How to Stop Trump’s Trade War Madness

By the New York Times
August 11, 2019

The trade war between the United States and China spiraled out of control last week, with threats from the United States of yet more tariffs — this time on shoes, clothes and cellphones — and a hasty determination to name China a currency manipulator at least five years after it stopped doing so. 

China responded by halting purchases of American farm products and accusing the United States of deliberately destroying the international order. The stock market plummeted, as fear grew that there was no limit on Trump’s willingness to recklessly endanger the American economy. But there is a limit — Congress. And unless Congress steps up, Mr. Trump will continue to flout the rules.

Read full article

China's textile export declines in July as demand shrinks

www.chinaview.cn 2009-08-12 15:28:24

BEIJING, Aug. 12 (Xinhua) -- China's textile and garment export dropped 12.35 percent to 16.38 billion U.S. dollars in July from the same period last year, according to the latest statistics on the official website of the General Administration of Customs.

The figure in July, however, was 21 percent up from 13.48 billion U.S. dollars in June.

The textile and garment export declined 11.15 percent to 89.17 billion U.S. dollars in the first seven months from the same period last year due to sluggish demand in China's major export destinations -- the United States, the European Union and Japan.

The decline in textile and garment export in July showed the enterprises were still struggling at the profits bottom, said Ma Xinzheng, vice editor-in-chief of Wetextiles.com, a leading textile website in China.

Growing domestic orders would support the recovery of China's textile sector despite slack overseas market demand, said Ma, adding that the prospect of China's textile sector was upbeat.

Direction Plan for Textile Industry in China (2009-2011)

Original source:Alibaba.com
Published: 23 Jul 2009 21:15:26 PST

On April 24th, the State Council of China released a detailed support plan to adjust and strengthen the textile and garment industry in the years of 2009 and 2011:

Current Status and Challenges

China's textile industry witnessed a high-speed growth and established a complete industrial supply chain, ranging from upstream fiber material processing to the manufacture of garment, home textiles and industrial textiles.

In 2007, China's textile industry accomplished an industrial added value of RMB 812.6 billion Yuan, accounting for 6.9% of the total industrial added value and 3.3% of China's GDP.

The textile industry exported 30% of the total products into the overseas market, earning an export revenue of USD 175.6 billion in 2007, which is 2.3 folds of that in year 2000. The averaged annual growth reached 18.7%. China shared about 30% of the total textile and garment trade volume in the international market.

Product application areas have diversified to numerous sectors, including the fields of aviation, aerospace, water infrastructure, agriculture, transportation and medical care.

The industry absorbed more than 20 million employees, and 80% of them were rural population. The use of raw materials, e.g. cotton, hemp, silk and natural fiber, also benefits more than 100 million local peasants.

Nonetheless, the industry faces several challenges, such as the underdevelopment of proprietary innovation; high concentration (80%) of textile industry capacity in the coastal regions; high concentration (50%) of export market focusing on the EU, the US and Japan; and high consumption of energy and water. Overcapacity remains an issue in the industry. In the second half of 2008, the global financial crisis brought severe impacts on the textile industry in China.

Directions and Principle

In order to help the Chinese textile industry grow stronger, the Chinese government outlined the following directions: to stabilize the share of China in the international textile market, to expand domestic consumption, to focus on proprietary innovation and technical upgrade, to phase out obsolete facilities, and optimize geographical distribution of the industry.

During 2009-2011, the planned targets mainly focus on five aspects:

A steady increase in industrial production

By 2011, the above-designated sized enterprises are expected to accomplish an industrial added value of RMB1200 billion Yuan, to maintain a 10% annual growth rate; the total export revenue is estimated to reach US$240 billion, with an annual growth of 8%.

Substantial optimization in industrial structure

The overgrowth of fiber processing has been under control. The fiber consumption in terms of three major end products (garment, home textiles and industrial textiles respectively) is adjusted to 49:32:19. The industrial output of the textile industry in west region should be increased to around 20% of the country's total. About 100 well-known enterprises with proprietary brands will be supported to spur the domestic brand export to 20% (of the total exports around China).

Science and technology support more to the textile industry


The industrialization and application of high-tech product have achieved great progress, and the plan targets an increase of the application of internationally advanced technology as well as machinery to 50%; moreover, there is an improvement in the industry's industrial productivity by 10%.

