China Textile Exports Estimated 10 Percent Negative Growth in H2 2009
Source: ccfgroup Date: 2009-06-29
According to data from General Administration of Customs, from January to May this year, China's exports of clothing and accessories registered US $36.82 billion, down 8.1 percent year-on-year; exports of textile yarn and fabrics realized US $22.03 billion, down 15.5 percent year-on-year.
The downturn of international market has affected confidence of business investment, from January to April this year, textile industry completed investment of 68.1 billion Yuan in fixed assets, up 1.6 percent year-on-year, but annual growth rate fell 16 percentage points.
In addition, domestic apparel consumption also slowed down, which increased difficulties for export enterprises to shift their export products to domestic market. In April this year, total retail sales of clothing grew 14.0 percent, lower than growth rate of 14.8 percent in total social retail sales, while retail sales of clothing was usually 5 percentage points higher than total social retail sales in the past.
Industrial experts point out that textile and garment exports will vibrate in low level for some longer time, it is estimated to realize a 10 percent negative growth in the second half, the most optimistic expectation is that the fourth quarter of this year will begin to see signs of warm-up.
Before the world economy bottoms out, Chinese textile enterprises do not only face reduced orders, but also face price risks. In the course of waiting for the spring in anxiety, many textile enterprises have to make price concessions to attract orders for stabilizing production. At the 105th Canton Fair concluded in early May, price competition was fierce, transaction price of textiles and apparel generally drop 5 to 20 percent, which means that enterprises will face increased export risks in the next few months.
Domestic cotton price rose from 11,000 Yuan / ton at the beginning of this year to current 13,000 Yuan / tons, import cotton price also increased from January to May.
In the first 5 months of this year, Europe and the United States significantly increased their efforts of recall activities against Chinese textiles and apparel.
Experts point out that price cut can only play an important role temporarily, in the long run, enterprises should focus on brand build and technological innovation. Order will tend to concentrate in high-quality enterprises.
