Fabric firm Shanghai Three Gun (Group) Co Ltd on Monday began production at its new 303 million yuan (US$36.5 million) plant.

The 150,000 square metre facility has an annual production capacity of 30 million metres of knit fabrics, and will expand Three Gun's presence at the top end of the domestic market where more than 50 per cent of the fabric used by the country's garment makers has to be imported.

According to officials, the plant will "strive to become a market-driven fabric manufacturing base with global competitiveness."

Said Gan Zhihe, director of the Investment Planning Department under the State Economic and Trade Commission: "The plant signals a new stage in China's textile industry that has been expecting a significant lift through wide application of advanced technologies and market-centred orientation."

As one of China's biggest knit underwear producers, Three Gun also expects the new facility to further strengthen its position in the underwear market.