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Textile exporters told to brace for hard times ahead
By Wang Yanlin |
July 6, 2012, Friday
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Online Edition
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CHINESE textile companies may continue to face difficulties in the second half of this year as shrinking demand and rising costs erode their profitability, the Ministry of Industry and Information said today.
Textile production increased 11.8 percent from a year earlier to 2.14 trillion yuan (US$339 billion) in the first five months, down from a growth of 30.1 percent recorded in the same period of last year.
Textile profits decreased 2.4 percent to 91.7 billion yuan in the January-May period, a sharp contrast with a 38.1 percent rise a year earlier.
"Insufficient market demand, rising production costs and increasing global competition are major challenges for Chinese textile companies," the ministry said in a statement. "These conditions are not easy to change. Along with uncertainties in external markets, we suggest textile companies to brace for hard times ahead."
The country's textile industry, which used to be highly export dependent, is losing its global market share to countries like India, Vietnam and Bangladesh, the ministry said.
In the first five months, Chinese products accounted for 73 percent of Japan's textile imports, down 1.95 percentage points compared with the weight in 2011.
The widening gap between domestic and international cotton prices is another reason for China's declining competitiveness, the ministry said.
Cotton, a major raw material for textile production, is reportedly 4,500 yuan cheaper each ton in the overseas market. It means Chinese textile producers have to digest extra cost if they purchase cotton within the country.
Textile production increased 11.8 percent from a year earlier to 2.14 trillion yuan (US$339 billion) in the first five months, down from a growth of 30.1 percent recorded in the same period of last year.
Textile profits decreased 2.4 percent to 91.7 billion yuan in the January-May period, a sharp contrast with a 38.1 percent rise a year earlier.
"Insufficient market demand, rising production costs and increasing global competition are major challenges for Chinese textile companies," the ministry said in a statement. "These conditions are not easy to change. Along with uncertainties in external markets, we suggest textile companies to brace for hard times ahead."
The country's textile industry, which used to be highly export dependent, is losing its global market share to countries like India, Vietnam and Bangladesh, the ministry said.
In the first five months, Chinese products accounted for 73 percent of Japan's textile imports, down 1.95 percentage points compared with the weight in 2011.
The widening gap between domestic and international cotton prices is another reason for China's declining competitiveness, the ministry said.
Cotton, a major raw material for textile production, is reportedly 4,500 yuan cheaper each ton in the overseas market. It means Chinese textile producers have to digest extra cost if they purchase cotton within the country.
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