China's Dyeing and Printing Industry Transforms Growth Mode to Quality-Oriented in Next Five Years   

By Lin Lin & Jia Bin China Dyeing and Printing Association

Output rose

The output and sales of China's dyeing and printing industry kept rising every year during the 11th Five-Year Program (2006-2010), with the growth showing a "V" shape which bottomed in 2008. Dyeing and printing fabric output by major Chinese companies totaled 60.165 billion meters in 2010, rising 66.13% from 2005. That represented an annual growth of 10.69%. Total industrial production value soared 101.53% from 2005 to RMB303.5 billion in 2010 (estimated), representing a annual growth of 15.05%. Sales value jumped 101.97% to RMB296.981 billion (E) in 2010, or annual growth of 15.10%; the proportion of products sold was at a healthy level of 97.84%, above the 97.5% benchmark for high level. See Chart 1 for the output of China's dyeing and printing industry in 2005-2010.

Investment grew

The overall investment scale in China's dyeing and printing industry increased from 2006 to 2010, despite posting an on-year decline in 2007 due to a high year-earlier basis and government macro controls. Investment growth topped 36.68% in 2006 before reversing to a negative 14.56% in 2007, after which demand again started to pick up. The industry entered into a stable growth period from a fast expansion period. The fixed asset investment by major dyeing and printing companies totaled RMB12.522 billion in 2010, up 76.28% from 2005, or an average annual growth of 12.01%. The number of project starts was 208, a relatively low level in recent years. See Chart 2 for a summary of project starts in China's dyeing and printing industry in 2005-2010.

Domestic market sales added

Boosted by strong domestic demand, the domestic dyeing and printing market has been rising steadily year on year. In 2010, major dyeing and printing companies posted combined domestic market sales of RMB249.55 billion (estimated), 2.6 times that of 2005. This represented an annual growth of 21.06%. Domestic sales accounted for 84.03% of total, against 65.28% in 2005. See Chart 3 for the domestic sales value of China's dyeing and printing industry in 2005-2010.
   As people's lives have been improved during the 11th Five-Year Program period, the demand for apparels and home textiles has grown fast. However, the unstable export environment, the appreciating Chinese currency, the reduction in export tax rebate and the implementation of other macroeconomic measures have added pressure to exporters since 2005. Many exporters have shifted to the domestic market in the face of falling export profits, using the home market to hedge against risks in export markets. The domestic market has become the main driving force for the dyeing and printing industry. Companies have been paying more attention to the potential of the domestic market. Companies with annual sales of RMB5 million or above generated 84.03% their revenue in home market, up 18.75 percentage points from 2005's level. Domestic market is expected to remain robust in 2011 and to play an increasingly role in supporting the development of the dyeing and printing industry.

Export increased

Although export volume, export value and exported price fell in 2009, the exports market rose in the rest years of the 2006-2010 period. Exports of the six major types of dyeing and printing products totaled 12.668 billion meters in 2010, up 22.11% from 2005, or an annual growth of 4.07% on average; export value jumped 52.47% to US$12.935 billion, or an annual average growth of 8.80%; the exported price rose 24.86%, or US$0.2/meter on average, from 2005 to US$1.02/meter in 2010. See Chart 4 for a summary of the exports of China's dyeing and printing industry in 2005-2010.
   The export target markets are diversified. The six major types of dyeing and printing products are shipped to more than 200 countries and regions around the world. The main export destinations are Central Asia and the Middle East. Asia nations accounted for about half of the exports while Africa took up one-fifth of total, being the second largest. The European Union, the United States and Japan together made up about 10%. The exports recovered fast after the financial crisis because the main target markets are emerging economies and developing nations. The market share for dyeing and printing fabrics in Asia fell to 46.77% in 2010 from 54.65% in 2005; it rose from 20.48% to 24.52% in Africa; that for Americas rose from 14.45% to 17.34%; and that for Europe increased from 9.90% to 10.92%. See Chart 5 for the export markets breakdown of China's dyeing and printing industry in 2010.

Higher profitability

Companies with annual sales of RMB5 million or above posted total profits of RMB12.68 billion (estimated) in 2010, an increase of 163.36% from 2005, representing an average annual growth of 21.37%. The sector's profitability kept improving as companies upgraded technology, increased energy efficiency and lowered production costs.

Better development environment in 2011

The recovery of the world economy is expected to continue in 2011. Developed nations will keep recovering while emerging economies are set to keep stable and fast growth, sustaining a relatively fast growth in China's dyeing and printing fabric exports. But the export market faces a complicated situation in 2011 due to the many uncertainties in the global economy. Export growth is set to slow. As inflationary pressure may grow in China in 2011, the actual consumption growth may be slower than 2010. Anyway, the domestic demand for dyeing printing cloth remains booming. In general, the development environment of the dyeing and printing industry will improve this year. The economic growth mode for the industry has shifted to quality-oriented from quantity and resource-oriented.
   China's dyeing and printing fabric output is estimated to rise 9% to 66 billion meters in 2011; total industrial production value may rise 20% from a year earlier to RMB364.2 billion; core business revenue may grow 20% to RMB354.5 billion; total profits are set to rise 25% to RMB15.8 billion; total exports may rise 10% to RMB14.2 billion.