Textile SMEs face difficult situation in China

26 Nov '13

2 min read

The small and medium enterprises (SMEs) in the textile sector, which play an important role in the development of the Chinese industry, are facing difficult situation, according to a recent analysis made by Champoux consulting.

The report points out that internal development imbalance still exists, as large enterprises are further consolidating and stabilizing while small and medium businesses are still facing relatively difficult period.

According to data, SMEs account for 90 percent of total number of enterprises in China, providing 80 percent of urban jobs, and contribute about 60 percent to GDP. In this, the role of the textile industry is particularly important.

But, the development of SMEs still faces bottlenecks due to domestic and international economic slowdown, fluctuations in raw material prices, rising labor costs, increasing pressure on energy conservation and other factors.

Among the current constraints of textile SMEs, the most prominent is the high price of domestic cotton, which forces SMEs to either limit or discontinue production.

The other major problems are difficulty in getting finance, and difficulty in recruitment of skilled labour, which restrict the development of the enterprises.

The China textile industry analysis research report 2013-17 from Champoux consulting says looking at the current situation, the overall development situation and environment for SMEs is negative.

The report says the Chinese textile industry is currently in a transition period of structural adjustment, with industrial development being concentrated on large enterprises. In this situation, the development of SMEs would be increasingly difficult.

Fibre2fashion News Desk - India

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