Ministry: no surge expected in China's textile exports

China's textile export would not show a sharp increase after the termination of license management system on textiles exported to the US and Europe, said a foreign trade official with China’s Ministry of Commerce recently said . Meanwhile, China's textile industry is under dual pressure from weakening demand at home and abroad.

After the integration of global textile trade in 2005, China reached agreements with the EU and the US regarding China's textile exports to those markets. At the end of 2008, the agreements were all terminated as scheduled. Starting January 1, 2009, China no longer will implement quotas or licenses management for textiles shipped to the US, nor will it grant licenses for textiles exported to the EU. In addition, the system of reviewing the qualifications of businesses is also repealed.

The growth rate of China's textile exports began to decrease in 2008. According to statistics by the General Administration of Customs, China exported 185.17 billion USD of textiles and clothing in 2008, up 8.2 percent from the previous year. However, the rate of growth was down by 10.7 percentage points from that in 2007.

The official thinks the growth rate of China's overall textile exports in 2009 will continue to slow as the economy is affected by rising labor costs, the appreciation of the renminbi and reduced demand in major export markets.

In addition, after a period of transition following the textile integration in 2005, the potential of exports of relevant products have already fully released. Given that, no sharp increase is expected in exports of Chinese textile products that had been under bilateral textile agreements with relevant countries. There will be no threat to any other exporters. That is fully demonstrated by the stable development of international textile trade in recent years.

The official hopes that China's textile industry and its major trade partners on the world market would find ways to complement each other's advantages and improve their inter-dependence. He believes that China's textile trade with other countries after 2008 will see a stable and healthy development.

He pointed out that the textile industry is one of China's important labor-intensive industries. It directly employs over 20 million people and indirectly over 100 million people. The textile trade has always been a major concern for the Chinese government and the industry.

Chinese textile enterprises are facing a tough time for their production and operation due to various negative factors including the yuan appreciation, the rising production costs and the strain on liquidity, said the official.

Especially since the third quarter of 2008, China's textile industry has encountered pressure from declining demand both on the domestic and international market as the country's real economy began to feel the negative impacts of the spreading international financial crisis.

In the first 10 months of 2008, newly-launched fixed asset projects in the textile industry dropped 7.7 percent year-on-year. Orders also decreased. During the 104th China Import and Export Fair, the contract value in textiles dropped by 31.5 percent compared with the previous fair.

Enterprises are feeling the chill. The number of enterprises that stopped production and went bankrupt increased. Large scale textile enterprises in China experienced negative growth in employment. And small and medium-sized enterprises recorded serious downsizing.

Source: People's Daily Online