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'China's textile sector situation not optimistic in H2'
02
Sep '13
The overall situation in China’s textile sector is not optimistic in the second half of the current year, says a recent report on ‘industrial economic operation in the first half of 2013’ released by the Chinese Government.
 
The report cites decline in domestic demand growth and the difference in prices of domestic and imported cotton as the main factors affecting the performance of the Chinese textile industry.
 
According to the data, the Chinese textile industry’s added value increased by 8.9 percent year-on-year during the first half of 2013, the growth rate declining by 2.3 percent points compared to last year.
 
Among the products with added value, the production of yarn and fabric increased by 8.8 percent year-on-year and 9 percent year-on-year, but their growth rates were 4.4 percent and 2.7 percent lower compared to the growth rates recorded during the corresponding period of last year. Garment production increased by 0.6 percent year-on-year.
 
The report notes that the operating efficiency of Chinese textile enterprises also improved during the first half of 2013.
 
From January to July 2013, Chinese textile industry realized profits of 131.8 billion yuan, and the main business income margin was up 4.6 percent year-on-year, corporate loss narrowed to 17 percent, and the total loss suffered amounted to 13.61 billion yuan, down 5.8 percent year-on-year.
 
The report says that although the Chinese textile industry performance remained stable during the first six months, some factors still trouble the industry.
 
The growth rate in China’s fixed asset investment in the textile industry slowed down during the first half, and domestic clothing consumption growth rate dropped to about 10 percent.
 
In addition, the difference in prices of domestic and foreign cotton continues to remain large. At the end of June, the price of China’s 32s cotton remained about 4,500 yuan/ton higher than the international cotton price, and for other varieties, the price of domestic cotton was about 4,200 yuan/ton higher than the international cotton price. This wide price gap has resulted in several small enterprises limiting their production activity.
 

Fibre2fashion News Desk - India

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