Chinese textile exporters used to be busy collecting orders for the whole year during the spring.
But rather than sealing contracts from the US market, what they are facing this spring is uncertainty surrounding the slowdown of the US economy and the yuan's appreciation.
Li Lingming, chairman of the board of Chinatex International Apparel Co Ltd, says the company's exports to the US in 2008 have declined compared with the same time last year. Exports to the US account for about 40 percent of the company's total exports.
Like many Chinese textile makers, Li had expected to transfer the cost hikes resulting from the yuan appreciation, the removal of an export tax rebate and increased labor and material costs to the buyers. But instead, he finds they "may have to decrease the prices instead of increasing them" just to attract enough orders.
"Some US clients now ask for postponement of payments, whose risk is exaggerated by the yuan's increase against the US dollar," he says.
Their US buyers, however, are complaining at the same time.
Jeffery S. Hochster of the Texas-based Westmoor Mfg Co, says the company's business has been affected by various elements, ranging from inflation and the weakness on US dollar to the Chinese government's removal of the tax rebate.
"We've seen prices (of Chinese textiles) going up. Since December, prices have gone up substantially," he says, adding some factories even raised the prices by 15 to 25 percent. "It is a lot."
At the 103rd China Import and Export Fair or Canton Fair, which concluded in Guangzhou at the end of April, the contracted value of textile exports to the US declined by 25.49 percent from the previous session in last October. The decline is the largest among China's major export markets.
The event used to a spending spree for international buyers and a barometer of the country's foreign trade during a year.
China's textile exports to the US market have been decreasing since last October, according to the statistics from the China Chamber of Commerce for Import and Export of Textiles.
Monthly exports declined for five months in a row till February. The Chinese mainland's textile exports to Hong Kong, which is a hub for Chinese textile products to the US and European markets, also declined almost 15 percent year-on-year in the first two months this year.
"And we also found the decline of US textile imports from China surpasses the decline of its imports from the other markets," says Cao Xinyu, vice-chairman of the Chamber of Commerce.
He attributes the condition to the fact that the yuan has increased about 18 percent against the US dollar since the central government decided to raise the exchange rate in 2005.
This forced many Chinese textile exporters to seek a larger presence in some other markets, including the European Union and South America, Cao says.
Consequently, many Chinese exporters are now pessimistic about the US textile market in 2009 although the year marks a real "quota-free era" for China's textile exports to the US.
When textile quotas were removed globally in 2005, China, the world largest textile exporter, reached agreements with the US and the EU to extend the quota system on the country's textile exports to the two markets to the end of 2008 and the end of 2007 respectively.
This year China and the EU are applying a "double checking system" to track the issuing of licenses for exports in China and the importation of goods into the economic bloc.
Cao with the Chamber of Commerce says China and the US may not take a similar measure when the agreement comes to an end because China's textile exports to the US are decreasing.
However, he says, Chinese textile exporters are still likely to encounter more protectionism in the US as US textile businesses that are squeezed by the economic trouble in their home market may push the US government to protect their interests.
"Countervailing and anti-dumping measures, which is being conducted simultaneously on a number of other Chinese-made products, may be taken against textile products" he adds.
Some US officials and experts believe that its consumer market is going to recover from the end of the third quarter this year as the government's measures to stimulate the economy take effect.
However, many Chinese textile exporters say they believe the US recession will last to at least the first half of next year and may not see a recovery until the second half in 2009.
Many US buyers are turning to other textile making countries, such as Vietnam and Indonesia, but some others are choosing to stay with their Chinese partners.
When asked of whether he will keep buying in China, Hochster says: "Sure. I think China still gives you opportunity to get good quality. "
He explains Chinese apparel makers are close to textile mills without having to ship fabric to other countries, which makes the shipping time less.
It takes about 20 days from China to the US, four weeks from Indonesia to the US and longer for some other countries.
However, Hochster says he is not only looking for new resources to buy garments in China but also looking for factories to make garments by themselves.
Ma Shiying, deputy general manager of Guangzhou Textile Holding Limited, who just returned from the United States, finds it "very hard to bargain for a better export price with US clients".
He and his sales team now have to make offers to their US buyers at an aftersight exchange rate, sometimes as low as 6.78 (the yuan closed at 6.99 to dollar on April 25).
"But, as some clients say it will be better next year as long as we pull ourselves through 2008," he says.