Energy savings and discharge reduction should be considerably improved

During 2009-2011, a reduction of energy consumption per unit of industrial added value by 5% annually, a decrease of water consumption by 7% each year, and a drop of wastewater discharge by 7% per year.

A substantial progress in phasing out obsolete facilities should be done

By 2011, a total capacity of 7,500 million meters of fabric made with high energy/water consuming machinery, outdated printing/printing capacity should be taken out of the market. A production capacity of 2,300,000 tons of chemical fiber should be terminated, as well as low-efficient cotton and wool spinning facilities.

Major Tasks

To stabilize shares in domestic and overseas markets


To stabilize and explore exporting markets
Within the WTO compliance, the government targets an implementation of flexible export taxation policy, active response to deal with trade friction, so as to stabilize China's market share in the international textile market.

New markets should be explored for market diversification.

Capable textile enterprises are encouraged to export and invest overseas including of logistics facilities and distribution centers in key foreign markets. Branding and product innovation efforts are also emphasized.


To promote domestic textile and garment consumption
Enterprises are guided to develop new products that satisfy the needs of different consumer groups in domestic market.

Marketing distribution will also be simplified and improved. Rural market is stressed.

To explore more applications of domestic industrial textiles market
The plan targets to leverage the central government’s policy of expanding infrastructure to support the domestic development of industrial textiles, in the sectors of water infrastructure, transportation, construction, new energy use, agriculture, environment protection and medical care and so on.

To encourage proprietary innovation

To develop the mass production and diversified applications of advanced fibers
The development of advanced fibers and composite materials such as high-performance carbon fibers, aramid fibers, polyphenylene sulfide, advanced polyethylene, basalt fibers, polyamide and new polyester are encouraged.

Other product innovation can center around new fibers generated by farm crop waste and bamboo; textiles made of degradable and renewable fibers; and biological cellulose fibers.


To speed up development and application for industrial textiles
Industrial textiles should be further developed through propriety innovation.

For instance, the plan targets an increase use of domestically made industrial textiles in high-end geo-textiles from the current 20% to 50%, as well as an increase use of domestic industrial textiles made of needle punching, spun-lacing and spun-bonding new technologies from the current 20% to 50%.

Other advanced composite materials for aircraft and other application areas should reach an annual production of 50 million square meters. More progress in medical textiles, such as the surgical gown, insulating clothes and artificial organs, is also encouraged.

To promote proprietary development of textile machinery and equipment
The plan targets an increase of domestic machinery from the current 60% to 70% in market share. To do so, efforts should be made 1) in improving the key parts/components of traditional textile machinery; 2) in developing machinery for the manufacture of industrial textiles; 3) in speeding up the development of high-efficiency, simple and continuous production, and these machines should feature energy-saving and minimal discharge characteristics; 4) in improving the reliability of China-made key fundamental parts and components of textile machinery.

To further establish various systems of standardization
Till 2011, the textile industry will make effort to formulate industrial and technical standards for carbon fibers, high-performance fibers, eco-friendly textiles, functional textiles and relevant equipment.

Standards in the application of specialty textiles for, such sectors as aviation, aerospace, water control, agriculture, transportation, construction, new energy, environmental protection and medical care, should be formulated and/or updated. Updates in the standards of product testing for export and inspection systems are also needed.

To speed up technical upgrade

In the sectors of spinning and weaving, further development should focus on developing fine raw materials, advanced monitoring instruments and the manufacture of high-end combed yarns, fine blended yarns, differentiated yarns, and functional chemical fibers. The plan also targets more efforts to be made in the development of high-count worsted wool fabrics, semi-worsted fabrics, real silk and high-added-value jute products, etc.

In the sectors of printing and dyeing, attention should be given to process optimization via the use of electronic information technology and automation etc. This will help ease the severe environmental pollution caused by industrial players that consumes a large amount of energy and water. The plan targets to reduce energy consumption per unit of industrial added value by 10% in this sector and to achieve a used-water recycling rate of 35%. The production of high-end fabrics and functional textiles should increase to 30% from currently 20%.

In the sector of chemical fibers, advanced technology, improved product functionality, higher product varieties are key words. Differentiated chemical fibers should share half of the domestic production from 36% at present.

