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China Textile Industry Report 2010/11
2010 is a crucial year for achieving all the targets of the 11th Five-Year Plan (2006-2010) and laying a solid development foundation for the 12th Five-Year Plan (2011-2015). The following is a review of some major targets in Chinese textile industry during the year 2010 and the period 2006-2010 as well as the outlook for 2011.
Major targets review
1. Output
The output of China textile industry increased steadily in 2010. According to the market reflection, the volume of manufactured fiber reached 41.30 million tons in 2010, up 60.70% from 2005. Total industrial production value of statistics-worthy China textile enterprises increased by 1.31 times from 2005 to CNY4765.0 billion in 2010. Of which, the output of chemical fiber, yarn, cloth and garment reached 31 million tons, 27.3 million tons, 79 billion metres and 28.5 billion pieces respectively, up 86.21%, 88.21%, 63.09% and 92.59% respectively.
2. Investment and a relocation of industrial bases
The accumulated investment for statistics-worthy textile projects (whose investment beyond five million RMB) during 2010 reached CNY400.6 billion, 1.51 times more than 2005. During the 11th Five-Year Plan period, textile investment growth in midwestern and northeastern regions of China has surpassed that of the eastern region, which means the widening of the gap between the regions has been halted, and the self-development capacity of central and western regions has increased greatly. In 2010, the share of the textile investment in the central and western regions was 38.55 percent and 9.27 percent respectively, which was 19.13 and 2.66 percentage points more than 2005.
3. Domestic demand
Domestic demand serves as the major factor to stimulate the growth of production, sales and exports of the China textile industry during the 11th Five-Year Plan period. The domestic sales production value of statistics-worthy Chinese textile enterprises accounted for 81.14% of the total production value, increasing 10.38 percentage points from 2005.
4. Export returning to its pre-crisis export level
In 2010, China textile and apparel export were on their way to recovery, as they were rapidly returning to its pre-crisis export level. According to China Customs, the exports value of China's textile and garment amounted to $206.5 billion in 2010, increasing 75.72 percentage points from 2005.
5. Profit
Most industrial index have sent clear signals that the profit growth of the industry is accelerating in 2010. By looking further at the market, textile enterprises in China saw their main business income edged up by 1.33 times from 2005 to CNY4690.0 billion in 2010; profit ratio edged up by 1.91 times from 2005 to 5.44% in 2010.
Factors that shape the development of the industry
1. Competitive advantage of China textile
A research report recently released by the China Customs Magazine under the General Customs Administration shows that although China experienced adverse effects from the international financial crisis, the competitive advantages of China's textile industry exports have been further enhanced. Statistics from the General Customs Administration show that China's textile export amounts decreased 9 percent in 2009 compared with that of 2008. This figure is 7 percentage points less than the overall average decline rate of China's total exports. Therefore, the textile industry has become one of the China's industries which are able to operate well at risks. In the first 10 months of 2010, China exported a total of more than 62.6 billion U.S. dollars worth of textile yarns, fabrics and textile products, an increase of more than 29 percent compared with the same period of 2009, and exported a total of 105 billion U.S. dollars' worth of clothes, an increase of nearly 20 percent.
2. Domestic demand returned to the spotlight
Stimulating the growth of production, sales and exports of the China textile industry , Domestic demand serves the major factor here in the market . We are glad to see that with a long-term countinuty in domestic demand for China Textile,the substantial progress has been achieved by China textile industry in all areas of statistics during the 11th Five-Year Plan periods.
3. Industrial upgrading and innovation
During the 11th Five-Year Plan period, the industry has increased opportunities for independent innovation as an important step in restructuring the industry in China and transforming the model of development, which greatly contributed to companies across the country to invest more in technological innovation and adding more value to their products. During the 11th Five-Year Plan period, the industry has gradually adjusted the structure of export markets, while maintaining the United States, the European Union and other traditional market share based on the positive steps to develop non-traditional export markets, promote market diversity. The export structure needs further optimization and, while use of foreign investment goals have been achieved in terms of quantity; further improvements are needed in order to achieve quality-related goals.
4. Favorable policies.
''Revitalization Plans for the Textile Industry'' was passed in early 2009. One year after China launched the stimulus package and regained economic growth momentum, the textile industry has overcome serious difficulties and has made new developments. Moreover, the global financial crisis has prompted Beijing to hedge the weakening U.S. dollar by encouraging the regionalization of the RMB as a settlement currency for trade and other current account transactions in Asia, and bypassing the use of the U.S. dollar.
Outlook
In 2011, domestic demand will continue to serve the major factor stimulating the growth of production, sales and exports of the China textile industry. China's economy is gearing up to change its growth model from an export driven economy to the one driven by domestic demand by boosting consumption at home.
The U.S. and EU economy was supposed to be what kept global GDP growth modest this year and next. It turns out that may not be the case overseas demand for goods and services should help the Chinese textile industry.
However, China textile industry is still exposed to various problems: the rising inflation in emerging markets, great difficulty in recruitment and increasingly high labor cost; growth of environmental protection cost caused by low-carbon economy as well as unemployment in developing countries. An unrelenting rise in the cost of raw materials is cutting textile corporate profits, in some cases, pushing up consumer prices. The appreciating yuan in China will further slash the marginal profitability of China's textile makers.
Given the perfect industry chain and huge market, it is forecast that China textile industry will continue to possess advantages in the global market in the coming years. For the growth rate of China textile output and exports in 2010, it is forecast below the level of the previous year.
