Textiles - Textile Environment in the PRC

According to an article from Xinhua News on 27 December 2007, China’s textile industrial output for 2007 is forecast to reach RMB 3.05 trillion (US$416.8 billion), a 21.9% increase year-on-year according to a report released by the China Textile Industry Association(1).

The annual industrial output of the textile industry in the PRC has experienced steady growth from approximately RMB 1.28 trillion in 2003 to approximately RMB 2.50 trillion in 2006, as illustrated by the
following chart:– PRC urban household’s income and expenditure on cloth
Annual per capita disposal income of PRC urban households between 2000 and 2006 has grown
significantly (as illustrated in the following figure) and it can be expected to have contributed to lifestyle upgrades and demand for better quality apparels by consumers, in generalWith increasing Chinese citizens’ disposable income, China urban household’s expenditure on cloth has also been increasing from 2002 to 2006 as shown in the following chart:–

Exports of textile and apparel products of PRC
Coupled with the further liberalisation of textile trade after the expiration of Multi-Fiber Arrangement (“MFA”) that was phased out over the period of 10 years (January 1, 1995 -January 1, 2005), the PRC is set to benefit from the expected increased international demand for textile and apparels following the PRC’s entry into the WTO. The total export of textile out of the PRC reached US$56.0 billion, an increase of US$8.0 billion when compared to the same period in 2006 of US$48.0 billion; the total export of clothing products out of the PRC reached US$115.0 billion, an increase of US$19.9 billion when compared to the same period in 2006 of US$95.1 billion(5).
The following chart shows the increasing trend in export of PRC textile and clothing products over theperiod from 2000 to 2006:–

The PRC government initiatives to promote textile and apparel industry
To strengthen the overall competitiveness of the textile and apparel industry, the PRC government issueda new five-year plan namely “The Textile Industry Eleventh Five-Year Plan ”(7) in June 2006 as guidance for the continued growth and development of the textile and apparel industry. Textile and apparel manufacturers are encouraged to further consolidate their competitiveness through technology upgrade and organic as well as inorganic growth to take advantage of the opportunities associated with the opening up of the PRC market. In addition, competent domestic manufacturers are also encouraged to develop a stronger brand identity. Production of high technology, functional and environmentally friendly textile and apparel products is encouraged to increase the production value of the industry.