“According to customs statistics, in the first quarter of this year, China’s textile and garment exports reached US $34.06 billion, a year-on-year decrease of 9 percent. Of which, March exports registered US $12.16 billion, an increase of 2.9 percent year-on-year, and 82.3 percent from the previous month. ..To resist the impact brought by the financial turmoil on China’s textile and garment industry, China’s export rebate rate of textiles and garment has increased from 15 percent to 16 percent starting from April 1 this year, this is the fourth increase of export rebate rate on China’s textiles and apparel since last August. ..The General Administration of Customs says that China’s textile and garment exports will continue to face four serious challenges, like continued poor demand in overseas markets, despite China’s policy adjustment could help reduce pressures on export enterprises and boost their confidence. ..First, external demand continues to be in downturn. At present, unemployment rate in Europe, the United States and other developed countries is rising, consumer demand is declining, thereby inhibiting exports of China’s textiles and garment. A survey shows that nearly half of China’s export-oriented garment manufacturers have received less 30 percent orders compared with the same period last year. ..Second, trading environment is deteriorating. Since last year, Europe, the United States and other developed countries have introduced more trade protection measures against China’s textile and garment products, export trading environment continues to deteriorate. ..Third, costs of exports rapidly increase. In recent years, China’s raw materials and labor costs have rapidly increased, raw material costs of China’s textile industry rose by 10-20 percent last year, labor costs increased by 30 percent. At the same time, each one percent of the RMB appreciation will reduce 2–6 percent of sales profit margin of the textile industry. Last year, the cumulative RMB appreciation against the U.S. dollar was up to 6.8 percent, and the RMB appreciation against the euro was up to 11 percent in total. ..Fourth, development of independent brands drops behind. In the first half of last year, China had more than 10,000 textile and garment enterprises closed; most of them had no license, or OEM export enterprises. After the setback in exports, they shifted towards domestic market, but they had no brands, no domestic sales experience, no distribution channels, and such barriers increased pressures on the survival of these enterprise. .
Date:5/14/2009
Source:CCF