Chinese textile competitiveness is weakening

12 Feb '07

2 min read

With the gradual appreciation of RMB and reduced textile export tax rebates, the low-cost advantage of Chinese textile products is steadily weakening. At the same time, country's textile exports are facing increasingly stiff protectionism situation in foreign trade.

Recently, the Industrial Division of the State Development and Reform Commission expressed in a report their concern on the prospects of China's textile exports.

The report shows that to the end of 2006, China's textile sector achieved an increase of 21.2 percent of industrial output value, a total profit of 88.3 billion yuan. However, while exports maintained a good situation, textile industry, which accounts for 15 percent of China's exports, is facing an export environment that will undoubtedly become more adverse.

It is projected that if RMB revaluation is over 10 percent, the bargaining power of the whole industry will be significantly decreased, its impact on textile exports will also gradually surfacing. With the integration of global textile trade in textiles and the arrival of 'post-quota era', anti-dumping measures against Chinese textile products in international markets will increase.

Industrial analysts point out, the profit rate of China's textile industry has been fluctuating around 3.5 percent. With the deterioration of the export environment, domestic demand will become the major textile market for Chinese textile products.

Fibre2fashion, News Desk - China

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