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CNTEX: Fixed-asset investment in textile industry slows in Q1-Q3 as curbs weigh on economy

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Fixed asset investment growth in China's textile industry slowed in the first three quarters this year, mainly resulting from the yuan appreciation, the rising material and labor costs, as well as dismal overseas market hit by the subprime lending crisis.

 

Table 1. Investment in fixed assets in urban areas by industry (2008.01-09)

 

Investment
( billion yuan)

Growth rate over the same period of the previous Year (%)

urban areas

9987.1

27.6%

primary industry

152.7

62.8%

secondary industry

4494.5

30.2%

tertiary industry

5339.8

24.8%

Source: National Bureau of Statistics of China

 

Table 2. Fixed-asset investment in textile industry by sector (2008.01-09)

Sector

Investment
(million yuan)

Growth rate over the same period of the previous Year (%)

New project number

Change of new project number

total

202269.04

10.15%

4783

-468

cotton textile

54013.94

-2.92%

1258

-198

printing & dyeing

6966.74

18.75%

143

1

wool textile

7181.72

31.27%

168

25

linen textile

2160.83

18.85%

47

-7

silk

4006.97

4.16%

126

-19

finished products

21979.37

10.88%

528

-44

knitting

16819.28

0.58%

519

-80

garment and accessories

62631.00

20.38%

1709

-166

chemical fiber

22170.66

18.57%

194

22

textile machineries

4338.53

16.39%

91

-2

Source: National Bureau of Statistics of China

 

From January to September, the total fixed-assets investment in the textile industry was up 10.15% to RMB 202.269 billion year-on-year, but that was 22.98 percentage points less than the growth rate of the same period last year.

 

The amount put in cotton textile sector decreased 2.92% from year ago, 27.54% lower than the same period last year, and that for garment, chemical fiber and textile machinery sectors rose 20.38%, 18.57% and 16.39% respectively, still 25.36%, 29.92% and 35.29% lower from the figures achieved last year.

 

As long noted, China??s robust manufacturing output was largely being achieved through strong productivity of developed eastern provinces. However, over the past couple of years, China has been fastening its grand western development program, to boost the development of the middle and western land.

 

The data here illustrates the relative share change of production activities across China: From January to September, the amount put in Eastern Region decreased 0.61% from year ago, and that for Central Region and Western Region rose 32.75% and 40.35% respectively.

 

Table 3. Fixed-asset investment in textile industry by region (2008.01-09)

Region

Investment
( million yuan)

Growth rate over the same period of the previous Year (%)

Proportion

 

National total

202269.04

10.15%

100%

Eastern Region

126684.86

-0.61%

62.63%

Central Region

56869.73

32.75%

18.12%

Western Region

18714.45

40.35%

9.25%

Note: Due to the projects are not classified by the areas, hence, the accumulated value of investment of eastern, central, and western do not equals to the national total.??

 

The slowdown in fixed-asset investment that is the major engine for the industry would hamper technology improvement and innovation and further undermine investor confidence. Fortunately, the government recntly unveiled a stimulus package estimated at four trillion yuan over the next two years to boost domestic demand. The money is marked for programs in 10 major areas, such as low-income housing, rural infrastructure, water conservancy, electricity, transport, environment, technological innovation and rebuilding from disasters, most notably the May 12 earthquake.

 

However, it would be a while for the stimulus package to take effect on bolstering investments, and fixed-asset investment in textile industry would keep falling over the next couple of months.

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