To eliminate obsolete production capacity
Outdated machinery includes old-fashioned spun yarn machinery and wool spinning machinery for the cotton spinning industry; early versions of flat-screen printing machinery, hot-melt dyeing machinery and hot-air clip stenter for the printing and dyeing industry; as well as outdated acidic viscose spinning machinery and wet-process spandex production in the chemical fiber industry.

To optimize regional distribution
The textile industry in the Chinese coasts should develop themselves focusing on advanced technology, capitalization, R&D capacity, brand building and marketing channels. Meanwhile, the central and west regions of China will make use of their resources advantages.
To improve public services systemStandards, regulations, and relevant efforts, just like the publicly assessable system and platforms should be established for small and medium enterprises to provide services in information, product design and development and social responsibility.

In addition, information systems to manage enterprises’ resources and transactions, e.g. ERP system and e-commerce system, should be encouraged.

To speed up proprietary brand building
The plan targets a growth of Chinese proprietary brands with international prestige by 10%. To do so, about 100 capable enterprises with their own brands and intellectual properties are encouraged to promote technical progress, improve product quality and design.
Eco-textile certification system will be drafted and implemented.

To improve corporate management
Internal corporate management should also be improved to ensure a good practice in corporate governance, quality management and production safety.

Policies and Measures
Textile and garment export tax rebate rate may be further increased.
More cotton and raw silk may be purchased to benefit cotton and cocoon peasants.
Investment in technical upgrade and technical reform is encouraged.

Domestic consumption would be enlarged. Guidelines on speeding up domestic brand building will be drafted.

Merger and acquisition is promoted among the industrial enterprises.
More financial support would be strengthened for domestic textile enterprises.
Social burdens of enterprises may be eased, such as delayed payment of social insurance premium, reduced premium of social insurance, etc.

Support to small and medium textile enterprises may be intensified through the establishment of public services platform.

More guidance may be provided to intensify industry optimization, e.g. in dyeing and printing sectors.

Industrial associations (or chambers of commerce) are suggested to play their roles actively to encourage players to develop themselves in a disciplined manner.

Voice from the professionals:
Mr. Du Yuzhou (president of the China National Textile&Apparel Council): There is one focus in the Plan: innovation. Since last year, domestic Chinese textile suffered several difficulties; however, according to the industrial statistics for the first two months of 2009, 30% of the total textile enterprises in China still realized a sales increase of 23%, with the profit rising by 33%. Furthermore, the profit achieving by those 30% enterprises accounted for 98% of the total profit among the whole textile industry. The key for their success is innovation.

Recently, we would make effort to promote the concept of innovation to the whole textile industry, and help and support the small and medium sized enterprises, which take a proportion of 99.4% of the whole industry, strengthen the public service, and the development and research of advanced technology.

Moreover, in order to achieve the target of “an increase of the application of internationally advanced technology as well as machinery to 50%”, we would speed up technology upgrading, and eliminating obsolete production capacity. In fact, we have already started this task. Recently, large amount of shuttle loom have been phased out, and the application proportion of shuttleless loom has been enlarged significantly.

Besides, our industry still will pay more attention to the product research and development, as well as the promotion of product differentiation.

He Yanli (Vice Director of Department of Industry, National Development and Reform Commission): In order to stabilize the export market share, in the Plan, we listed “Textile and garment export tax rebate rate may be further increased” into the Policy and Measure Item.
During the August and November in 2008, the textile and garment export tax rebate rate had been increased for two times. According to the direction plan, this year, the rate has already been adjusted twice, increasing from 11% in last August to 16% this year.

The increase of export tax rebate represents the support to the exported domestic enterprises, and it is of great importance to maintain the stable export market for domestic enterprises.
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China raises garment, textile export tax rebate rate

China raises garment, textile export tax rebate rate

(Xinhua)
Updated: 2009-02-05 07:20

China will increase the tax rebate rate for textile and garment exports from 14 percent to 15 percent, an executive meeting of the State Council announced Wednesday.

The move would reduce exporters' costs and support the textile industry, the Council said. The effective date of the new rate wasn't specified.

In a national plan to invigorate China's textile industry adopted by the State Council Wednesday, the government would allocate funds for companies that produce textiles or fibers, or operate in the textile printing and dyeing sector, to upgrade technology and develop domestic brands.

Government departments were told to provide financial support and insurance services to small and medium-sized textile plants.

