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Organization of the logistic chain in the Chinese international trade
IV.2. Textile Industry
China Textile Industry is currently one of the main industries in China's economy and has become a
major export sector, accounting for almost 10% of the country’s total trade of goods in 2004. Exports
and imports of Textile and Apparel Industry accounted for 16% and 3% respectively of the country’s
total export and import of goods.
Textile industry overview
When in the 1980’s China started its economic reform process all textile enterprises were owned by the
state. The speed of reforms and restructuring led to significant improvements in productivity and
profitability. Nowadays, more than twenty years later, the current environment will allow Chinese
companies to compete in other fields instead of taking price as the only advantage.
However, following trade liberalization, China Textile industry faces severe challenges from opening
market and fierce competition. After the entry into WTO, China will compete with other big textile
exporters to obtain larger market share and the liberalization in trading will lead to a stronger
competition among domestic textile enterprises.
Moreover, the final of the quota system arrived in 2005 although real free trade of textile has not yet
materialized and China has been involved in many conflicts in International textile trade especially with
the United States and the European Union. On the other hand, the removal of the quota system may
attract more foreign capital to be invested in China’s Textile industry, which would foster the
technological upgrading of the industry.
The Textile Industry in China is also threatened by the appreciation of the Renminbi as the industry’s
profits are tight. Moreover, a currency appreciation may raise the labor costs and fixed costs which
neighboring competitors might take advantage of.
Textile and Apparel Production in China
In 2004 Zhejiang province overtook Guangdong as the major exporting province in China for Textile
and Apparel. Guangdong, Jiangsu, Shanghai and Shandong are the other four leading Chinese export
provinces. The five leading provinces aggregated export value accounted for more than ¾ of the
country’s total.
Textile Industry Exports and Imports per provinces (million €). 2005
Provinces Export Growth Import Growth
Zhejiang 19.548,1 24,3% 918,8 6,27%
Hangzhou 5.072,1 24,9% 227,6 18,7%
Ningbo 3.993,7 21,3% 194,2 -1,31%
Jiangsu 15.055,7 26,3% 1.633,3 5,07%
Nanjing 2.767,3 16,4% 151,8 -3,47%
Shanghai 10.94,9 10,5% 1.820,4 0,94%
Source: China Chamber of Commerce for Import & Export of Textiles
CEIBS Port of Barcelona Chair of Logistics 42