China Fabric Industry in 30 Years

Fabric Industry in 30 Years
I Fabric Output of China
Fabric Output of China in 1950-2007

Output Growth
In the 30 years of reform and opening up, as the market demand expanded significantly, China’s fabric output increased greatly from 11.03bln meters in 1978 to 66bln meters in 2007, up nearly 6 times.

Cotton Fabric Output of China in 1960-2007
Output Growth From 1978 to 1984, due to the implementation of “shunt and transition” in textile industry, textile production of China developed substantially in the three years of 1979-1981. By 1982, cotton fabric output reached 10.12bln meters, a historically highest level.

The rapid growth of textile production changed the market supply. In December 1983, Chinese government decided to abandon the coupons for cotton fabrics that had lasted for 29 years and provided open supply for people. After 1987, cotton fabric output has always been staying over 10bln meters, and in 2007 it reached a new record high of 27.114bln meters.

II Cotton Fabric Import & Export
Cotton fabrics include cotton greiges, yarn-dyed fabrics, dyed fabrics and printed fabrics. From 1998 to 2006, the export volume of cotton fabrics kept rising.

Being a member of the WTO for five years, China imported cotton fabrics 7.718bln meters and exported 25.741bln meters, 18bln meter surplus, which were valued at over $16.4bln. The export volume rose with an average annual growth of 12% and the import volume increase was below 1.5bln meters per year.
This implies that the competitiveness of China’s cotton fabrics enhances year by year.

It is noteworthy that the average export price of cotton fabrics is below $1.09/meter, while the import price averages at $1.43/meter, which indicates that imported cotton fabrics are of higher grade.

III Printed & Dyed Fabric Output

Dyeing and finishing industry is one of the key sectors to reflect the product quality and advance the added value. It plays an active role in the whole national economy. In 1952, when the Republic China was newly established, the output of printed and dyed fabrics was only 1.98bln meters; by 1978, in the early period of the reform and opening up, the output hiked to 6.5bln meters; by 1983, it rose to 7.329bln meters.
Printed & dyed fabric output of China totaled 15.9bln meters in 2000. Since the year of 2001, the output saw a double-digital annual growth from 17.83bln meters to 36.215bln meters in 2005. Since the year of 2003, the output growth has been pegged at over 15% as well as that of clothing. The rising demand also pushed up dyestuff consumption. Since 2001, dyestuff consumption increased with an annual growth of
15-20% so did the production. In 2005, China’s printed and dyed fabric output reached 36.22bln meters.
China printing and dyeing industry was under great pressure in 2007 due to the appreciation of RMB,rising of lending rates, reduction of export tax rebate, restriction on processing trade and environmental pressure. However, the output still witnessed stable growth with profits rising steadily.

IV Fabric Turnover of China Light & Textile Industrial City

The trading volume in 2006 was the highest while it slid down in the following two years affected by RMB appreciation, energy saving & pollution reduction and export tax rebate reduction. In 2008, many textile producers and trading companies saw squeezing margins given weak textile industry. Meanwhile,undesirable quality and higher prices of printing & dyeing mills led to fewer orders.

V Denim Production of China
In the late 1970s and early 1980s, some enterprises in Guangdong, Shanghai, Jiangsu, Liaoning, etc.,began to produce denim and jean clothing. After a series of great development, China’s denim production capacity grew from below 1bln meters per year to current 3bln meters per year, indicating China as one of the global major denim producers. A large number of denim and jean clothing enterprises have been
basically in line with international standards in terms of quality and variety.
According to some statistics, in 1997, there were 254 yarn-dyed denim enterprises in China with annual production capacity of 1.35bln meters. After 1997, impacted by the Asian financial crisis and spindle reduction in China’s cotton textile industry, yarn-dyed denim market began to decline and fell into a China Chemfiber&Textiles

trough in 1999. In 2001, the number of denim enterprises exceeded 350(excluding small-scale family-style weaving lines), and the production capacity reached 1.9bln meters. Owing to the WTO effect,in 2002, the sales of production of yarn-dyed denim prospered. But later in 2003-2004, subjected to plummeted domestic cotton prices, yarn-dyed denim industry experienced series of setbacks. In 2005,pushed by the abolition of the quota, new projects were put into operation in succession, and the output of denim grew rapidly.

In 2006, production growth slowed down. Influenced by the domestic and foreign policies, low-grade products and overcapacity, in 2007, the sales of denim turned severe. According to the above-scale enterprises in Jiangsu and Guangdong, their monthly output was just two thirds of previous years.

According to some statistics, the output of denim totaled at 2.8bln meters in 2007, down by 6% year on year. In 2008, as a number of small and medium-sized enterprises collapsed due to capital problems, based on the operation status of yarn-dyed denim enterprises in Shandong, Jiangsu, Guangdong, etc., it is predicted that China's denim output in 2008 may be lower than in 2007.

D I S C L A I M E R
The information, opinions and analysis contained herein are based on sources believed to be reliable.
The opinions contained herein reflect our current judgement of CCFGroup and are subject to change without notice. The report is for information purposes only and should not be used as the basis for any commercial decision. All materials contained in the report are protected by copyright.