China's cotton textile industry saw a a hefty slump in total profits in the first two months this year, according to data collected from 11254 Chinese textile enterprises (whose annul output beyond five million RMB) surveyed by National Bureau of Statistics of China. Total profits of the industry plunged 11.74 per cent to 3.06 billion CNY. Losses were 35.53 per cent higher than a year earlier.

 

China??s Cotton Textile Industry Faces Growing Pressure

The analysis of economic performance of China??s cotton textile industry in Jan. - Feb. (Part A)

 

Although the Chinese government has published a series of favorable policy for textile industry, the outcome of these fiscal polices in Chinese cotton machinery industry tends to be small at this stage, since the effects of policies is hysteresial, and the industry had extended 2009 spring holiday amid the financial crisis.

 

The growth rate of output continues to shrink

China's cotton textile industry saw a continued decline in the growth rate of output in the first two months this year, according to data collected from statistics-worthy Chinese textile enterprises surveyed by National Bureau of Statistics of China. From January to February, yarn output of the industry reached 1.5037 million tons, up 5.91 per cent from the previous year's period; fabric 3.774 billion metres, down 5.02% year-on-year.

 

Chart 1. Chinese Yarn Output (Year 07-08 vs Year 08-09)

 

 

Accumulated export value sees negative growth for the first time

Goods delivered for cotton textiles and cotton garments exports slumped 14.71 per cent to $8.977 billion in the first two months from the year-earlier period. Cotton textiles exports plummeted 18.96 per cent to $2.307 billion; cotton garments exports plummeted 13.13 per cent to $6.670 billion. All types of trade modes saw a decline in exports from January to February. Processing trade led the slump, down 52.72 per cent from the previous year's period.

 

Table 1. China cotton textiles and cotton garments exports by destination in Feb., 2009 (Unit: 10,000 $)

 

Table 2. China cotton textiles exports by category in Feb., 2009 (Unit: 10,000 $)

Category	Unit	Accumulated amount	Accumulated Value (10,000 US$)	Value (10,000 US$)	Y-on-Y Change (Amount, % )	Y-on-Y Change (Value, %)	Y-on-Y Change (Price, %)
cotton yarn & cotton thread total	tons	56350	19354	0.34	-23.15	-22.55	0.59
woollen cotton yarn	tons	7151	1775	0.25	-36.98	-35.65	2.06
worsted cotton tarn	tons	16241	5654	0.35	-28.26	-25.46	3.88
cotton fabric	10,000 meters	80882	98264	1.21	-20.07	-19.99	0
100% cotton grey fabric	10,000 meters	10465	7629	0.73	-41.58	-40.65	1.39
100% cotton yarn-dyed fabric	10,000 meters	11470	22564	1.97	-28.34	-23.21	7.07
100% cotton jeans fabric	10,000 meters	3692	7489	2.03	-36.35	-28.08	12.78
grey cotton blended fabric	10,000 meters	10807	10258	0.95	140.14	133.52	-3.06
cotton blended yarn-dyed fabric	10,000 meters	3680	5293	1.44	-22.68	-19.11	5.11
cotton blended jeans fabric	10,000 meters	1476	2211	1.5	-25.64	-21.18	6.38

 

As you can see from the above table, except for the 140.14 per cent growth in grey cotton blended fabric exports, exports of the other types of cotton textiles all suffered a decline. 100% cotton grey fabric led the fall, down 41.58 per cent. These figures may indicate that export market is shrinking. (To be continued)