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Sharply-slowing chinese textile exports worry industry

Sharply-slowing chinese textile exports worry industry Source:
Date: 06-06-2012
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New figures have showed that China's textile and garment exports slowed drastically in the first fourth months of this year as domestic companies worry about decreases in their market share overseas and inadequate support from consumption at home.

The export value of textile and garments in the Jan.-April period stood at 71 billion U.S. dollars, just 1.07 percent higher than a year ago, according to data released on Thursday by the China National Textile and Apparel Council (CNTAC).

The growth rate witnessed a sharp decline from the 27.05-percent rise registered in the first fourth months in 2011, judging by customs data.

Breaking the market down, exports of textile products grew only 0.15 percent to 30.73 billion U.S. dollars, while garment exports increased 1.77 percent to 40.27 billion U.S. dollars, the CNTAC data showed.

"The slowing exports were directly caused by higher domestic cotton prices," said CNTAC spokesman Sun Huaibin. The domestic price of 328-type cotton stood at 18,853 yuan (about 2,974 U.S. dollars) per tonne as of May 25, 5,460 yuan higher than its price in international markets.

The continuing price gap has weakened the competence of the domestic textile industry, Sun said, adding the nation's textile exports will face an even worse situation if the gap fails to narrow in future.

The spokesman said the disparity has also led to reduced market shares of Chinese textile and garment exports.

Along with rising labor costs at home in recent years, Chinese textile and garment products in major markets such as the United States and Japan fell to 35.58 percent and 72.03 percent, respectively, in the first quarter of 2012, down 4.55 and 2.92 percentage points year on year, Sun noted.

Meanwhile, according to the CNTAC data, China's textile exports to its third-largest trading partner, the Association of Southeast Asian Nations, grew only 2.69 percent in the Jan.-April period, representing a drastic fall of 59.66 percentage points year on year.

The data also showed textile and garment imports by the United States, the EU and Japan dropped 6.55 percent in the first quarter, which added to the worries of Zhong Daguang, general manager of a garment company based in southern China's Guangdong province, who said his company has been getting fewer orders since the start of the year.

Li Jincai, president of the China Textile Construction and Planning Institute, said obstacles in foreign trade and lackluster domestic consumption are both having an impact on the status of the country's textile and garment industry, which supplied 32.71 percent of total exports worldwide in 2010.

At home, the situation is no less worrying. The CNTAC data showed the sales revenues of 36,700 surveyed textile companies hit 1,677 billion yuan in the first four months, up 13.11 percent; however, the growth rate plunged 17.43 percentage points year on year.

Slowing growth in both exports and domestic sales revenues slashed the first-quarter profits of the surveyed companies to 53.7 billion yuan, down 1.77 percent year on year, the data suggested.
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