China Chamber of Commerce for Imports and Exports of Light Industrial Products and Arts-Crafts (CCCLA) on Thursday signed a cooperation memo with eastern Pinghu City to set up a suitcase and bag manufacturing base.

Wang Zhongqi, vice president of the chamber told Xinhua that this would foster more export famous brands and lay a sound foundation for the long-run industry development, as well as help promote regional industrial upgrading.

Zhejiang Entry-Exit Inspection and Quarantine Bureau would also help in improving suitcase and bag quality for export.

Wang said that the CCCLA and the local government would strengthen product safety and quality supervision and raise the environmental protection threshold for local enterprises.

Liu Zhiyan, vice director of the bureau, said the collaboration between the local government and the quality watchdog was well-timed to safeguard export quality.

Liu called on companies to enhance their sense of social responsibility and self-discipline, adding that "premium-quality products come from production, not from inspection".

Shi Yunliang, the city's vice mayor, urged the more than 500 local suitcase and bag businesses to focus on brand building and better quality to increase their products added-value, amid sliding demand from traditional European and American markets.

As the world's largest suitcase and bag manufacturer and exporter, China exported US$6.286 billion of product globally in the first half of this year, up 26.45 percent year on year, according to Huang Daqi, CCCLA Suitcases and Bags secretary general.

The country's exported suitcases and bags accounted for more than one third of the global market. The United States and the European Union were the major customers, Huang said.

She added that the country exported 4.066 billion bags and suitcases in the first half, which translated into US$1.55 per bag, far cheaper than world's well-established brands from France, Italy, Japan and other countries.

Shi Lili, a Ministry of Commerce research fellow, said pressure on exporters from the appreciation of the yuan, labor and material price increases and the slowing pace of US and European markets were signs that domestic companies should embark on a "quality and brand-oriented" development road, as only those companies that did so would survive further squeezes on their profits.

Nie Jianqiang, a manager from a leading exporter, Shanghai-based Yangfan Suitcase and Bag Co., said that his company had felt the chill since last year from raw material price rises and employee salary rises.

Skilled workers at several companies in Pinghu told Xinhua that their current monthly salary was 1,700 yuan (US$249), more than 20 percent higher than the 1,300 to 1,400 yuan that Xinhua found this March in the same city.

James Wang, CCCLA Suitcases and Bags president, said regional cooperation, enterprise concept change and bigger government support were all pre-requisites for the industry, which employed more than 1.5 million people nationwide, to shift from "China Made" to "China Designed".

The country has more than 18, 000 suitcase and bag exporters, most of which are in Zhejiang, Guangdong, Fujian provinces and Shanghai.

Located in Zhejiang, with a population more than 500,000, Pinghu city sees this sector turning out more than 5 billion yuan sales volume last year, according to Shi Jihong, local industry chamber president.

But most of these companies were doing the labor-intensive Original Equipment Manufacturing business, while their own brands were mostly low-end ones, Shi added.

(Xinhua News Agency September 19, 2008)