2010 is a crucial year for achieving all the targets of the 11th Five-Year Plan (2006-2010) and laying a solid development foundation for the 12th Five-Year Plan (2011-2015). The following is a review of some major targets in Chinese textile industry during the year 2010 and the period 2006-2010 as well as the outlook for 2011.
Major targets review
1. Output
The output of China textile industry increased steadily in 2010. According to the market reflection, the volume of manufactured fiber reached 41.30 million tons in 2010, up 60.70% from 2005. Total industrial production value of statistics-worthy China textile enterprises increased by 1.31 times from 2005 to CNY4765.0 billion in 2010. Of which, the output of chemical fiber, yarn, cloth and garment reached 31 million tons, 27.3 million tons, 79 billion metres and 28.5 billion pieces respectively, up 86.21%, 88.21%, 63.09% and 92.59% respectively.
2. Investment and a relocation of industrial bases
The accumulated investment for statistics-worthy textile projects (whose investment beyond five million RMB) during 2010 reached CNY400.6 billion, 1.51 times more than 2005. During the 11th Five-Year Plan period, textile investment growth in midwestern and northeastern regions of China has surpassed that of the eastern region, which means the widening of the gap between the regions has been halted, and the self-development capacity of central and western regions has increased greatly. In 2010, the share of the textile investment in the central and western regions was 38.55 percent and 9.27 percent respectively, which was 19.13 and 2.66 percentage points more than 2005.
3. Domestic demand
Domestic demand serves as the major factor to stimulate the growth of production, sales and exports of the China textile industry during the 11th Five-Year Plan period. The domestic sales production value of statistics-worthy Chinese textile enterprises accounted for 81.14% of the total production value, increasing 10.38 percentage points from 2005.
4. Export returning to its pre-crisis export level
In 2010, China textile and apparel export were on their way to recovery, as they were rapidly returning to its pre-crisis export level. According to China Customs, the exports value of China's textile and garment amounted to $206.5 billion in 2010, increasing 75.72 percentage points from 2005.
5. Profit
Most industrial index have sent clear signals that the profit growth of the industry is accelerating in 2010. By looking further at the market, textile enterprises in China saw their main business income edged up by 1.33 times from 2005 to CNY4690.0 billion in 2010; profit ratio edged up by 1.91 times from 2005 to 5.44% in 2010.
Factors that shape the development of the industry
1. Competitive advantage of China textile
A research report recently released by the China Customs Magazine under the General Customs Administration shows that although China experienced adverse effects from the international financial crisis, the competitive advantages of China's textile industry exports have been further enhanced. Statistics from the General Customs Administration show that China's textile export amounts decreased 9 percent in 2009 compared with that of 2008. This figure is 7 percentage points less than the overall average decline rate of China's total exports. Therefore, the textile industry has become one of the China's industries which are able to operate well at risks. In the first 10 months of 2010, China exported a total of more than 62.6 billion U.S. dollars worth of textile yarns, fabrics and textile products, an increase of more than 29 percent compared with the same period of 2009, and exported a total of 105 billion U.S. dollars' worth of clothes, an increase of nearly 20 percent.
2. Domestic demand returned to the spotlight
Stimulating the growth of production, sales and exports of the China textile industry , Domestic demand serves the major factor here in the market . We are glad to see that with a long-term countinuty in domestic demand for China Textile,the substantial progress has been achieved by China textile industry in all areas of statistics during the 11th Five-Year Plan periods.
3. Industrial upgrading and innovation
During the 11th Five-Year Plan period, the industry has increased opportunities for independent innovation as an important step in restructuring the industry in China and transforming the model of development, which greatly contributed to companies across the country to invest more in technological innovation and adding more value to their products. During the 11th Five-Year Plan period, the industry has gradually adjusted the structure of export markets, while maintaining the United States, the European Union and other traditional market share based on the positive steps to develop non-traditional export markets, promote market diversity. The export structure needs further optimization and, while use of foreign investment goals have been achieved in terms of quantity; further improvements are needed in order to achieve quality-related goals.
4. Favorable policies.
''Revitalization Plans for the Textile Industry'' was passed in early 2009. One year after China launched the stimulus package and regained economic growth momentum, the textile industry has overcome serious difficulties and has made new developments. Moreover, the global financial crisis has prompted Beijing to hedge the weakening U.S. dollar by encouraging the regionalization of the RMB as a settlement currency for trade and other current account transactions in Asia, and bypassing the use of the U.S. dollar.
Outlook
In 2011, domestic demand will continue to serve the major factor stimulating the growth of production, sales and exports of the China textile industry. China's economy is gearing up to change its growth model from an export driven economy to the one driven by domestic demand by boosting consumption at home.
The U.S. and EU economy was supposed to be what kept global GDP growth modest this year and next. It turns out that may not be the case overseas demand for goods and services should help the Chinese textile industry.
However, China textile industry is still exposed to various problems: the rising inflation in emerging markets, great difficulty in recruitment and increasingly high labor cost; growth of environmental protection cost caused by low-carbon economy as well as unemployment in developing countries. An unrelenting rise in the cost of raw materials is cutting textile corporate profits, in some cases, pushing up consumer prices. The appreciating yuan in China will further slash the marginal profitability of China's textile makers.
Given the perfect industry chain and huge market, it is forecast that China textile industry will continue to possess advantages in the global market in the coming years. For the growth rate of China textile output and exports in 2010, it is forecast below the level of the previous year.
