Country Profile

Country Profile

By James M. Borneman,Editor In Chief,Textile World

Exponential GrowthIn China’s Textile IndustryChina’s first year as a World Trade Organization
brought extraordinary growth and increased profits to the country’s textile industry.How fast is
China’s textile industry growing? One look at the recently released “Report On China Textile
Industry Development,” a collection of statistical studies on different sectors of the Chinese
textile industry published by the China National Textile Industry Council (CNTIC), the answer is
obvious. 2002’s results were groundbreaking and every indication says the trend will be maintained
for the foreseeable future.Compared with 2001, the amount of fiber processed throughout the
industry in 2002 increased to a total of 17.5 million tons valued at 1,850 billion yuan ($223.8
billion). The 2002 level was more than five times the amount of fiber processed in 1980 and almost
three times that of the amount processed in 1990. The report reveals that sales generated by all
segments of the textile industry have reached “historic highs” with increases in both domestic and
export markets.A survey conducted by the Statistics Center of China National Textile Industry
Council of “enterprises of considerable size” shows textile sales increased by 15 percent to more
than 1,002 billion yuan ($121.3 billion). The survey also shows an improving profit picture — the
industry saw profits reaching 33.7 billion yuan ($4 billion) in 2002, representing a 25 percent
gain over 2001 levels. The 2002 profit rate of 3 percent illustrates ever-improving profits that
CNTIC says are enhanced by reductions in business fees.Management cost rates have fallen from 6.1
percent in 1998 to 4.5 percent in 2002; finance cost rates also have decreased from 3.7 percent in
1998 to 1.6 percent in 2002.

CottonIn the cotton sector, the China Cotton Textile Association (CCTA), citing an economic
situation “considerably better than the previous year,” reports an increase in profit of more than
60 percent compared with the previous year. CCTA also points to the trend of market competition
“concentrating around coastal areas [and] raw material manufacturing areas, [and among] big
exporters and non state-ownedenterprises.”In 2002, CCTA says, China imported 176,600 tons of cotton
— a 196-percent increase from the previous year. The United States provided 90,500 tons and was the
largest supplier. On the other hand, China exported approximately 149,500 tons of cotton in 2002 —
a 180 percent increase from 2001 — with primary destinations in Southeast Asia. Xinjiang province
alone exported 139,600 tons, or 93 percent of the export total.In terms of cotton yarn and fabric
production, China’s average monthly yarn production reached 700,000 tons. Moreover, the report says
six provinces — Hebei, Jiangsu, Zhejiang, Shandong, Henan and Hubei — account for 5.8 million tons,
or 68 percent, of China’s annual yarn output.Of the 8.5 million tons of yarn produced, 95 percent
was sold domestically. Of the 32.2 billion meters of cloth produced, 88 percent was sold in the
domestic market.In terms of export, the report states that China, in 2002, exported 388,400 tons of
cotton yarn worth more than $1 billion, representing a 58-percent increase from 2001. The export of
cotton fabric increased by 35 percent to reach 4.2 billion meters worth $3.7 billion.

The annual report is published by the China National Textile Industry Council.Textile
MachineryThe textile machinery sector, which includes garment and leather equipment, also saw
growth. The China Textile Machinery and Accessories Association reports a gross output value of
29.6 billion yuan ($3.6 billion) at a growth rate of 31 percent. However, of the 592 enterprises in
the industry, 113 (19 percent) suffered losses in 2002. Of the 132 state-owned or state-held
enterprises, 52 (39 percent) reported losses.On the other hand, the value of imported machinery
reached $3.5 billion, a 40-percent increase from 2001. Exports of machinery increased by 28 percent
to reach a historic $357 million. Shuttleless weaving machines posted the fastest growth among all
machinery products — air-jet and water-jet looms exports doubled from 2001 levels and exceeded
20,000 units for the first time, according to the report.ApparelThe China National Garment
Association (CNGA) also reported substantial growth. A CNGA survey found a 9-percent increase in
2002 achieving a total output of 12.2 billion pieces classified as “shuttlewoven garments.”
Seventeen provinces had increases in this category with Hunan at the top with 45 percent, according
to National Bureau of Statistics (NBS) reports. The CNGA adds that the “garment and accessory
export value of the year amounted to $41.3 billion, accounting for 71 percent of the gross textile
export value, or 13 percent of the gross export value of the whole country.”Industrial
TextilesIndustrial textile products also participated in the Chinese textile industry’s
unprecedented growth. The China Nonwovens and Industrial Textiles Association says production
reached 530,000 tons 1988. Output rose to 1.7 million tons in 2000 and 1.9 million tons in 2001. By
2002, output reached 2.1 million tons and now includes categories ranging from 230,000 tons of
medical and hygienic textiles to 40,000 tons of defense cloth.

Editor’s Note: The “Report On China Textile Industry Development (2002/2003)” is a collection
of statistics on the Chinese textile industry. It also contains in-depth reports on 12 industry
sectors and member associations. For additional information, e-mail