China's cotton textile firms are feeling the pressure of rising costs and the appreciating yuan, according to an industry survey that shows almost half of surveyed firms are considering closing down.
The China Cotton Textile Association survey probed cotton companies in
17 provinces. Some 49.2 per cent of surveyed companies said rising
labour and production costs and the appreciating currency were creating
insurmountable problems for the export-oriented industry. More than 25
per cent said that the Chinese currency's appreciation is the largest
threat to their existence. More than 44 per cent said they would start
selling their products locally, instead of exporting them, in order to
maintain a higher profit margin.
The survey also shows that companies cut their investments by as much
as 15 per cent, due to shrinking profits and the removal of tax
rebates. A similar survey last year showed that the more than 70 per
cent of cotton companies are earning a profit margin of well below one
per cent.
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China's cotton textile firms are feeling the pressure of rising costs and the appreciating yuan, according to an industry survey that shows almost half of surveyed firms are considering closing down.
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