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Textile industry sees orders shifting to Asian countries
Aug '11
Chinese textile industry is witnessing a trend wherein other Asian countries, especially Vietnam, Bangladesh and Indonesia, are benefiting due to a shift in orders.

In the first five months of current year, cotton products imports of the United States declined by 6.1 percent year-on-year. Of these, the US cotton item imports from China dropped by 13.4 percent, while the US imports from Vietnam increased by 9.4 percent. Similarly, the US imports from Bangladesh and Indonesia also rose by 9.1 percent and 10.1 percent, respectively.

The shift in orders from China is due to its declining international competitiveness owing to hike in wages, the appreciation of its currency, high volatility in raw material price, increase in lending interest rates, etc. All these factors raise the cost of production as well as the cost of doing business in China.

Some export-oriented units prefer to tread cautiously due to factors like the fluctuating price of cotton and macro-policy changes in monetary policy. They even pass on some of their large orders to other Southeast Asian countries.

China's apparel exports to the US fell 0.8 percent during January-May period, even though the total US apparel imports increased by 6.3 percent. While the US apparel imports from Vietnam grew 17.8 percent, the imports from Bangladesh and Indonesia increased by 15.8 percent and 17.5 percent, respectively.

Likewise, the US wool product imports during the five month period increased 12.7 percent year-on-year, while the US wool product imports from China fell 5.7 percent. On the other hand, the US imports of wool items from Vietnam, Bangladesh and Indonesia rose by 22.2 percent, 6.2 percent and 45.2 percent, respectively.

These figures clearly indicate that the competitiveness of China's textiles and apparel industry is declining in the global market. This fact is also corroborated by several Chinese companies, which have witnessed around 20 percent year-on-year reduction in their export orders this year.

Fibre2fashion News Desk - China

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