“Zhao points out that being influenced by the world financial crisis, demand from international market has significantly reduced, international competition is increasingly, pressures from trade protectionism have further aggravated, in turn, all the factors have impacted domestic market, as a big textile export province, Shandong’s textile industry faces higher risk of downtrend. ..In Shandong’s textile and garment industry, most enterprises are small and medium-sized units with low-level profit at average, they are very difficult to obtain loan, 80 percent of them fade insufficient liquidity, some enterprises cannot keep normal operation. ..In China, export tax rebate plays an important role for export enterprises to maintain their shares in international market. Take the textile and garment industry as an example, every increase of one percentage point of export tax rebate rate will promote 7.89 percent to total profits of the textile and garment industry. ..To protect exports does not simply mean to maintain market share, it should have more meaning in protecting export enterprises, export industries and employment. China’s export market share may lose its status in international trade before the crisis, if China gives up when being impacted by the crisis. ..Relevant data show that labor cost is US $0.22 an hour in Bangladesh, US $0.33 an hour in Cambodia, US $0.38 an hour in Vietnam, US $0.51 an hour in India, while in China labor cost is US $1.08 an hour. China’s labor cost advantage of textile and garment enterprises has decreased evidently, part orders of Europe and the United States have shifted to neighboring countries in large number. ..A report released by a global business consulting firm points out that China has lost its status of the lowest manufacturing cost in world market, the title of “World Factory” is given to India and Mexicom. The report says that manufacturing cost between China and the United States moves closer, manufacturing cost of Chinese factory only lowers 6 percent than U.S. factory. .


Source:CCF Group