The government would also announce steps intended to phase out obsolete capacity, eliminate energy-intensive, polluting equipment and technology, and encourage textile and garment makers to relocate from southeastern parts of China to central and western areas.

According to the plan, the government will take a proactive attitude to enlarge domestic consumption, innovate new production, expand rural markets and promote the use of textile products in relevant industries, while expanding export destinations to stabilize the share in the international market.

The textile sector is the country's traditional pillar industry and enjoys an advantage in international competition.

However, the textile industry suffered severe difficulties since last year.

Figures from the country's customs showed textile and garment export of China was 185.17 billion US dollars in 2008, up 8.2 percent year-on- year, but the growth rate was 10.7 percentage points lower than in 2007.

Experts from the Commerce Ministry (MOC) attributed the downturn to appreciation the yuan, industry liquidity shortage and production material costs surge.

China has raised the export tax rebate rate for textiles three times since last August. The previous increase in November took the rate from 13 percent to 14 percent.

The work meeting also discussed measures to support the machinery manufacturing industry as the government highlighted the importance of innovation.

Enterprises are encouraged to raise competitiveness through strengthening technological innovation. Mergers and acquisition between backbone enterprises were also encouraged.

China hopes to research and develop strategic projects in machinery for high speed railways, natural gas transfer, mining, steel and iron production, the automobile and textile industries.

This plan was seen as the country's latest move toward bolstering its economy. In early November, China announced a 4 trillion yuan (586 billion US dollars) stimulus package to boost domestic demand in both infrastructure investment and consumption.

China's economic growth slowed to 6.8 percent in the fourth quarter of 2008, dragging down the annual rate to a seven-year low of 9 percent, as the global financial crisis takes a toll on the national economy.

02/04/2009 09:38 AM

Garment Industry Protests Lead Testing Rules

By: NY1 News

Hundreds of garment workers and childrenswear manufacturers held a rally yesterday against new federal standards they say will cripple the industry.

A new federal law set to take effect next Tuesday mandates that all children's items from clothes to toys to shoes be tested for lead and other dangerous chemicals. Any products that are untested would be banned.

But those rallying yesterday outside Macys in Herald Square say they object to regulations retroactively affecting millions of products already on store shelves.

They say it would cost thousands of jobs and drive companies out of business.

"The industry is already struggling as it is," said worker Cecilia McInerney. "The company I work for laid off a bunch of people already and I have a feeling if this goes though the way they plan on doing it, it's going to completely kill it altogether."

"It's virtually impossible and extremely costly to go back and test thousands and thousands of products that were produced in some cases years ago, only to prove that they are safe," said Steve Levy of the group Safe and Affordable Childrenswear.

The Consumer Products Safety Improvement Act was prompted by the recall of millions of tainted toys made in China.

Cambodian garment industry needs to survive crisis

Cambodian garment industry needs to survive crisis

Source: China View, www.chinaview.cn

Special Report: Global Financial Crisis

PHNOM PENH, Jan. 9 (Xinhua) -- Garment, the foremost pillar industry of Cambodia, has an urgency to survive its crisis in the upcoming days, amid the ongoing global financial crisis and the recession of traditional demand from the U.S. market.

LESS EXPORT IN 2008

At an annual meeting of the Association of Southeast Asian Nations' Federation of Textiles and Apparel (AFTEX) which was held here on Thursday, Cambodian Commerce Minister Cham Prasidh said that the garment industry saw a 2 percent decrease in its export in 2008 over 2007.

"This is better than my own expectation. I thought that it would have been down 5 to 7 percent," said Van Sou Ieng, chairman of the Garment Manufacturers Association in Cambodia (GMAC).

Previous local reports have attributed it to the withering demand of traditional client countries.

Around 70 percent of Cambodia's garment products were sold to the United States, 4 percent to Canada and the rest mainly to European countries.

The export volume of the garment industry used to account for over 70 percent of the country's total annual export volume.

In 2007, garment export earned 2.93 billion U.S. dollars for Cambodia, according to official figures.

CRISIS AHEAD

The garment industry of the kingdom will face a 6- to 9-month-long crisis in 2009, due to lack of profitable orders, Van Sou Ieng said at the AFTEX meeting.

"I think that we will have a crisis 6 to 9 months long this year," he said.

Due to the global financial crisis, especially the U.S. economic recession, most garment factories could not secure new worthy orders and the current orders could only sustain them until March, he said.

