China's textile industry will face a more challenging international trade situation as Sino-EU and Sino-US textile agreements mature by the end of this year and the next year respectively, according to a report from the Economic Information Daily.
EU and US have the obvious intent of imposing anti-dumping and anti-subsidy measures on China’s textile products. Such measures will cause significant damage once implemented, said insiders.
Impacted by many factors including various trade barriers abroad, Chinese enterprises suffer from many defects such as lack of self-owned brands, inferior position in the international division of labor, and weak capability in making profit in the industrial chains.
Market shares lost by China's textile products in the US market in 2006 were picked up by other Asian countries. Although the Sino-US agreement is favorable for domestic US industries, the implementation of the agreement has not changed the trend of shrinking production in the domestic textile industry in the US, said Lu Sheng, a textile trade researcher from Donghua University, after analyzing authoritative statistics.
In addition, some developing countries such as India, Peru and Colombia took restrictive measures including anti-dumping on China’s textile products, according to Cao Xinyu, vice-chairman of the China Chamber of Commerce for Import and Export of Textiles.
Great uncertainties will exist in textile exports after the year 2007, predicted Cao. Many enterprises advised the relevant government departments to deal with the situation after the agreements become mature in advance.
China's textile and garment exports reached US$144 billion in 2006, with a surplus of US$125.9 billion, accounting for 70.9 percent of the country’s total surplus of goods trade. China's textile industry maintained a growth of 14.9 percent in the first quarter of this year, with a surplus of US$27.36 billion.
Changes in the international industrial structure are the main reason for China's durative big surplus in recent years, said Gao Hucheng, vice-minister of the Ministry of Commerce. However, high surplus does not equal high profit.
In fact, the exporters only gain a small part of profit when Chinese products are exported to the European and US markets, as importers and retailers are the biggest beneficiaries. China's textile products manufacturers only take 10 percent of profits in the whole benefit chains, while 90 percent of profits belong to the brand owners, wholesalers, distributors and retailers, said experts.
Chinese textile enterprises also import a great deal of cotton, cloth and advanced textile equipment from the United States every year in order to meet the export demand.
Lack of brands resulted in gaining the minimum profit in the whole value chain. The urgent tasks for China’s textile industry are to build brands, adjust industrial structure and change the mode of growth.
