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China exports and sales see good start to year 2011

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At the beginning of 2011, both exports and domestic sales of China textile see a good start as exports and domestic retails increase faster than what people previously expected on. China's textile industry is now growing on a steady and healthy way, yet we have to face the situation rationally at the back of our excellent performance showing on the growth data we collected. In 2011, the operating pressure added on Chinese textile industry has not been decreased, whereas it is still necessary for us to take all the risk factors into account.

Exports growth goes beyond the expectation.

According to the related data from China Customs, In January 2011, China's textile and apparel exports value is 216.18 billion U.S. dollars, which increased 38.58% year on year; the exports growth rate is increased by 14.99% comparing with its 23.59% in 2010. Of which, the textile product exports are 8.243 billion U.S. dollars with an increased of 47.48%; The exports of apparel products and accessories are 13.376 billion U.S. dollar, which is increased by 33.61%.

In January, the exports data shows a great beginning of China's textile industry with a high growth rate affected by multiply factors altogether.

Firstly, there is a huge demand on global replenishment. The related data from U.S. Department of Commerce shows that the demand for replenishment from U.S. Commerce and Manufacturing is incline to steadily increase since 2010.As of December 2010, the business inventories increased 8.06% while the manufacturing inventories increased 7.93% year on year, which means that the business inventories in November 2010 grow faster for 1.07 percentage points and the manufacturing inventories grow faster for 1.19 percentage points, respectively.

Secondly, the base of exports value is relative lower at the same time last year, which directly leads the data of the growth rate in January this year to a higher level. According to the data from China Custom, China's textile and apparel exports value is 15.958 billion U.S. Dollar in January 2010, which is only increased 2.31% than the same period of time in 2009.

Lastly, it is clear to recognize from the data we collected year by year that, affected by the Spring Festival holiday, the exports and imports are exceptionally active before the Chinese holiday. China's textile exports fluctuate most within the two months before and after the Spring Festival. In 2011, the Spring Festival is at the beginning of February so that January becomes a busy month of the exports trading.

Sales in domestic market waving winner's flag

While the exports seem to have gone beyond the expectation, the textile sales in domestic market boom hard like a rabbit which re-illustrates a good fortune for this Chinese lunar year. According to the tracing data provided by Chinese Ministry of Commerce, In January 2011,there are about 3000 highly selected retailers achieve the sales higher than 26.9% year on year while the growth rate is 7.6% higher than December last year. It is noted that the growth rate of apparel products is 37.2% within the same proportion, which is 10.6% higher than the average level of the retail industry growth rate.

The diagram above indicates that, currently, the comprehensively prosperity on China's macroeconomic environment induce the domestic citizen consume more with huge favor. The high growth in demand for domestic market will continue playing an instrumental role for supporting and operating the China textile industry.

Risks linger on

Even though the data shows good trend in China textile industry exports and monthly sales in domestic market in January, it is still necessary for us to being rational regarding the current situation. The operating pressure has not been decreased hence have us to be especially cautious about the risk factors.

Material prices have been increasing at an unprecedented level in China. With the global economy recovery and global decrease in cotton production in 2010, the domestic textile enterprises turn back to the right way while on the other hand the demand for the cotton still increase tremendously. The result is very clear that the price of cotton rise up in China textile market and boom in to be the historically highest point at global market since the Civil War in United States. At the beginning of 2011, the issue concerning the increase on the price of raw material in textile industry has been neither resolved nor inhibited. One of the typical phenomenon here is the price index of cotton is still located at the speeding interval and actually, the price of polyester staple fiber keep soaring because of the chain effect in the market.

Secondly, the rising issue about salary these years is still putting capital pressure on textile enterprises in 2011. Some expertises even make a statement that the time of the least expensive labor force in China is over. However, as a result of labor-intensive textile industry, textile enterprises will have to be haunted and suffered by rising price of the labor force.

Moreover, at the beginning of 2011, People's Bank of China decides to emphasize on regulating the money supply, which means that the central government decides to continue the tight-monetary policy in last half of year in 2010. The increased interest rates will strengthen the pressure of RMB appreciation which could have some negative effects on the exports of China textile enterprises to some degree.

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