China's textile industry in need of urgent policy support

26 Feb '14

3 min read

The textile industry in China is in need of an urgent policy support, according to a recent report “CCID Outlook 2014 - China Industry and Information Technology Development Analysis and Forecast Series”, released by China Center for Information Industry Development (CCID), a Ministry of Industry and Information Technology think tank.

The Outlook 2014 mentions the challenges facing the Chinese textile industry, including weak demand and heavy losses in some industries, and suggests measures for further expansion of domestic demand, including reduction of corporate tax.

The report suggests that measures should be taken to encourage private capital to improve financing environment of the textile industry. Secondly, it stresses on increasing investment in the central and western regions to have a positive effect on expanding domestic demand.

Thirdly, the report suggests strengthening domestic brand awareness and training to expand the influence and consumption of local brands and cultivate new growth points of consumption. Fourthly, it suggests increasing investment in rural infrastructure, especially in the construction of logistics and distribution system, and tap and release the potential consumer demand in rural areas.

To improve export environment, Outlook 2014 suggests development of export credit insurance, and expanding the reserves of commercial banks entrusted loan-lending platforms and channels. It recommends further promotion of cross-border renminbi settlement work, accelerating the establishment of offshore renminbi trading center, and comprehensively promoting the internationalization of the renminbi, to reduce the impact of RMB appreciation.

Thirdly, it recommends active promotion of bilateral and multilateral trade cooperation, and strengthening trade links with emerging economies to reduce dependence on the US and Europe for export. Fourthly, it stresses on good inspection, quality certification and other public services, promoting China’s textile products with international quality standards, and enhancing product credibility and visibility.

It also speaks about the role of trade associations and other intermediary organizations, especially in establishment of export monitoring and early warning mechanism to help and guide enterprises to effectively deal with trade friction, and reduce export risks.

It suggests creation of a favourable legal environment and integrated security conditions for China's textile enterprises to invest overseas. It advises enterprises to carry out energy saving, and comprehensive utilization of resources to enhance the capacity and improve the efficiency of their resource use.

Importantly, it recommends cancellation of cotton import quotas andsliding tax system to protect the interests of farmers, as well as reform of the temporary storage of cotton and import management system.

Lastly, the report advises textile enterprises to effectively reduce the tax burden and strengthen the industry run monitoring and early warning.

Fibre2fashion News Desk - India

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