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China Textiles and Clothing Report Q4 2009Published by: Business Monitor International Published: Sep. 1, 2009 - 48 Pages Table of Contents
AbstractDuring Q309, the available data releases continued to suggest that the worst of China’s economicslowdown had past, with some signs of stabilisation and potential recovery beginning to emerge in thetextiles and clothing (T&C) sector. Industrial sector profits across companies in 22 provinces monitoredby the National Bureau of Statistics (NBS) showed a year-on-year (y-o-y) fall of 21.2% in the first sixmonths of 2009, which was nevertheless a 3.4 percentage points (pp) improvement on the January-Mayperiod, when profits had been down by 24.6% y-o-y. The improvement was particularly marked in thechemical fibres sector, which reported a H109 profit fall of only 4.6% y-o-y, much improved on the30.7% fall in January-May.The next year will be a difficult time for China’s T&C industry. The global economic slowdown hastaken its toll on an industry that enjoyed more than 10 years of y-o-y export-led growth. The first shock ofthe downturn is now over and the questions being asked are whether H209 is experiencing the ‘floor’ ofthe industry downturn, and at what point a recovery will kick in. Companies are dealing with theunfamiliar task of managing falling order books and retrenching - on the positive side, many are realisingthe domestic market offers respite from their falling export orders. Dangers include a potential relapseinto protectionist positions across key global markets. Having said that, BMI stresses that, in our view,the Chinese industry faces one or two years of lower growth - not an absolute contraction - and may wellposition itself to benefit strongly from the expected recovery from 2010 onwards. We estimate that Chinese T&C manufacturing value added, which expanded by an estimated 18.7% in2007 and slowed to 10.1% in 2008, will have its worst year in 2009 with growth of 5.5%. Thereafter, itwill begin a recovery with predicted growth of 14.5% in 2010. In the five years to 2008, BMI estimatesthat average annual growth of manufacturing value added was 14.6%, ahead of GDP at 9.0%. In the nextfive years, we see the pace of growth falling to an average of 12.2%, compared to an annual GDPexpansion of 8.1%. BMI forecasts T&C export growth to fall 7.8% in 2009 to US$165.85bn, withimports contracting by 3.9% to US$21.81bn. Export growth, which averaged 18.1% in the five yearsthrough to 2008, should reduce to 9.1% in the five years to 2013. Although the International Labour Organization (ILO) does not currently provide detailed data series ofemployment in China’s T&C industry, official estimates are that, in 2006, employment stood atapproximately 20mn people. Get Full Details About This Report >> |
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