China continues to be the leading supplier of home textiles in the world, with exports projected to exceed US$9.5 billion by the end of 2008, increasing by a robust 15 percent from the previous year.

Apart from steady overseas demand, strong domestic sales, driven by a tourist boom and improved housing conditions, are also encouraging makers to increase output.

Despite the positive outlook, however, companies are facing many challenges including higher raw material costs, the yuan's revaluation, export tax rebate cuts and fierce competition from other countries.

Suppliers are dealing with the challenges in a variety of ways. While some are trying to cut their operating costs, others are attempting to move up the value chain to improve their profits.

Many makers are also increasing style choices to provide a wider selection for buyers, with some having R&D teams that can launch up to 200 designs per month. Some suppliers are focusing on environment-friendly processing and the use of textiles that conform to the Oeko-Tex Standard 100.

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