Status quo of textile industry

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  China’s economic status of textile industry is basically normal in 2016, with stable growth in production and marketing, benefit and other indicators, as well as a narrower fall on export, but on the whole, the textile industry still faces serious external situation, where market demand is sluggish; comprehensive cost continues to rise; international competition is increasing, causing industrial development more difficult. The main operating characteristics are as follows:
  Overall stable production status
  The production growth of textile industry is relatively stable in 2016. According to the National Bureau of statistics, from January to May, industrial added value of above-scale textile industry grew by 6.7%, unchanged from the same period in 2015, but 0.8 percentage point higher than the above-scale industrial enterprises in the country at the same period.
  In the main major products, yarn production of above-scale enterprises increased by 7.6% year on year, up 5.4 percentage points, which benefited from the shrink of cotton price at home and abroad. Fabric production increased by 3.7% year on year from January to May, flat over the same period. Chemical fiber production and apparel production increased by 7.2% and 0.7% year on year, respectively, with the growth dropping by 3.8 and 0.4 percentage points over the same period.


  Decline of export gradually narrowed
  The total exports of textile and apparel continued to be in negative growth in 2016, during which according to Customs data, cumulative exports added up to 130.78 billion dollar in the first five months, down 2%; but the export decline dwindled further from March, with the growth of the first five months up 0.8 and 3.2 percentage points compared to the first four months and three months respectively.
  Decline in export prices is the main reason for the continued negative growth in the textile industry. Affected by RMB devaluation and low raw material price, the export price of textile and apparel decreased by 4.6% year-on-year from Jan. to May. However, the export volume has returned to positive growth, with the growth of 2.7% from Jan. to May. In main export products, affected by the shrink of cotton price at home and abroad, cotton-made fabric achieved its exports up 1.2% with improved competitiveness, of which cotton fabric up 9.6%, cotton apparel up 0.5%, but other textiles made of raw materials in negative growth.   The growth of domestic sales continued to slow down
  China’s domestic consumption of clothing was basically stable in 2016, but the growth of domestic sales continued to slow down, by the impact of macroeconomic slowdown and rising food prices and other factors. According to the National Bureau of statistics, from January to May, the retail sales of clothing, shoes, and knit-textiles above designated size rose by 7%, 4 percentage points lower than the same period last year, as well as 3.2 percentage points fewer than the growth of total retail sales of consumer goods. With ecommerce as new form of sales pipeline in the textile industry, sales volume kept double-digit growth, but the growth slowed significantly, especially for clothing, whose online retail sales increased by 16.2% from January to May, but dropped sharply by 13.9 percentage points over the same period.
  Benefits tended towards steady slowdown
  Economic benefits of textile industry maintained steady increase, but growth rate has slowed down. Main business income of textile industry above designated size reached 2.12 trillion yuan, up 4.4%, with the growth slowing down 0.9 percentage point from a year earlier, and 0.7 point lower than the first three months of this year. Those enterprises achieved total profits to 105.92 billion yuan, up 6%, with the growth decreasing by 3.7 percentage points, and 0.5 point less than the first three months of this year. The profit margin was 5%, increasing by 0.1 point compared to the same period last year.
  The profits growth in the end-use sectors was relatively stable, with apparel, home textiles, and industrial textiles increasing by 7.1%. 13.3% and 11.4% respectively at the profit margin of 5.6%, 5.7% and 6%, all higher than the industry average, which indicated that textile industry and terminal market were in a good production/sales shape.
  Investor confidence went down
  The investment growth in the fixed assets in textile industry has slowed down from January to May 2016, during which, the paid-in investment in projects above 5 million yuan in the whole industry added up to 424.36 billion yuan, up 7.5%, with the growth rate decreasing by 8.7 percentage points. Accounting for 95% of total investment, private investment increased only by 6.8 %, showing a more obvious slowdown,with growth rate 10.2 percentage points lower than the same period last year.
  In sub-sectors, affected by the decline in profits, investment in chemical fiber industry shrank from January to May by 2.4%. In regions, the progress in industrial transfer to central region slowed down, with the investment from January to May only increasing by 2.7%, 18.5 percentage points lower than the same period last year; the investment demand on transformation and upgrading of eastern enterprises was slow, with investment increasing by 8.4%, 9.3 points less than the same period last year; the development of western textile industry has sped up, with the investment of the first five months rising by 38.5%, of which, the investment in Xinjiang grew 1.9 times, and in other provinces by 16.6%.
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