"The crisis has propelled some buyers to give prices too low to be acceptable for the producers, so they have no choice but shut down their factories," he said.

Over 20 or even more out of the 400-strong garment factories of the kingdom have closed, leading to the unemployment of some 25,000 workers, he added.

Meanwhile, suspension of bank credit also spilled oil over the troubled water of the manufacturers, he said.

ALTERNATIVE MARKET

Japan might become the alternative market for the garment producers of Cambodia, as the demand of traditional purchasers has sharply sagged, said the chairman, adding "currently, Japanese orders are few, because their quality demand is so high that we can hardly meet it."

Fortunately, Japanese buyers have already listed some suggestions which could help Cambodia improve product quality, he said.

"Two directors, rather than one, supervise the operation of every 10 workers. This is the open sesame that they give us," he said.

The United States, as the largest buyer of Cambodian garment products, may need 2 to 3 years to cope with its economic recession, so it has become ever more urgent for Cambodian garment producers to find new markets, he added.

The garment factories of Cambodia used to employ some 300,000 people and have been the largest foreign currency contributor for the kingdom.

Garment, as a labor-intensive industry, is well-rooted in Asian countries, which still encompasses China, Vietnam and Indonesia.

China, India, Bangladesh, Vietnam and even Cambodia who are rapidly capturing the value added textile market

Nigeria unable to compete in African textile market despite AGOA
Business Day
Wednesday, 07 January 2009 00:01 AUSTIN IMHONLELE

The global textile and garment market is valued at around US $400 billion, which is an impressive figure that attracts entrepreneurs from around the world to venture into the sphere. Unfortunately for the African sub-continent and for Nigeria in particular, the trade has not been very profitable.

The situation in the Nigerian Textile Industry is alarming. Unless urgent steps are taken by the government, a total collapse is imminent.

Stakeholders in the sector had consistently lamented the unabated influx of counterfeit textiles from China, which they observed as the most serious problem afflicting the industry. There has been a sharp increase in the volume of textiles being smuggled in through the Nigerian land borders, particularly via Niger Republic.

The markets in Kano, Ibadan, Onitsha and Lagos are flooded with smuggled textiles which occupy over 80 percent market share.

Inconsistency in government policies has also been identified as one basic issue that needs to be resolved to revive the textile sector of the economy.

The problem of inconsistency in government policies is one basic issue that needs to be resolved, especially policies concerning the textile industry.

At a recent forum on the textile industry, experts pointed out that the market share of Africa in the global trade in textile and textile-related businesses, as estimated in June 2008, stands at a mere $200 million, which is indeed a very small fraction of the world trade.

Olarewaju, lamented the systematic and deliberate destruction of the Nigerian textile by unscrupulous Chinese textile exporters and called on the Federal government to engage the Chinese government over the issue.

Olarewaju alleged that counterfeited textile fabrics originate in China and specifically copy the trade marks of Nigerian textile manufacturers, ‘Made-in-Nigeria’ or ‘Made-as-Nigeria’ on the selvedge and even blatantly take SON/NIS markings to deliberately mislead consumers.
“While a large number of African countries are taking advantage of the opportunity thrown open by African Growth and Opportunity Act (AGOA) and other preferential trade concessions by EU, the Nigerian industry is still grappling to find a space in the international market.”

Nigeria has practically taken no initiatives towards taking this opportunity for expanding its textile industry. Even the availability of massive resources and cheap manpower could not help the country secure a place on the export charts.

If the situation continues in the present way and if measures are not taken to improve the market conditions, experts believe that by 2009, the entire chain of textile factories in the country would meet a disastrous fate.

On the global front, analyst say textile production is expected to grow to 25 percent by 2020 in which the Asian region is likely to be a major contributor. Abolition of quota regime since the start of 2005 has made the continent a hub for textile trade.

This is also because of most of the Asian countries instead of resorting to imports for their raw material supplies, opted for investing heavily in backward integration projects just like their counterparts in developed countries. This gradually strengthened the textile base in countries like China, India and Bangladesh.

