As the State macro-control policy gradually shows its effect, the growth of China’s export of textiles and garments this year will be lower than in 2006.

The Industrial Policy Department of the National Development and Reform Commission (NDRC) predicts in a report that the country’s export of textiles and garments will reach US$165 billion in 2007, up 16 per cent year-on-year.

The report makes the prediction based on three factors: continuous appreciation of the yuan has weakened the price advantage of export products; the trade environment is unstable and an increase in technical barriers has added to the export risks of enterprises; and lowered export rebate rates have exerted pressure on textile and garment exports.

According to Customs statistics, China exported US$57.373 billion of textiles and garments in the first five months of this year, up 15.55 per cent year-on-year. The growth wass nearly nine percentage points lower than in the same period of 2006 and 12.25 percentage points lower than national export growth.

China’s trade surplus of textiles and garments was US$49.973 billion in the first five months, up 17.39 per cent year-on-year and accounting for 58 per cent of the country’s total trade surplus in the period.

The proportion is 68 percentage points lower than in the same period of 2006. A trade surplus may still exist in the latter half of this year, and the yuan exchange rate may continue its trend of appreciation.

This, the report holds, will go on weakening China’s price advantages in textile and garment exports. Meanwhile, the anti-dumping and anti-subsidy measures and technical barriers adopted by some countries and regions may also pose a serious threat to China’s textile export enterprises in the future. The lowering of export rebate rates will produce a negative influence on the country’s textile and garment exports.