2007 is a difficult year for the cotton textile sector. Various negative effects jointly act on cotton textile enterprises. Nevertheless, the whole sector operated well in 2007 and maintained steady growth despite certain slowdown of growth rate.

In 2008, where will the cotton sector go? Mr. Xu Wenying, Vice Chairman of China National Textile and Apparel Council and also Chairman of China Cotton Industry Association, believes that the cotton sector will face a more severe situation. First of all, the sector will face the pressure of higher cotton cost. According to Mr. Xu, the cotton consumption in 2008 may top 12 million tons, so there will be a big shortage to be made up by imported cotton, while the import price remains high after the sliding duty is levied. As a result, the average cotton price on domestic market is higher than that on the world market. But Mr. Xu believes that the cotton sector will maintain steady growth in 2008, because the sector has established a large-scale production system of higher level and accumulated competitive advantages, 30% of the enterprises have improved their competence through technical reform and they will be the hard core to support the economic growth. However, the growth rate will drop further and most enterprises will face greater difficulties. The most prominent problem faced by the cotton sector is the over-supplied conventional products. Therefore, the prime task of the sector in 2008 is to promote technological progress and industry upgrading, so as to reduce labor cost to 50-60 persons/10,000 spindles.

Mr. Xu asks cotton textile enterprises to do the following jobs: increase average yarn count and open up market; make greater efforts to technical reform, promote the application of state-of-the-art equipment and accelerate the elimination of obsolete cotton textile equipment and reduce the number of labor for every 10,000 spindles; develop new fibers and increase the consumption of non-cotton fibers, so as to ease the pressure brought by cotton shortage; accelerate the institutional reform of some enterprises and establish high-efficient innovation mechanism.  

(Courtesy China Textile  Leader No.2 2008)