China : Textile Exports Likely To Slowdown

According to Chinese economists the exports and imports is expected to slowdown in the current quarter due to SARS impact.

San Feng, senior economist from Economy Forecast Department of State Information Center said that "The impact of SARS would affect the most in the third quarter, while the second quarter is believed to maintain small increasing paces,".

Although China's textile and garment exports continued sharply rising in the first quarter of 2003, they are now expected slowing down in the second and the third quarter, as a result of SARS outbreak.

China's total exports of textile and garment reached US$15,094 billion in the first quarter, up 26,39 % compared to last year. Textile exports rose 31,92% at US$5,359 billion while garment exports increased by 23,54% at US$9,735 billion.

Shipments to main destinations sharply increased, including Japan, Hong Kong and the United States for the top three.

This fast rise in textile and apparel exports is due to a better ability of the Chinese manufacturers to respond to the growing demand since the beginning of 2003.

Textile and apparel imports also rapidly rose, reaching US$3,294 billion by the end of March. According to official figures provided by customs, China's textile imports were up 18,79% at US$3,024 billion while garment imports increased by 11,69% at US$270 million.

Reduced demand, delays in foreign investment, loss of export orders will all add to the erosion of growth, experts warned.

First effect of SARS on exports and consumption was already becoming apparent in April, the month when officials admitted the severity of the epidemic.

According to customs in Ningbo, Guangzhou and Zhanjiang, export growth has slowed down and orders have declined since April 2003.

Whatever impact of SARS, yarn and fabric exports continued substantially rising in April.

Yarn exports were up 20% in volume terms from a year ago while fabric exports rose nearly 30% at the same time. In the January-April period, yarn exports increased by more than 30% while fabric exports rose 91%.

This is a first sign that the SARS impact should not be overestimated. Although growth rate in textile exports was lower in April than in the first quarter, this is in comparison with the higher levels experienced in April 2002 from the first quarter of the same year.

Yarn imports were up nearly 11% in April, resulting in a 21% rise since the beginning of the year. Imports of cotton fabrics declined 2.67%, lowering to 6.48% the level in shipments received in the January-April period.