In yet another dark spot for the textile and garment industry, imports of textiles and apparel by the US, European Union, and Japan fell 6.55% year over year in the first three months of 2012. The data, released by the China Textile Industry Association, hinted at the impact of continued market slowdowns in the developed world. China has been attempting to replace export driven growth with internal consumption, but has had difficulty as its own economy has begun to slow.
The data also showed that China’s export growth to the Association of South East Asian Nations continued to decline, growing by a scant 2.69% – less than half the rate of Q1 2011. The total industry output growth for a basket of surveyed textile enterprises also fell by 17.43 percentage points, year over year.
The association insists that the slowdown is the result of price disparities between China’s domestic and imported cotton and is not related to recent wage increases or difficult hiring workers. Many foreign observers speculate that the slowdowns represent a more seismic shift for China, as rising production costs have definitively begun to undermine the nation’s competitiveness at the bottom of the value chain.
Despite the drop in imports from developed countries, India, Bangladesh, Vietnam, Honduras, and other emerging textile powers have seen their exports increase. This indicates that those nations and others are capturing market share from China.