Growth of China's textile industry slows

Updated: 2007-03-21 15:38

The growth rate of sales of Chinese textiles slowed significantly last year, dropping by almost 20 percent, due to a higher valued Chinese currency, a cut in export tax rebates and higher labor costs, according to Guotai Junan Securities.

Textile enterprises reported sales of 2.42 trillion yuan (318 billion U.S. dollars) in 2006, 21.33 percent higher than the previous year but five percentage points lower than the growth rate in 2005.

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After-tax profits reached 88.3 billion yuan, a rise of 27.96 percent but eight percentage points lower than in 2005.

Fixed asset investments in the industry totaled 203 billion yuan (25.3 billion U.S. dollars) in 2006, a year-on-year rise of 21 percent, but 17 percentage points lower than the previous year.

Industry profits declined for the sixth straight month, according to the report, which was published in China Securities Journal.

China's exports of textile, clothing and accessories in Januarygrew 18.55 percent compared to the same month last year. The growth rate was 12.3 percentage points lower than the growth rate in November, 12.2 percentage points lower than December's rate of growth, according to statistics of China's General Administration of Customs.

Chinese textile and clothing companies have enjoyed sustained rapid export growth following the country's accession to the WorldTrade Organization (WTO)(find more in WTO package) in 2001.

However, Chinese textile and clothing exports have encountered criticism from Europe, the United States and some African countries.

The U.S. government filed a complaint with the WTO in early February, alleging that China is using export subsidies to help its companies, including those in the clothing sector, to compete in world markets.

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