Textile industry China

Textile is one of China's largest industries; it contributes US$ 420 billion to the national GDP. Exports of China's textile industry were valued at US$178 billion in 2007 and contributed US$150 billion to China's trade surplus. Impressive numbers but China's textile industry is actually facing a crisis that could dramatically change its 'texture", no pun intended. The industry is highly fragmented: 40,000 companies with annual sales above ~ USD 0.5 million and another hundred thousand smaller players which all are facing the same challenges: - Recent appreciation of the Chinese RMB of some 15% percent against USD and reduction of VAT rebates have directly affected already thin bottom line profitability. - Rising competition from lower cost countries (specifically Bangladesh, India, and Vietnam). - Risk hedging of 'large Wal-Mart buyers' splitting orders between countries instead of going "China only". More short term purchasing contracts. - A cotton shortage of 3.6 million

Textile industry China

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