Chinese textile firms may maintain stable growth in H2

14 Aug '13

2 min read

In the first half of this year, the Chinese textile industry was adversely affected by several external factors.

The overall international market remained in doldrums and textile and apparel imports by the EU and Japan declined by 5 percent and 3.2 percent year-on-year, respectively, in May.

Secondly, the difference between prices of domestic and international cotton remained around 4,500 yuan/ton, and the quality of cotton released from the state reserves was low, which added to the pressure on the textile enterprises.

The performance of small-scale cotton spinning enterprises was mainly affected and production cuts were increasingly seen during the period.

Since the second quarter of 2013, a gradual slowing trend was seen compared to the first quarter in the textile industry production and sales.

However, the rebound in China’s textile and clothing export growth in the first half of this year is due to low base of last year.

In the second half of this year, the Chinese textile industry is faced with both favourable and non-favourbale factors.

Among the favourbale factors supporting the development of the textile industry are: domestic market fundamentals are still good; industries are continuing with transformation and upgrading which will strengthen the development of the industry’s inherent dynamism.

On the other hand, the price difference between imported and domestic cotton is still too large, which affects the performance of textile enterprises. In addition, the problem of rising labour costs is yet to be resolved.

However, large-scale textile enterprises are expected to maintain stable growth during the second half of this year. But the second-half growth might be lower than the first half due to increased statistical base of the second half of last year.

Fibre2fashion News Desk - India

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