China's textile industry has returned to a regular growth after the period of high-speed growth which followed the country's entry into the World Trade Organisation (WTO). According to the latest statistics jointly issued by the Industry Department and the Statistics Centre of the China National Textile and Apparel Council (CNTAC), the operation of China's textile industry demonstrated five major features of steady growth of production, slow in export growth and change of growth method, import volume reduced but price hiked, investment continued increasing, and operating efficiency and quality further improved.
- Production increased steadily. Large textile enterprises realised total industrial output value of RMB1,946.164 billion in the first eight months of this year, rising 22.99% year on year, while output value of cotton textile, garment making and chemical fibre sectors also recorded increases year on year.
-Export growth was slow, and method of growth changed
In the first eight months of this year the export of fabric and garments realised US$111.733 billion an increase of 19.46% year on year, 5.21% lower than the same period of last year; the export price increased by 8.12% year on year.
- Import volume declined while price went up. China's import of textile products and garments reached US$12.478 billion in the first eight months of this year, an increase of 4.43% year on year, while the import volume dropped 2%. Price of imported products made remarkable hikes, especially the average import price of garments which rose 31.13% year on year.
- Industry's investment increased. The actual investment in fixed assets projects with investment exceeding RMB5 million in the textile and garment-making industry reached RMB158.967 billion in the first eight months of this year, rising 34.6% year on year, and 3.15 percentage points higher than the growth in the same period of last year.
- Operating efficiency and quality further improved. Total profits of large textile enterprises reached RMB71.075 billion in the January-August period of this year, rising 37.79% year on year, and the percentage of loss-making enterprises dropped 0.65 percentage point year on year. The total profits of the industry is forecast to increase 30% year on year for the whole year.
Several factors influenced the operations of the industry. Firstly, the growing force for pulling up the market demand at home and abroad. Currently, the demand on the international market is steady; developing countries in Asia and Africa have become the new engine for the increase in the textile industry's export. Statistics show that China is export to the United States increased 27.11% year on year in the first eight months; that to the 25 countries of the EU, up 26.67%; Japan, up 4.11%; and that to African and ASEAN countries increased rapidly to 38.55% and 40.1% respectively, contributing 25% to the country's export growth. At the same time, the domestic demand has remained strong. The output value for domestic sales of large textile enterprises reached RMB1,417.251 billion in the first eight months, accounting for 74.86% of the total industrial sales output value, 1.73 percentage points higher than that in the same period of last year.
Secondly, the adjustment and upgrading of industrial structure have started taking effect. China's textile industry has achieved consistent improvement of equipment this year. Its total import of textile machinery and parts reached US$3.172 billion in January-August, rising 21.81% year on year. The main imports of the cotton textile sector were mainly advanced equipment including automatic and semi-automatic air mules, automatic bobbin winder and shuttleless loom which registered increases of 73.33%, 84.32% and 18.22% year on year. The per capita labour productivity of large textile enterprises reached RMB72,700, rising 22% year on year respectively.
Chinese minister of commerce Bo Xilai said at a national working meeting on expanding import of advanced technology and equipment held at the end of September this year that China will adopt preferential measures such as discount to encourage increase of import of advanced technology and equipment. According to an official of CNTAC, the catalogue on products under the encouraged category will be published shortly. Some advanced textile equipment is expected to be listed in the catalogue.
Thirdly, the capability for fending off the negative factors on export has enhanced. Based on the new Catalogue on Products under Processing Trade Restriction published on July 23, a total of 1,539 tariff numbers of the textile industry have been put into the catalogue for bank depository management, accounting for 83% of the total tariff numbers in the catalogue. Starting from July 1st, export rebate rate of garment, viscose fibre and their products has dropped 11% and 5% respectively. Statistics show that the export rebate cut brought about losses of profits amounting to about RMB3.2 billion in the first eight months in accordance with the value of products delivered for export by large enterprises, and the losses for the whole industry is estimated at RMB11.5 billion. Such a situation will make small and medium-sized enterprises with a small margin of profit face much pressure.
