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Slowdown continues to snag Chinese textile industry
Nov '12
The slowdown that the Chinese textile industry experienced during last year continues to snag the industry even in 2012. This can be determined from the fact that all economic indices including production, sales and investment in the sector moved sluggishly during initial seven months of the current year.
Production of 37,000 large-scale textile units in the country grew to 3.14671 trillion yuan during January-July period, increasing at 10.9 percent year-on-year, which is considerably less than the 18.8 percent growth achieved during the corresponding period of last year.
Likewise, sales of the large-scale enterprises to domestic markets grew by 12.5 percent year-on-year to 2.577 trillion yuan, much lower than the growth rate of 32.8 percent registered in January-July 2011.
Similarly, textile exports of large-scale enterprises grew by just 0.3 percent year-on-year to US$ 141.58 billion during January-July this year, as against the 25.3 percent export growth achieved during same period last year.
Besides production and sales, a fall has also been noted in new investments coming in the industry. With a year-on-year rise of 16.9 percent, investments in fixed assets during January-July totalled 416.4 billion yuan, which however was 19.5 percent lower than investments attracted during the same period of 2011.
Impacted by poor demand in domestic as well as overseas market, 18.4 percent of the Chinese textile firms are countering losses, which increased by 124.2 percent during first six months of the current year, against same period of 2011.
As noted by China’s Textile Industry Association, during mid-August cotton was priced around 5,000 yuan more in domestic market as compared to world markets, which is almost 67 percent more than the gap in domestic and world market prices noticed early this year. 
The widening price gap is one of the major constraints, which has negatively impacted the competitiveness of the country’s textile sector, it said.
It has, in fact, become a key concern impacting the operation of the country’s textile industry, especially after the new national cotton purchase and release policy becoming effective in September, it added.

Fibre2fashion News Desk - China

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