up their own brands.

Textiles, garments and other traditional light industries have always constituted an integral part and a dominant export force of Shanghai's manufacturing sector. In 2009, Shanghai's textile and garment exports amounted to US$15.266 billion in value, accounting for 10.76% of the municipality's total export volume. Although production facilities have gradually been shifted to the neighbouring provinces and cities in recent years, these traditional industries still enjoy an advantage in independent innovation and brands thanks to their combined leading edge in manpower, information and marketing channels. They still have room and potential for sustainable development.

Shanghai's export innovation bases for garment and other light industries operate in the form of open alliances. Enterprises that satisfy the following three requirements may apply for membership: First, they must have their own proprietary brands. Second, they must have export capability. Third, they must have built or are building their own R&D centre, design centre and sample-production centre.

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