As a result, most of the textile trade is concentrated in Asia and is being monopolised by countries like China, India, Bangladesh, Vietnam and even Cambodia who are rapidly capturing the value added textile market deserted by the developed nations due to high cost of production.
Issa Aremu, general secretary, National Union of Textile, Garment and Tailoring Workers of Nigeria (NUTGTWN) has urged the Federal Government to engage the Chinese authorities by drawing their attention to the serious damage caused by the trade malpractices of their textile exporters to the Nigerian economy. Federal enforcement agencies such as Customs and Standard Organisation of Nigeria (SON) should be tasked to take effective measures against faking and counterfeiting of Nigerian manufacturers’ trade marks.

Given details of the modus operandi of the dubious Chinese textile exporters, Aremu said: “Chinese companies violate intellectual property rights (IPR) of Nigerian textile manufacturers by specifically targeting popular Nigerian textile companies and counterfeiting their trade marks on the material produced in China and destined for the Nigerian market. Several Nigerian and international laws are broken to gain illegal market entry to the detriment of the Nigerian textile industry in particular and the economy in general. The faking of trade marks is done to mislead Nigerian consumers into buying counterfeits of genuine materials at cheap price by evading duties and taxes due to the government.

The textile industry had seriously been threatened in the past years by inadequate funding, invasion of local markets with foreign textiles and cotton products, high cost of production occasioned by epileptic power supply and high cost of Low Pour Fuel Oil (LPFO) that textile factories use for steam generation.

Within the last two years, more than half of the remaining 50 mills had further been shut down and the largest textile group in the country, the United Textile (UNT) was not immune from this closure.

The sector in the past was the largest employer of labour after government as it employed over one million Nigerians and secured a captive market of 250,000 tons of raw cotton for growers and generates over N1 billion revenue to the Federal Government of Nigeria. It was also a major consumer of a high percentage of local raw materials such as cotton and polyester.

The problem of inconsistency in government policies is one basic issue that needs to be resolved, especially policies concerning the textile industry. The problem of the industry has gone beyond money.

Stakeholders had in the past suggested that government should consolidate its commendable policy of ban by setting up a task force consisting of stakeholders to assist customs in ensuring effective implementation.

Address urgently and on a sustainable basis the energy problem as Nigerian industries are now generator-driven.

It cannot be over-emphasised that Nigeria is on the verge of de-industrialisation.
Mass factory closures mean complete wastage of irreplaceable manufacturing investment estimated at $3-billion.

'Garment industry continues to lose Rs 120 bn/month' - Mr Mehta, CMAI

'Garment industry continues to lose Rs 120 bn/month' - Mr Mehta, CMAI

Fibre2Fashion
January 05, 2009 (India)

The Indian Garment Industry continues to face the grim reality of continued loss of over Rs. 12,000 crores per month due to compelled cut in production caused by the unending woes of slowdown of the Local and Global Markets, uncompetitive production costs, rising input costs, poor high cost power and unrelenting neglect by the Government even in the “Second Economic Stimulus Package”, said Mr. Rahul Mehta, President, The Clothing Manufacturers Association of India (CMAI).

The average cut in production by the Industry is as high as 15% since September, 2008, forcing high rate of closures and cut in production and employment. It is now feared that the situation will remain the same for the first half of 2009 as no further relief measures are expected from the Government for this fiscal year (ending 2009 March)

The Second Economic Stimulus Package had specifically promised to address the woes of the Textile and Clothing Industry acknowledged by the Government to be worst hit. But, as far as the Garment Industry is concerned, there is complete marginalization in the Package announced, Mr. Mehta lamented.

The Rs. 1,50,000 Crore (35 Billion Dollar) Indian Apparel Industry had high hopes of stimulation of exports by increase in Drawback and DEPB Rates and increase or removal of value caps and restoration of 4% Interest Subvention to pre-September 2008 levels were vital requirements to stimulate Exports which continue to decline for the fifth consecutive month till December 2008, Mr. Mehta pointed out.

One has also to note the serious decline in the target set of 11.62 Billion Dollars for 2008-09 by 24% to 8.78 Billion Dollars in a Global Market of 530 Billion Dollars where India aspires to become a 'Major Player', Mr. Mehta said.What is most regrettable, Mr. Mehta added, is that the Apparel Sector is being neglected in spite of the enormous Employment potential, especially for semi skilled and unskilled Workmen, and Women, and conversely, the potential for Employment loss if the Industry gets deeper in to the crisis mode.

