Recovery of China's textile sector still faces challenges

01 Apr '13

2 min read

According to customs data, China's total clothing exports increased by just 2.84 in 2012 percent over 2011. The growth rate fell 17.20 percentage points from 2011. Therefore, it is expected that the recovery of China's textile industry will continue to face challenges in 2013.

An important reason for competitiveness decline of China’s textile industry is the disappearing of advantage in labor cost. Labor cost in Vietnam and India is only around US $60-100 per month, while it has reached between $350-400 per month in China, and will continue to rise.

Although wages are rising, companies are still encountering challenges in hring labour and staff. In addition, rising costs of electricity and renminbi appreciation have exacerbated difficulties in doing business

According to data from the Textile Industry Association in Shandong Province, 6.97 percent of the big and major textile enterprises in Shandong suffered losses in 2012, an increase of 1.42 percentage points year on year.

The situation of cotton textile industry seems still difficult to turn better in 2013, as currently some companies have started to shut down or collapse. There is ample indication that cotton textile enterprises will have to consolidate or be eliminated.

In order to help textile enterprises tide over the difficulties, associations have proposed the state to adjust or cancel cotton import quotas and sliding floating tariff.

They also suggest to reform current system of cotton purchasing and storage, shrink cotton spread between home growth and foreign cotton and encourage cotton spinning enterprises to build cotton reserves.

This will help ensure reasonable cotton mix and reduce costs, steadily improve product quality and help them engage in fair competition in international market.

The state should provide direct subsidies to cotton farmers, in order to stabilize cotton-growing area, to maintain self-sufficiency rate within mainland China, and to ensure stable and orderly development of cotton industry in China.

Fibre2fashion News Desk - China

More Textiles News - China...