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UPDATED: May 5, 2008 NO. 19 MAY 8, 2008
China Textile Test
China's textile industry faces difficult times, but can survive them and create a brighter future

Sun Ruizhe, Vice Chairman of the China National Textile and Apparel Council (CNTAC), shared his views with Beijing Review while analysing the difficulties China's textile industry is now confronted with.

Beijing Review: What's the position of China as a major textile and apparel exporter in the international textile market?

Sun Ruizhe: China is not the world's largest textile exporter as many Chinese believe. The European Union (EU) is the largest exporter, accounting for 32.6 percent of the world's total, according to WTO statistics.

China in fact is the world's third largest textile importer, next to the EU and the United States. EU countries rely on bilateral trade among them for the largest supply of textile products, and China is the second largest textile supplier to the EU. The suppliers of textile products to the United States are comparatively diversified, with China being the largest and the EU the second. The rest includes Turkey, India and Pakistan.

China is the largest garment exporter, accounting for 30.6 percent of the world's total exportation, and the second is the EU, accounting for 26.8 percent. The first three largest garment importers are the EU, the United States and Japan.

What's the trend of the global textile product trade and what's the situation that faces Chinese textile manufacturers?

First of all, the international trade of textiles and apparels has increased steadily. I have seen some experts predict that the global textile and apparel trade would grow at an annual rate of 5 percent in the next five to 10 years. The growth of international trade in textile products last year stood at 7 percent, while that for global apparel trade was 12 percent. We are optimistic that the growth will continue in the future.

China's domestic demand continued to increase last year, with that for clothing growing 32 percent, 14.5 percentage points higher than the growth for general consumable items. Besides, sales in the domestic market left sales in overseas markets far behind. For example, exported textile products accounted for only 13 percent of the total textile output last year, which was much higher a few years ago. We should be confident with the importance of China in the global textile and apparel supply chain. Also, the rapid increase in domestic sales has given us confidence in making the industry stronger.

What are the pressures on China's textile manufacturers in pursuing further development?

The textile and apparel industry in China is at a crucial stage as pressures mount due to the reduction of export tax rebates and renminbi's appreciation. Besides, costs of labor, raw materials such as cotton and wool, as well as energy have continued to go up. Furthermore, manufacturers' operation costs also have increased due to the government's stricter environmental protection measures. A larger pressure came from the bank, such as the hikes of loan interest rates, and more restrictions on granting loans to enterprises that are characterized by "high energy consumption, high pollution and high emission," which include the textile and apparel industry.

Under these pressures, we should rationally and objectively reconsider our development modes. The textile industry in China should no longer follow the old developing course of mere scale expansion. We should find a new productivity-oriented growth pattern.

How should textile manufacturers improve their productivity?

To improve productivity, enterprises should on the one hand increase their technological level and turn their labor-intensive production into technology- and capital-intensive production. On the other hand, they should guarantee the quality of their products, shoulder their social responsibilities including employment behavior and environmental protection, and adhere to the fair trade principle.

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