China's textile industry still faces instability. Textile companies should strengthen their resilience

In 2011, the major operating indicators of textile enterprises above designated size in China maintained a relatively fast growth trend. However, due to the pressure from many parties, the growth rate of its key indicators showed a trend of slowing month by month. The China Textile Industry Federation expects that China's textile industry will continue to face instability in 2012 and urges textile companies to strengthen risk control and improve their ability to respond.

The reporter learned from the China Textile Industry Federation today that in the first half of 2011, China’s textile enterprises above the designated size had achieved a total increase of 27% in gross industrial output value. However, due to the influence of unfavorable factors such as fluctuations in raw material prices, power shortages, rising labor costs, and lack of external demand, production growth continued to slow down. In the same period, the growth rate of investment in China's textile industry continued to decline, and new projects started to grow slowly, only up 2.3% year-on-year. During the period, investment in the central and western regions showed rapid growth, which was significantly higher than that in the eastern region. The pace of the transfer of the Chinese textile industry to the central and western regions is accelerating.

In the first 12 months of 2011, the country’s textile and apparel exports grew nearly 20% year-on-year. According to calculations, affected by factors such as the optimization of product export structure and rising production costs, the export prices of textiles and garments during the same period have increased by about 20% year-on-year, and the growth of exports has reached 98%. Excluding price factors, the number of textile and apparel exports increased by only 0.48% year-on-year. It is worth mentioning that China's domestic market growth is still the main support point for the development of the textile industry.

According to the analysis of the China Textile Industry Federation, from the perspective of factors affecting the textile industry in the first half of this year, the downward pressure on the international market demand in 2012 is more obvious, which will affect the growth rate of China's textile industry's exports. Wang Tiankai, president of the China National Textile and Apparel Council, stressed that the Chinese textile industry must pay attention to the export situation. Due to the sluggish demand in Europe and the United States and the slow recovery of the market, coupled with continued high-cost production, this year's export growth will not be optimistic.

In addition, although the acceleration of urbanization, the improvement of residents' income level and policy support will help China's domestic market to continue to grow steadily, the fluctuations in the prices of raw materials such as cotton and chemical fiber will continue to increase the risk of the textile industry. The increase in labor costs and rising energy and power costs will increase the production costs of the textile industry. All in all, in the first half of 2012, the Chinese textile industry will continue to face high external risks.

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