28 January 2008 08:03 [Source: ICIS news]
SHANGHAI (ICIS news)--China’s textile markets saw a downturn at the beginning of this week as most companies were winding down production ahead of the Chinese New Year in February, said traders on Monday.
The China Textile City in Shaoxing, Zhejiang province, sold 1.15m metres of fabric, 870,000 metres less than Friday.
Bids and orders in another major textile centre Shengze town in eastern China declined sharply as most companies have shut before the Chinese New Year holidays in early February, traders added.
Over 3,000 textile companies operate in Shengze, Wujiang, Jiangsu province.
However, the situation could last beyond the new year holidays as labour costs rose sharply after a new law introduced this year made benefits mandatory.
Many textile companies have gone bankrupt in Chaozhou, Guangdong province, early this year as labour costs rose sharply, said Guo Pengwei, the manager of Mingrui, a textile company in Chaozhou.
"[Textile] bids are going down sharply and there are fewer orders than last year," he added.
China’s textile market will face some pressures in 2008 due to domestic macro-economic control and a slowdown in the US, said an analyst from the China Textile Industry Association.
However, the situation will improve in three to four months when the peak demand period comes, he added.
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