Over 70% Chinese Textile Firms Feel Heat of Global Financial Crisis


At the dawn of economic recovery in recent months, Chinese textile exporters are waiting for more pickups. The "China Textile & Apparel" journal of Adsale Publishing Limited has released 2009/10 China Textile Market Outlook Survey Report, revealing impacts experienced by Chinese textile enterprises during the global financial crisis and their business outlook for the next two years. Industry trends in five aspects were also covered in the Report. The survey was conducted in co-operation of Synovate.


The survey took place in April and June 2009 in the form of individual face-to-face interviews and online questionnaires to collect views of totally 800 entrepreneurs, managers and professionals from the textile industry.


The "Surviving Tough Times: Now and The Future" Report discusses a) development and outlook of Chinese textile enterprises and b) how they coped with the global economic downturn that followed the credit crunch.


Switch Over to Better Quality


The Report says Chinese textile players are working to enhance their productivity and many of them are able to maintain their development amid the international financial crisis. Their endeavor is observed in five areas: technical application and R&D, investment, market development, product quality and human resources, in the hope of grasping more market opportunities when the economy revitalizes. These efforts reflect that the Chinese textile industry is entering an era of better quality, and the focus of the market competition is likely to shift from price and quantity to quality and product differentiation, leading to increased market integration and specialization.


The Report has revealed that:


  • In the aspect of technical application and R&D, technological introduction and development will gain further importance among textile enterprises. About 67% of respondent enterprises reported their intent to invest more on R&D in coming years. Among them, textile processing firms are the most enthusiastic group in such investment, thus the demand of imported textile machinery is likely to persist in China.
  • Second, capital investment is essential when enterprises desire to improve themselves. The Report says that Chinese textile enterprises are still confident in mid- to long-term investment despite the current unfavourable economy. About 55% of the respondents reported to prefer an investment payback period spanning between two to four years. About 63% of them agree that the changing international market is the biggest source of risk for their current investment decisions. It is anticipated that investment projects of these enterprises will gradually return on track when the economy is firm in the times ahead.
  • Third, when asked about developing domestic and overseas markets, a number of respondents experienced that the fact that OEMs (original equipment manufacturing) no longer meet today's market needs. Despite the hurdles, brand building is progressively important in the domestic market. Market competition used to be less severe in the Chinese market in the past, but it has become more and more tough for Chinese players to dominate the domestic textile and apparel market as the country opened its door to overseas companies. About 48% respondents agree that the domestic market is shared by more market participants from home and abroad. When opening overseas markets, about 53% of the respondents tend to appoint local distributors to reduce risk and cost.
  • Fourth, product and quality enjoy higher priorities and are on the top of the agenda. About 86% of the respondents are found to view that quality is critical to the development, a significant percentage increase as compared to two years ago. They also expect that new products will contribute more to sales and profits.
  • Fifth, in the area of human resources, more talents for technological development are needed across the country. The need and eagerness for various types of talents is particularly acute in East China.