China : Shaoxing textile city in pricing dilemma

From September 15 this year, the textile export tax rebates declined by two percent, from 13 to 11 percent. To textile industry that only has an average profit of three percent, this will be like rubbing salt into the wound.

Textile enterprises in the famous fabric base, Shaoxing County, have generally raised their prices to deal with the impact of the lowered rebates. But some enterprises worry that they might lose customers, so they dare not to raise price, nor have the ability to uplift price.

In addition, homogenization of products is serious; the majority of textile enterprises in Shaoxing County sink deeply in a low-price competition. According to the sources from the industry, weaving, dyeing and printing enterprises are, particularly, passing through a bad phase, in order to keep operation and retain workers, some enterprises even accept non-profit orders. It is reported that the average profit rate of textile industry is less than one percent.

Shaoxing County's exports amounted US $3.36 billion last year, of which, textiles shared 93 percent of the total export.

Fabrics account for 80 percent of Shaoxing County’s textile industry, while garment and textiles only account for 20 percent, such a situation is difficult to change in a short period of time.
 
 
Fibre2fashion, News Desk - China