It is alarming that demand shrinkage in US and EU Markets, pressure to cut prices by intense competitive vial Nations armed with higher Export Rebates and incentives like China, Vietnam, Cambodia and Bangladesh would continue to edge out Indian Exporters. Mr. Mehta lamented. In contrast, China has increased its Export Incentives 3 times in the last 6 Months, raising them from 11% to 17%; Pakistan too has announced a R&D Rebate of 6% besides a 2.5% cut in Interest Rates.

The Government must move towards being more “industry friendly” by taking a pragmatic review to ensure survival and growth of the industry expected to become a “major global player”, he added.

Clothing Manufacturers Association of India

Infuence of Humen Garment

Humen town of Dongguan, on the east coast of Pearl River Estuary, is located in the southeast of Guangdong province. Humen covers an area of 178.5 square kilometers and has a local resident population of 120,000 and a foating population of 500,000. There are more than 1,250 large-scale garment enterprises in Humen town, among which 300 foreign-capital enterprises, 800 private enterprises, and about 100 support factories specializing in weaving, heat setting, zipper and dyeing, with productive capacity of 250 million suits per year. It was awarded the Most Infuential Capital of Textile Industry by Economic Daily Media. In the one square kilometer's garment market, there are 22 large-scale garment wholesale marts, such as Fumin Commercial Building which enjoys the reputation of No. 1 fashion wholesaler in China, Huanghe Fashion City of Humen town, Lungchuen Business Plaza, Lane Crawford, New Times, Baolaohui, Xinlangchao, JinBaili, Daying Eastern International Garment Mall, which accommodate more than 10,000 garment shops in total. The domestic and international sales amount to about RMB 13.5 billion yuan per year.

In addition, there are 11 garment support malls, such as Fumin Drapery Mart, Huacheng Drapery Mart, Humen International Cloth Center, Bomei Cloth Trade Center, Fumin Leather & Leatherware Mart and Taixing Accessories Mall, which covers an area of one square kilometer with more than 8,000 shops and sales volume RMB six bi l l ion yuan per year. Humen Association of Apparel & Ornaments Industries, the first town apparel & ornaments association in China, was established in March 1996. In accordance with the guideline of management, service, guidance and improvement, the Association serves for the garment enterprises in Humen with heart and soul, and builds a bridge between enterpr ises and government .

It has successfully held Humen International Fashion Fair for 12 times from 1996 with turnover of more than RMB one billion yuan every year. Thanks to so many years' meticulous cultivation, Humen garment has become the first famous garment manufacturing base and wholesale market in China and a pillar industry of Humen which boasts large scale, high qual i ty indust ry cluster. Human was awarded Professional Town and Technology Innovation Pilot Town of Guangdong province by Science and Technology Offce of Guangdong Province in 2002, China Famous Town of Women Wears by China Textile Industry Association in early 2003, and was listed in Torch plan- Humen Garment Design and Characteristic Manufacturing Industry Base by National Science and Technology Ministry in 2007.

Humen has successfully held China (Humen) International Fashion Fair for 12 times in a row which greatly promoted garment industry.

As the saying goes, one industry's prosperity will bring prosperity to many other industries. The development of garment indust ry act ivated 10 industries in Humen, such as business, tourism, transportation, electronics and communication, real estate, hotel, catering, etc. The regional economy featured by taking the garment industry as its pillar industry, has generated good industry cluster effect.

Its prosperous exhibition industry has also facilitated the fast development of logistics and hotel industry.

There are more than 50 professional companies specializing in logistics, warehousing, distribution and transportation in Humen, and still more than 6,000 runs of bus and minibus going to or back to Humen everyday. Humen's hotel industry booms with so many businessmen and tourists. Humen has 107 hotels, among which three are five-star hotels. In 2007, the GDP of Humen reached 18.289 billion yuan, the gross value of industrial output 45.834 billion yuan, total taxes 3.176 billion yuan and per capita net income of farmers 13,915 yuan.

The strategy of building brand through the platform of exhibition starts to yield positive effect. Humen already possesses one national well-known trademark, three national brand products, 11 national inspection- free products, 13 famous trademarks of Guangdong province and 11 famous-brand products. It was also awarded the Grand Prix for Brand Promotion of Chinese Clothes, 2005-2006.

Source form China Textile Magazine

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Pain of China export slump moves along supply chain

Reuters
Sun Dec 28, 2008 10:38pm EST

By Fang Yan - Analysis

SHANGHAI (Reuters) - Nevermind the banks. Eastern China's Shaoxing county has launched a massive polyester bailout.

