Chinese cotton textile industry faces challenging period

15 Apr '14

2 min read

The cotton textile industry in China is currently facing a challenging period, as the Government is making policy changes by cancelling its policy of temporary cotton purchase and storage.

According to experts, though the Government has replaced its earlier purchase and storage policy, its effects will continue, as it would take more than two years to digest the State Reserve cotton, and the cotton issue would continue to plague the Chinese cotton textile industry until then.

As cotton prices would definitely fall in the Chinese domestic market, there would be devaluation of the existing inventory with the cotton textile enterprises, creating a headache, especially for enterprises with heavy stocks. However, experts argue that the fall in domestic cotton prices would help improve the competitiveness of the Chinese cotton textiles in the long run, and would be conducive to the development of the textile industry.

Weak demand, falling profits, closure of large number of businesses, high cost of labour, etc are among the problems that currently plague the Chinese cotton textile industry. But, China’s population of 1.35 billion provides space for development of the industry by implementing appropriate strategies.

China’s urban population is currently increasing at 15 million per year, and hence experts are advising domestic enterprises to pay attention to this market. According to them, the rural demand for textiles has increased with the acceleration of urbanization and the whole textile industry should focus on quickly getting to this market.

In the present circumstances, speeding up upgradation, improving product quality, and enhancing labour productivity becomes an urgent task for the Chinese cotton textile industry. Likewise, cost efficiency, management innovation, and process reengineering become particularly important for the industry, aver experts.

Fibre2fashion News Desk - India

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