The Hong Kong textile industry is following trends, quite similar to its counterpart in the clothing sector. During the recent past, there was a stagnancy overtaking the once vibrant garment industry which has seen its glory diminishing with each passing year. In the same vein, fortunes of the textile industry too are witnessing a decline in recent years.
Exports from the textile sector are posting negative or miniscule growth rates since the last three years. Global shipments which had recorded a negative growth in 2005 of 3.4 percent in comparison to 2004 rose by a marginal 0.5 percent to touch US $13.85 billion in 2006 from $13.79 billion in 2005.
In the following year of 2007, it slipped to $13.42 billion to clock de-growth of 3.1 percent. The performance worsened in the first six months of the current year. Growth rates dipped further to 5.4 percent in comparison to the same period of 2007 to reach $6.34 billion.
China, which is its biggest customer with a share of 69.6 percent of overall shipments of textiles, has also witnessed a downturn in export revenues. For the first half of the current year, shipments have seen a downfall of 5.4 percent to touch $4.42 billion when corresponded with figures of the previous year.
For the preceding three years too, shipments which stood at $9.44 billion in 2005, grew to just $9.70 billion in 2006 to record a nominal growth of 2.8 percent, to fall again in the very next year. Shipments fell way back below 2005 figures to attain $9.42 billion in 2007 to wipe out the gains of the previous year.
The countrys second largest customer, Vietnam has also seen its imports of textiles sliding or staying near dormant in 2005 and 2006, but managed a dramatic turnaround in 2007 and more so again in the first six months of the current year. In 2005 Vietnam imported textiles worth $332 million and $341 million in 2006 to register a growth of a mere 2.7 percent.
But 2007 was the year: the once morbid textile exports turned on its heels completely. Shipments soared to $443.0 million to clock gains of an incredible 29.9 percent. This superlative performance was followed by another, when shipments in to Vietnam posted a gain of an unbelievable 29.7 percent to reach $265 million in the first six months of 2008 over the corresponding period of the previous year.
Out of the 30 major countries to which exports from Hong Kong originated, the territory could manage to increase its exports of textiles to only 12 countries, while shipments to the other 18 countries posted negative growth rates.
Amongst the other countries to which Hong Kong could improve its performance in the period Jan-June 2008 vis--vis the same period in 2007 were Honduras with a gain of 18.8, Republic of Korea 17.4, Germany 17.2, Taiwan 14.1, Indonesia 11.5 and Cambodia 9.2 percent.
Amid the 18 other countries which saw a fall in their growth rate of imports of textiles in the same comparative period from Hong Kong were Philippines 20.3 percent, India 16.6, Jordan 16.5, Macau 16.1 and then the USA with 13.7 percent. These countries are among the countries with a major value in imports.
Hong Kong clothing companies have built a reputation for reliability. They are able to deliver quality clothing articles in short lead times, as foreign importers and retailers became more and more demanding to tighten up supply chain management to ensure that the ordered merchandise reaches the store floor at the right time.
But after the elimination of quotas in 2005, China signed individual agreements with the US and EU for continuation of quotas on a select number of categories. Along with the above agreements, tariffs on exports of all products of Hong Kong origin including that of textiles and garments were removed from January 1, 2006.
To take advantage of the quota agreement of China with the US and EU and also due to the high cost of conducting their manufacturing operations in the administrative territory, a lot of business shifted to the mainland, which has ultimately led to the sluggish growth in exports of both; textiles and clothing.
Exports of textiles from Hong Kong
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