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Textile industry is main driver of urbanization in China
Feb '14
Recently, the Chinese Government has put its agenda of urbanization on a higher level, according to which urbanization is neither a row of tall buildings nor a simple transformation of rural household registration, but transfer of rural employment to industrial employment, wherein farmers become industrial workers enjoying full identity and corresponding benefits.
China has a huge population and hence, a large number of rural employed population needs to be transferred to the industrial sector to solve the problem of surplus rural labour, and the textile industry can play an important role in this labour transfer.
In fact, the development of the textile industry for over 30 years has laid strong base for acceptance of rural surplus labour transfer.
Urbanization would also bring considerable market dividends to the textile and garment industry. According the latest statistics available, in 2012, average urban clothing expenses were 1,823.4 yuan compared to rural expenditure of 396.1 yuan, thus showing a difference of 1,427.3 yuan.
At present, China’s urbanization level is 52.57 percent, and if the level is increased to 70 percent, calculating at current levels of consumption, the increase in urbanization would boost the clothing market.
Secondly, urbanization would also result in reduction in the cost of raw cotton, which would be a positive development for the Chinese textile industry. For a long time, China’s cotton planting costs have been higher than the international average, mainly due to relatively backward planting techniques. Now, there is focus on intensive management of large-scale agriculture to increase productivity, and thereby reduce the cost of products, while improving the quality. Thus, urbanization would also help in reducing cotton costs, while improving quality.
Further, urbanization helps stabilize employment of workers and improve retention ratio. One of the reasons for the current recruitment problems faced by the Chinese textile industry is lack of social welfare and social security extended to the employees, which does not really make them local urban workers. Hence, implementation of urbanization policy in order to fully integrate workers into local society is necessary for ensuring stable employment.

Fibre2fashion News Desk - India

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