China's textile industry as a whole shows a slowing trend

Although China's textile industry performed well during the start of the “Twelfth Five-Year Plan”, it showed a slowing trend overall. Statistical data show that since the beginning of this year, domestic sales have continued to flourish, and the internal structure of the industry has accelerated the structural adjustment and the quality of operations has been promoted. As a result, the profitability of Chinese textile companies has increased compared to the same period of last year, but due to rising costs and tight funds. Affected by other factors, profit growth has continued to fall.

According to customs statistics, from January to May, China's textile and apparel exports slowed by 0.85 percentage points from the January to April export growth rate of 27.05%. The increase in export prices is an important factor supporting the rapid growth of exports.

According to statistics from China Textile Industry Association Statistical Center, from January to May, China's textile and clothing export price index increased by 21.49 percentage points year-on-year, of which textile export price index rose by 24.91 percentage points.

At the same time, investment in the textile industry was affected by the tightening of the capital environment, and the number of new projects started in the industry was reduced. According to statistics, from January to May 2011, the number of new projects started in the textile industry was 5,929, a year-on-year decrease of 2.52%.

In recent years, the high price of cotton has undoubtedly been a key factor in the pressure on raw material costs. Since the second half of 2009, China's cotton prices have been rising steadily. Cotton prices have been at a high level of 24,500 yuan/ton.

Although companies have tried to absorb cost pressures by adjusting product prices and increasing production efficiency, price transmission still cannot simultaneously absorb the pressure of rising costs. In addition, due to the combined influence of factors such as tighter capital environment, sluggish turnover, and the use of chemical fiber substitutes, textile companies' ability to accept higher cotton prices has continued to weaken.

In addition, the capital environment has tightened, raising interest rates has brought financing difficulties. For many years, the financing of the textile industry, and in particular the majority of SME financing in the textile and apparel industry, has been a problem faced by the industry.

This year, the financial environment of textile companies, especially SMEs, has become more tense. According to statistics, from January to May 2011, the financial costs of China's textile industry increased by 36.64% year-on-year, which was higher than the 5.89 percentage points growth in main business income during the same period.