While companies in Huludao are looking to move up the ladder, other swimsuit-making regions in China are finding that the transition is not that easy.

Huludao, Yiwu in Zhejiang province and Jinjiang in Fujian province are the three major swimsuit production bases in China.

"Huludao is now losing its inherent advantages like raw materials, including polyurethane, spandex and polyamide, and the geographical strength of being near the nation's major trading ports," said Yu Shuqin, president of the Xingcheng Swimsuit Industry Association.

Lack of teamwork and scattered small units are also restraining the development of the industry. Although some of the brands are registered in Europe and the US, they do not have the required market experience or knowledge to pose a stiff challenge to Western brands, Yu said.

The city was one of the beneficiaries of the labor shortage that hit South China in 2006. The city gained a lot of swimsuit export orders and was able to make handsome profits, thanks to its steady labor pool. But higher wage bills and a fast-depleting workforce are slowly affecting the industry.

"Companies have to pay double wages, as very few young women are willing to settle for the boring factory routine. They are keen on finding jobs in other industries or pursing a university education. Most of the women workers are above 40 and very few are aged 18-35," Yu said.

Du, the mayor of Huludao said the local government decided to upgrade the industry with policy support.

To take the industry to the next level, Li and eight other swimsuit makers, who together account for more than 50 percent of the total industry output, set up the Tiancheng Swimming Industry Service Co Ltd in 2011 with an investment of 50 million yuan. The company will play the role of a public service platform featuring technology promotion, quality inspection, training, modern logistics and creativity. It will also act as an innovator of industrial technologies.

"It is time for us to do this. We are tired of being dependent on expensive raw materials and layers of middlemen," Li says.

Wang Hongguang, general manager of Xingcheng Yilang Swimming Wear Co Ltd, with an experience of more than 20 years in the industry, said she decided to join the platform without any hesitation.

Like all second-generation entrepreneurs, Wang inherited her business from her father, but has since moved on to have her own manufacturing facilities. Operating separately from her brother, Wang has a 7,000-square-meter workshop and more than 10 sets of machines.

"We received 1.3 million orders from 10 customers mainly from Europe this year. However, we can make only 1 million swimsuits," Wang said.