The Hong Kong textile industry is following trends, quitesimilar to its counterpart in the clothing sector. During the recent past,there was a stagnancy overtaking the once vibrant garment industry which hasseen its glory diminishing with each passing year. In the same vein, fortunesof the textile industry too are witnessing a decline in recent years.


Exports from the textile sector are posting negative orminiscule growth rates since the last three years. Global shipments which hadrecorded a negative growth in 2005 of 3.4 percent in comparison to 2004 rose bya marginal 0.5 percent to touch US $13.85 billion in 2006 from $13.79 billionin 2005.


In the following year of 2007, it slipped to $13.42 billionto clock de-growth of 3.1 percent. The performance worsened in the first sixmonths of the current year. Growth rates dipped further to 5.4 percent incomparison to the same period of 2007 to reach $6.34 billion.


China, which is its biggest customer with a share of 69.6 percent of overallshipments of textiles, has also witnessed a downturn in export revenues. Forthe first half of the current year, shipments have seen a downfall of 5.4percent to touch $4.42 billion when corresponded with figures of the previousyear.


For the preceding three years too, shipments which stood at$9.44 billion in 2005, grew to just $9.70 billion in 2006 to record a nominalgrowth of 2.8 percent, to fall again in the very next year. Shipments fell wayback below 2005 figures to attain $9.42 billion in 2007 to wipe out the gainsof the previous year.


The countrys second largest customer, Vietnam has also seenits imports of textiles sliding or staying near dormant in 2005 and 2006, butmanaged a dramatic turnaround in 2007 and more so again in the first six monthsof the current year. In 2005 Vietnam imported textiles worth $332 million and$341 million in 2006 to register a growth of a mere 2.7 percent.


But 2007 was the year: the once morbid textile exportsturned on its heels completely. Shipments soared to $443.0 million to clockgains of an incredible 29.9 percent. This superlative performance was followedby another, when shipments in to Vietnam posted a gain of an unbelievable 29.7percent to reach $265 million in the first six months of 2008 over thecorresponding period of the previous year.


Out of the 30 major countries to which exports from Hong Kong originated, the territory could manage to increase its exports of textiles toonly 12 countries, while shipments to the other 18 countries posted negativegrowth rates.


Amongst the other countries to which Hong Kong could improveits performance in the period Jan-June 2008 vis--vis the same period in 2007were Honduras with a gain of 18.8, Republic of Korea 17.4, Germany 17.2, Taiwan14.1, Indonesia 11.5 and Cambodia 9.2 percent.


Amid the 18 other countries which saw a fall in their growthrate of imports of textiles in the same comparative period from Hong Kong were Philippines 20.3 percent, India 16.6, Jordan 16.5, Macau 16.1 and then the USA with 13.7 percent. These countries are among the countries with a major value inimports.


Hong Kong clothing companies have built a reputation for reliability. They areable to deliver quality clothing articles in short lead times, as foreignimporters and retailers became more and more demanding to tighten up supplychain management to ensure that the ordered merchandise reaches the store floorat the right time.


But after the elimination of quotas in 2005, China signed individual agreements with the US and EU for continuation of quotas on a select numberof categories. Along with the above agreements, tariffs on exports of allproducts of Hong Kong origin including that of textiles and garments wereremoved from January 1, 2006.


 

To take advantage of the quota agreement of China with the US and EU and also due to the high cost of conducting their manufacturing operations in the administrative territory, a lot of business shifted to the mainland, which has ultimately led to the sluggish growth in exports of both; textiles and clothing.


Exports of textiles from Hong Kong

 

(Million US$)


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Source: Hong Kong Trade Development Council