Golden era of Chinese T&C exports over – experts

09 Aug '10

2 min read

China's total textile and apparel exports reached US $88.88 billion from January to June this year, up 22 percent over the same period of 2008. Of which, textile exports were $35.65 billion, up 32.3 percent and garment exports stood at $53.23 billion, up 16 percent year on year.

This growth has come despite the sector facing heavy pressures. This proportion is significantly higher than the expectation of the industry, at the beginning of the year. Experts believe that the growth in textile exports is similar to the overall performance of China's foreign trade.

Industrial experts point out that growth rate of textile exports in the first half was higher than market expectation, reflecting multiple factors about warming demand from overseas market, but mainly due to rebuilding of inventories in Europe, the United States and other developed countries.

Overall export growth is expected to be lower in the second half and may even be lower than the first half of 2010. As China's labor costs are increasing in recent years, related enterprises are slowly transferring to other Southeast Asian countries, which will become a trend in the years to come.

Analysts even believe that the golden era of Chinese textile and apparel exports is over, production base of global textiles and garment has gradually shifted from China to Bangladesh, Vietnam, Cambodia and other countries and that the process has already started around the year 2005.

Exporters are less optimistic of the export situation in the second half. Many enterprises believe that export profits will be increasingly marginal in the second half due to changes the RMB exchange rate, rising wages and other factors.

Exports are likely to show polarization as some large enterprises with greater bargaining power and higher risk capability will feel relatively easy to achieve price increases, while some small and medium enterprises will face risks of expanded losses, if they can not raise prices.

Fibre2fashion News Desk