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Sewing machinery industry gripped by hardships
25
Jul '08
The sewing machinery industry of China is suffering due to the impacts of recession in the textile industry this year. Statistics disclosed by China Sewing Machinery Association shows that profits of the industry have dropped 45.56 percent in the period between January and May resulting in losses for nearly one-third of the total enterprises in the sector.

The total output value of the sewing machinery industry touched 6.1 billion yuan in the same period, recording a year on year decline of 21.76 percent, down by 41 percentage points from the growth rate of last year. On the other hand, sales revenue stood at 6.7 billion yuan, down by 13.53 percent compared to the corresponding period last year.

Profits realized amounted to 300 million yuan, reflecting a year on year decline of 46.56 percent and a drop of 55 percentage points from the increase of last year.

As a matter of fact, exports of sewing machines fell by about 9 percent in the first four months of 2008 with export value also sliding by nearly 2 percent marking the first negative growth in seven years.

China is presently, the world's largest producer of sewing equipments with output accounting for 70 percent of the total produce in the world. Since, domestic machines still caters to low-end levels, closure of small and medium sized domestic garment enterprises is bound to shrink the market demand.

A major problem that faces the industry is that around 10 percent of enterprises providing supporting parts of sewing machines have switched to other industries. In this regard, China Sewing Machinery Association had sought the support of the Ministry of Commerce in March with the hope of restoring export tax rebate rate from the current 9 to 13 percent.

Past records have shown that the sewing machinery industry had maintained a remarkable growth of nearly 30 percent per year since 1999. However, due to the recent upheavals like unrestricted expansion, structural imbalance, weak core competitive power and other similar issues, the industry is going through major adjustments.

Fibre2fashion News Desk - China

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