The General Administration of Customs released the latest data show that January-September this year, Chinese textile and apparel export a total of 136,940,000,000 yuan, representing a year-on-year in 2007 increased by 8.12% and 8 months in a row to fall. In fact, if the combination of exchange rate changes since June this year, Chinese textile and apparel exports are in fact negative growth.

In addition to the General Administration of Customs figures, textile and garment categories listed companies from three more details of the Quarterly Bulletin has been to reflect the advent of winter.

The rapid decline in profitability

Recent domestic textile and garment industry in August statistics released one after another, from various sectors of economic data, the overall situation is more severe decline in profitability of the textile industry significantly.

Statistics show that in 2008 the first 8 months of above-scale textile enterprises main income and total profits year-on-year increase of 15.46 percent, respectively, and 3.20 percent, the industry growth rate of decline is very clear, and from the beginning of the year showed a continued downward trend. Before the August trade deficit as a proportion of 21.33 percent.

Orient Securities analyst Shi Hongmei textile industry analysis pointed out that the specific targets of a profit report from the spin-off, the first 8 months of the domestic textile industry-wide gross margin for 10.82 percent, up stable, but as a result of cost growth, industry profit margins decline . 8 months ago, industry and financial costs of operating expenses, respectively year-on-year increase of 17.03 percent and 22.40 percent, more than the main revenue growth. This pre-listed companies with textile stocks in 2008 plate Center Daily News disclosed the same basic information. In addition to the export pressure, a variety of raw materials, labor costs and the cost of capital is also the current domestic textile and garment enterprises are facing difficulties.

Belong to the textile and apparel retail industry, the degree of the economy also suffered a heavy blow from the statistics, this year’s domestic retail clothing still maintain a rapid growth. However, according to Kim States Securities analyst Zhang Bin and the enterprise market, on-site investigation, the situation is not as optimistic about the statistics.

Zhang Bin pointed out that the market situation, in June since the discount brand textile and garment enterprises over the situation in previous years. In macro-economic slowdown, inflation, narrow the wealth effect, the domestic textile and apparel retail growth rate appears more likely to decline. “Textile and Apparel consumption in the fourth quarter of significant change is unlikely, for the first half of 2009, market conditions should also be cautious point of view.” Stressed Zhang Bin.

Industry to enter the most difficult period

In the textile industry, has occupied a major export. This year, however, the textile industry export growth sustained, rapid decline in single-month export growth rate since the second half of 2007 has continued to decline. Statistics show that in 2008 the first 8 months of export growth for the industry 7.72 percent, compared to the year 2007 growth of 18.77 percent reduction in the level of 11.05 percent.

Shi Hongmei pointed out that since October 2007, the industry in a single month export growth continued to decline in August 2008 industry growth rate of exports was only 1.68 percent. The United States by a drop in demand and a weak global economy, especially in apparel exports decline, which also led to industry-wide export growth sharply down the main reason.

From the region, supporting the export of textile industry remains the main engine of growth comes from Europe, the first 8 months of export growth in Europe has been 18.79 percent, while the other two traditional exports – the United States and Hong Kong, China’s exports decline Obvious signs, the first 8 months of the same period last year decreased by 1.34% and 11.66%.

But Guotai Junan analyst Lee Sin quality of the view that the United States at loan-to-induced instability in the global economy on the industry’s impact on export demand is expected to continue for some time, the demand for textile products will be further reduced.

The beginning of August some of the textile and apparel export tax rebate rate of increase for the industry to a certain positive impact, but taking into account the revaluation of the yuan against the euro in the next export industry is still not optimistic. And by the end of 2008 on the part of the U.S. textile and apparel safeguard restrictions brought about by positive affect, Shi Hongmei should be cautious, she is expected to be canceled even if the safeguard restrictions and other forms of trade barriers still exist for a long time.

“At present, textile and garment industry has entered the most difficult times, not the current recovery to see the dawn.” Frankly Shi Hongmei. However, she should be moderately optimistic about the industry’s winners face of adversity, and long-term concern. Zhang Bin is more optimistic about the brand of textile and clothing enterprises leading provider of enterprise business model.