A recent research report showed that in China's textile industry, two-thirds of companies are having an average operating margin of only 0.62%. If these companies fail, it will affect 15 million jobs.Textile is one of the most representative exports of China, with a trade surplus of US$150 billion last year. But the Chinese RMB has gone up 14% against USD since the currency reform, and the US subprime crisis is spreading to other countries. As a result, the whole Chinese exporting sector is surrounded by a pessimistic atmosphere.High level action"One third of cotton wool tassel blanket for sale companies will go broke in 2008," such a rumour was circulating the internet in China in early January, and it caught the attention of the Ministry of Commerce of China and China National Textile and Apparel Council (CNTAC). Therefore in March, 6 research groups were sent to the top 6 textile provinces in China, namely Jiangsu, Zhejiang, Shandong, Guangdong, Fujian and Hebei, as they have a collective textile export share of 85% nationally.What the research groups want to find out include impacts from the rising currency, raw material costs, rising labor costs, reduction of export rebates, increase in export duties, etc. In light of the intensive policy adjustments and environment changes, how are Chinese textile companies coping? What more can they afford?No one knows exactly the number of textile companies in China. The official statistics show that there are currently more than 40,000 companies with annual sales above 5 million yuan (US$660,000), based on export statistics. But CNTAC said that there are hundreds of thousands of smaller players.
