China´s Textile Industry to Face More Complicated Environment in 2012

China´s domestic market has been an important driving force that promotes the development of Chinese textile industry. Although both domestic and overseas markets grow fast in 2011, they give less support to the textile industry. Experts in textile circle predict that the Chinese textile industry will face more complicated environment in 2012 and it should cautiously response various challenges to keep a healthy development.

In 2011, the growing pace of major economic indicators of the textile industry slows down month by month. In 2012, the industry will continue to face a complicated macro environment and many risks on both domestic and overseas markets.

In 2011, domestic market has been growing slowly. Although domestic sales of garment and head & foot gear grow faster than total retail sales of consumer goods, it has been declining month by month since September. The growth in output value of domestic sales in the January-November period of 2011 also dropped evidently. Meanwhile, due to weak demand on the world market, the exports from China also grow in a slower pace.

Experts from China National Textile and Apparel Council predict that the uncertainty of the demand in international market may increase in 2012, which will bring evident effect on China´s exports of textiles and garment. As the first quarter of 2012 will be an important period for European debt-ridden countries to clear off their debt, the heavy debt service pressure might bring new impact on capital market and consequently reducing its support to real economy, the economy in Euro zone may present a declining trend. American debt crisis is another risk faced by the international market. Once the United States takes unexpected tightening financial policy, it will put a drag on American economic growth and become an uncertainty influencing global economic operation. At the same time, the growth of emerging economies also presents a slowdown trend, which may continue in 2012. Since the situation in international market may not improve within short term, the textile and garment exports may probably keep a slowdown pace.

Additionally, there are some bottlenecks on domestic market. Although the policy for expanding domestic demand will give major support to domestic market, there are negative factors on national economic growth. For example, the withdrawal of incentive policies and tight control over real estate will further slow down the growing pace of economy, while the increasing cost of resources, labor and finance will increase the operating costs of textile enterprises. Under such background, the Chinese textile industry will face equal pressure as in 2011.