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Domestic cloth manufacturers face loss of orders

23
May '08
China, which once boasted of its low cost of production, has been deceived of this vantage due to various reasons like the new labor law, RMB appreciation and decline in export tax rebate.

On the other hand, Taiwan's fabric making industry still managed to have an edge over China in terms of quality, production cost, time of delivery and other aspects.

As a result, last year, China lost most of its crucial orders to Taiwan. However, starting from this March, situations have begun to change again.

The rapid appreciation of New Taiwan dollar and increase in the cost of basic raw materials have started impacting the textile industry of the country, as a result is gradually losing its orders that originally belonged to China.

An inspection made on one of the Taiwan cloth manufacturers showed that in 2007, the gross profit of the enterprise amounted to 12 percent, of which 8 percent went towards various fees and taxes after which the real net profit stood at mere 5 percent. At such agonizing rate of exchange, receiving orders would only result in incurring losses.

In other words, it is impossible for any country to escape from the impacts of depreciating of dollar and inflation and the global market on the whole depicts a gloomy scenario.

Fibre2fashion News Desk - China


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