China's cotton textile industry is facing difficult challenges, as sales have been poor amid the weak recovery of the international market, as well as domestic factors.
The Fujian Hongyuan Group, located in southeast China's Fujian Province, is the largest cotton textile enterprise in the province, with an annual output value of 1 billion yuan (163 million U.S. dollars).
Statistics released by the National Bureau of Statistics showed that the added value of the textile industry from January to June was greater than that of the same period last year. However, exports to Europe, Japan and other major overseas markets have plunged.
Statistics released by the National Bureau of Statistics showed that the added value of the textile industry from January to June was greater than that of the same period last year. However, exports to Europe, Japan and other major overseas markets have plunged.
"Although a rebound in textile product exports has been seen in the past six months, things do not look optimistic for the second half. It may be worse than the first half and could plunge even further in the future," said Chen Cangsong, vice president of Hongyuan.
The Chinese government started purchasing cotton for temporary state reserve in 2011 in order to protect cotton farmers' interests. As a result, domestic cotton prices became higher than those of the global market.
Domestic cotton prices stood at about 19,000 yuan per tonne this year, 3,500 to 4,000 yuan higher than the price of imported cotton.
However, imported cotton has been hit with high tariffs and enterprises who want imported cotton must abide by a strict quota system.
Since southeast Asian nations like Vietnam, Bangladesh, India and Cambodia can freely purchase cotton at a price of about 13,000 yuan per tonne and have lower labor costs, those countries are seeing an increasing number of orders from European markets that used to order from China.
Source Xinhua
