Home / Knowledge / News / Textiles / Will domestic market absorb excessive production capacity?
Will domestic market absorb excessive production capacity?
03
Nov '08
Seriously impacted by economic crisis and a resultant slow growth in exports, Chinese textile enterprises are turning their attention towards the domestic market. But experts are skeptical as, when a large number of textile enterprises shift their attention to domestic markets, the textile industry in China will face at least 30 percent of excess production capacity, not counting swamping of foreign brands and products.

In the first nine months of the current year, China's textile and apparel exports reached US $132.6 billion, a year-on-year increase of 6.72 percent, an awful drop in comparison to nearly 20 percent growth achieved in the same period of 2007. In fact, whatever growth in value that is reflected is due to change in exchange rates.

If effect of depreciation of dollar is removed, China's textile and apparel has actually fallen by 2.7 percent in the first nine months of 2008 compared to the same period of last year.

Although China has a huge consumer base of more than 1.3 billion people, the influx of a large number of enterprises eyeing the local market is bound to lead to fierce competition and will be hard for China's textile industry to avoid price wars in the next few years.

Currently, China's ratio of textile exports and imports is 1:1. Preliminary estimates show that current size of the domestic market is about Yuan 600-700 billion while exports are almost Yuan 700-800 billion. When domestic and some foreign manufacturers sell their products in China's domestic market, value of deliveries in local markets is estimated to reach Yuan 1.050 trillion.

It can be certainly said that the domestic market will not be able to absorb the vast amount of products over and above its capacity leading to a supply and demand conflict and ultimately price wars.

If the above comes true, 30 percent of the existing production capacity will be eliminated, however over a period of three to five years or even longer. After that period, China's textile industry will rely mainly on domestic demand for volumes while foreign trade will be totally dependent on quality rather than volumes.

Fibre2fashion News Desk - China

Must ReadView All

Textiles | On 20th Jan 2017

TEA expects budget to upscale textile skill industry

The Tiruppur Exporters’ Association (TEA) has requested the Central...

Textiles | On 20th Jan 2017

Bangladesh could earn $60 billion in exports by 2021

Bangladesh is expected to earn over $60 billion in exports by the...

Courtesy: PIB

Textiles | On 20th Jan 2017

Govt to help Tangaliya weavers purchase looms: Irani

Government of India will facilitate Tangaliya weavers in purchase of...

Interviews View All

Sachin Sharma
Gem Enviro Management Pvt Ltd

There are no significant differences between virgin yarn and PET recycled...

Priyanka
Studio Priyanka Rajiv

‘To reinvent the age-old tradition of embroidery to suit demographics and...

Victor Chao
Esmetex

‘In future, clothing boundary lines will become increasingly blurred.’

Kevin Nelson
TissueGen

Kevin Nelson, Chief Scientific Officer, TissueGen discusses the growing...

Suresh Patel
Sidwin Fabric

Sidwin Fabric is a manufacturer and exporter of polypropylene textiles and ...

Larry L Kinn
Suominen Corporation

Larry L Kinn, Senior Vice President - Operations Americas of Suominen...

Prathyusha Garimella
Prathyusha Garimella

Hyderabad-based designer Prathyusha Garimella is known for blending...

Judy Frater
Somaiya Kala Vidya

Among the many honours showered on Frater, including Fulbright and Ford...

Igor Chapurin
Chapurin

"Now we can see the Russian trend in international fashion. And Russian...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH
January 2017

January 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


eNEWS
Insights
Subscribe today and get the latest News update in your mail box.
Advanced Search