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Manufacturers, Exporters, Wholesalers - Global trade starts here.
Decreased Textile Exports Forecasted

Textile industry analysts say China's textile exports will shrink by about US$2.5 billion, affected by restrictions slapped by the United States as well as the revaluation of the Chinese currency.

An immediate consequence will be white-hot competition on the home market as a huge proportion of products that would have been sold overseas will flood to the domestic market, said analysts with Shanghai Textile Holding Group Co. in an interview with Xinhua.

China's textile, apparels, shoes and hats manufacturing industries rely 51 percent on export and are therefore vulnerable to currency fluctuations and changes in the international trade environment, they said.

Following the end of the global quota system on Jan. 1, the United States and the European Union have set limits on Chinese textile exports, saying a surge of Chinese products have disrupted their markets.

China has reached a consensus with the EU to settle their trade dispute, but has not been able to strike a win-win deal with the United States despite six rounds of talks.

Experts say the 2.1-percent revaluation of the Chinese yuan as of July 21 has also burdened domestic textile firms and further scraped their profit margin to 5 percent from the previous 7 percent.

Besides the textile export drop, they predict the growth rate of the industrial output would slow down by about 3.5 percent.

But analysts foresee little impact on the chemical fiber industry, where the cost of imported raw materials is relatively lower and most products target the domestic market.

(Xinhua News Agency October 31, 2005)

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