General Overview
Galvanized by the favorable policies of the State Council, cotton textile industry has successfully recovered from the shadow of the financial crisis. Positive signals emerged from all aspects. Production growth of major products kept climbing up. Export decline gradually alleviated. Both downstream and upstream market saw continuous positive recovering signals. General situation of cotton textile industry of the year 2009 spiraled up against the global financial crisis evidenced by the recovery of industry fixed asset investment.

Yarn & fabric output saw steady increase
Statistics from the National Bureau of Statistics indicated that yarn output of the first eleven months of 2009 reached up to 21.69 million tons, increased by 11.79% as contrast to the same time period of last year. Fabric output reached 51.338 billion meters, increased by 4.42%. Compared with the first half year, output of both yarn and fabric in the second half year were all more stabilized and welcomed more positive signals, especially since after the third quarter.

Fig.1 Yarn & Fabric output growth from January to November

Export decline were inevitable and still requires time to recover From the January to November, over $55.9 billion dollars of cotton textiles and garments were exported, down by 14.42% year-on-year, in which $16.13 billion dollars of cotton textiles were exported, down by 16.38% and $39.81 billion dollars of garments were exported, down by 13.6%. The export declining velocity of cotton-made garments as reflected in Fig.2 kept enlarging while the export of cotton textiles were seeing more obvious decline for the first half year of 2009.

Fig.2 Export growth of cotton textiles and garments

As of November, 2009, all five major export markets including EU, USA, Hongkong, Japan and ASEAN countries remain weakened:

EU, USA & Hongkong: The economy downturn tendency of EU, USA has basically ceased since the third quarter. Exportation of these two regions including Hongkong also gradually became steady.

Japan: The economy of Japan remained depressed until the end of 2009 leading to a weakened market demand. Cotton textiles and garments exported to Japan were severely affected and the descending magnitude kept enlarging.

ASEAN Countries: ASEAN region is the best recovered market in the year 2009. The export value rebounded back to the same level of 2008 until November.

Statistics unveiled by the General Administration of Customs of the P.R.C indicated that about 488 thousand tons of yarn and 5.8 billion meters of fabrics were exported during the first eleven months of 2009, respectively declined by 5.7% and 6.65%. Fig.4 indicated that denim fabrics witnessed very steady export during the whole year. Yarn-dyed fabrics export, nevertheless, was very unstable. Greige fabrics export, however, exhibited as depressed in the first half year and picking-up in the second half year. Until the end of November, export of greige fabrics has increased by 9.69% as contrast to the same time period of last year while the growth velocity of yarn-dyed fabrics and denim fabrics respectively descended by 11.96% and 15.48%.

Fig.3 Cotton textiles export: January to November

Holistically, exportation of cotton textiles in the whole year of 2009 failed to reach the expected level influenced by the financial crisis. Domestic market therefore, became an indispensable cake that most export-oriented companies attempted to get a piece. The recovery of export relies to a very large extent, the recovery of world economy. Although the new year 2010 was widely forecasted and expected as an improving year, the appreciation of RMB and the possibility of inflation also put new risks on exportation.