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Overcapacity: Chronic problem in textile sector

18
Nov '09
Overcapacity is a chronic problem of China's economy. According to a survey conducted amongst several sectors to get a fair idea of the problem of oversupply in the markets, it was found that, textiles, chemical fiber and some other sectors were found to have serious overcapacity problems.

Survey results depict that more than 63.4 percent of business operators consider that there exists excess capacity in their relevant business, among which 44.8 percent believe that there exists “some surplus capacity”, 18.6 percent say it is "serious surplus capacity"; 27.5 percent believe it is "normal"; 9.1 percent think there is “insufficient capacity”, 8.4 percent feel there is “some shortage in capacity" while 0.7 percent say in their sector, there exists "serious inadequate capacity”.

From the view of different sectors, overcapacity situation of textile, papermaking, chemical fiber non-metallic and steel industries are relatively more serious and more than 70 percent of business operators from these industries are of the opinion that there is "serious surplus capacity" or "somewhat excessive capacity".

With regards to capacity utilization of manufacturing enterprises in 2008, 38.2 percent of manufacturing enterprises were operating at "75 percent or below", 40.6 percent of the enterprises were running between "75 ~ 90 percent", 21.2 percent of the enterprises maintained at "90 percent or above” and average capacity utilization of manufacturing enterprises was 77.1 percent in 2008.

The survey reveals that in the current period the situation of overcapacity has worsened, more so due to the global recessionary trends.


Fibre2fashion News Desk - China


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