NDRC: Textiles profits to drop in 2nd half
Source: China Daily Date: 2007-07-18
The textile industry profit will likely fall by 4.8 billion yuan (US$633.91 million) in the second half of this year, with the profit margin down by 0.26 percent, said the National Development and Reform Commission (NDRC) yesterday.
The growth rate of textile exports will slow down as the tax rebate is to be reduced to 11 percent from 13 percent from September 15 of 2007.
In a textile industry report released by NDRC yesterday, the expected growth rate of textiles export in 2007 is 16 percent year on year, lower than the 25 percent growth rate in 2006, although the export value in 2007 is still expected to reach US$165 billion.
Yu Housheng, assistant general manager from Beijing Topnew Import & Export Co Ltd, said the prediction from NDRC is not accurate because the impact of the tax rebate cut on the textile industry will be beyond 0.26 percent.
Yu said orders from the first half will be exported in the second half with lower prices, and since July firms have increased prices to offset the cost resulted from the tax rebate cut.
Customs figures show the textile industry exported US$57.37 billion in the first five months of this year, up 15.55 percent year on year, and the increase rate saw a nearly 9 percent drop year on year, lower than the 12.25 percent of the nation’s export growth rate.
The textile industry is a major contributor to China’s large trade surplus. The country had a US$129.2 billion trade surplus last year, accounting for 71 percent of the nation’s total.
In the first quarter of 2007, the textile industry’s trade surplus reached US$27.28 billion, accounting for nearly 60 percent of the country’s total in this period.
