The Chinese government is encouraging its textile companies to invest in textile sector outside the country, especially in countries which are known for cotton production. This was stated by the Chairman of Chinese Chamber of Commerce for Import and Exports of Textile (CCCT), Wang Shen Yang, at a luncheon meeting with Aptma members at Aptma House here on Tuesday.
He said that China has been world leader in textiles for past 11 years, and 93 percent of the textile companies were in the private sector. Hence, Pakistani textile companies would have no regulatory problems in entering into joint ventures with them.
He did not agree with the suggestions that China was offering subsidy to its textile exporters to compete in the world market, or the government was providing free energy to help reduce the cost of production. The cost of labour in China is 100 percent more than Pakistan. The key factor in Chinese success in textile is that its industry is on a very large scale, and only one textile mill has six million spindles with 150,000 workers, he added.
The Chinese delegation was informed that Pakistan was the largest exporter of yarn and fabrics to China and Hong Kong, but was far behind in export of value-added textile products to that country because of non-competitive prices. It was pointed out that in some cases prices of Chinese finished goods were less than the prices of raw material. The Chinese side did not agree to the pricing formula and insisted that the prices of Chinese products were lower due to its industry enjoying economies of a very large scale.
Wang Young said that the visit of the Chinese delegation to Pakistan was to study the local textile industry and explore the possibilities of co-operation with Pakistani textile owners. He said that textile trade between the two countries amounted to $770 million, of which Pakistan exported products worth $450 million, against $330 million worth of exports made by China. The textile trade between the two countries registered a growth of 12 percent last year but it has increased by 24 percent during the first six months of this year.
Earlier, Aptma Chairman Arif Saeed made a presentation on Pakistan's textile industry and said that, of the total textile exports of $9 billion, value-added products contributed $5 billion.
The textile sector has received investment of Rs 550 billion during one year while the investment aggregated Rs 450 billion in first six months of the year. Most of the investment went into import of machinery for the spinning and weaving sectors.
About the growth projections up to 2010 in the textile sector the Aptma Chairman said that textile exports would increase from $9 billion to $16.4 billion with most of the sector registering double-digit growth. Total investment in the textile sector would reach $6.3 billion by 2010.
He said that main obstacles in the growth of bilateral trade are communications, visa restriction and higher tariffs. He stressed the need for improving bilateral market access to promote trade between the two countries.
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