The locality of 710,000 in prosperous Zhejiang province arranged 1.5 billion yuan ($220 million) in aid to let Zhejiang Hualian Sunshine Petro-Chemical Co, a major producer of purified terephthalic acid (PTA), used to make polyester, restart output after financial difficulties had shut it down.

The virtually unprecedented offer of government money to a non-state firm highlights how far the global economic downturn has spread, from small exporters that bore most of the initial brunt to bigger companies in more basic industries.

"We had to bail out Hualian Sunshine even though it was privately held," a Shaoxing municipal government official, who declined to be named due to briefing rules, told Reuters.

"Hualian Sunshine is the biggest supplier to our textile industry, which gives us half of our fiscal revenue. The stakes were just too high for us to sit there and let it die."

Signs of problems with China's export-driven economy started in the coastal south, where hundreds of small-scale toy makers and garment firms were forced out of business as the global financial crisis battered their main markets in Europe and the United States.

Many had initially blamed currency appreciation. But anemic annual growth of 5.4 percent in China's industrial output in November, the worst reading in nearly 10 years, showed the problem has gone far beyond the yuan's rise, which anyway came to a virtual halt in mid-July.

TROUBLE UPSTREAM

A number of upstream suppliers in eastern China's industrial heartland, such as Sinopec Yizheng Chemical Fibre Co and Nanjing Chemical Fibre Co, slipped into losses in the third quarter as their order books dried up.

One hard-hit industry has been chemicals, including makers of polyester, a synthetic resin widely used in clothing and a variety of plastic goods.

"Due to the severe situation facing the downstream business and slowing demand, the domestic polyester industry is in an extremely difficult operating environment," Sinopec Yizheng said in its quarterly financial report.

That reflects a severe slowdown in exports of clothing and accessories, which grew just 3.1 percent year-on-year in the first 11 months of this year compared with a 22.2 percent rise in the same period of 2007, official data showed.

Industry analysts expect the situation to get worse next year along with the faltering global economy, forcing some smaller suppliers out of business.

"It's a domino effect. If the garment exporters continue to fall one after another, how can you expect their upstream suppliers to stay in the business?" said Gao Guo, an analyst with Huatai Securities.

"Industry-wide consolidation is inevitable next year as there is no sign of an end to the global financial crisis."

Hualian Sunshine's problems, in a fitting reflection of the global financial crisis, were due in part to losses in PTA futures trading, the Shaoxing government official said.

The firm made an overall net loss of 1.17 billion yuan on sales of 10.93 billion yuan in the first three quarters, according to China Union Holdings, which owns a 16.4 percent stake in the company after the bailout. Shaoxing county holds a 33.44 percent stake.

BAILING OUT

When the economy was booming early this year, losses of that scale were not necessarily life-threatening for PTA suppliers such as Hualian Sunshine, but with their downstream customers in trouble, any serious missteps can be fatal.

A China Union spokeswoman said Hualian Sunshine halted production in early October but was able to restart about a month later after the bailout, which included funds from the county and another local company.

"A lot of firms, especially privately run family businesses, have management problems and are sometimes involved in irregular dealings for quick profit. The weak economy has now exposed some of the skeletons, " said Qian Xiangjing, an analyst with CITIC-Kington Securities.

In recent months, Beijing has unveiled a series of measures, including export tax rebates for exporters of textiles and other goods, as well as a 4 trillion yuan fiscal stimulus package and repeated interest rate cuts.

The central government is determined to maintain at least 8 percent economic growth in 2009, a level it said it must achieve but which foreign economists have said could prove elusive.

The local authorities, for their part, are not willing or able to wait until nationwide policies have an impact.

After nursing Hualian Sunshine back to health, the Shaoxing government is now considering lending a hand to another troubled PTA maker, Zhongheng Group, whose businesses also include steelmaking and property.

One option is a roughly 150 million yuan government aid package for Zhongheng in exchange for some of its property assets, the Shaoxing government official told Reuters.

"We are still discussing ways to help out Zhongheng. I am afraid we might have to intervene when other big taxpayers here fall apart. What else can we do?" asked the official.

($1=6.84 yuan)

(Reporting by Fang Yan; Editing by Andrew Torchia)