GOVERNMENT priority has been to curb the skyrocketing trade surplus in formulating policies. But now that exports have indeed slowed down, more problems have surfaced and both industry and government bodies are worried.

Chinese textile companies have been hit the hardest as many rely on exports for revenue and the profit margin for most is narrow. Faced with rising costs for raw materials, no export tax rebate and rapid yuan appreciation, many textile manufacturers are saying this is going to be the toughest year ever.

If a lot of these labor-intensive textile companies do go under, the government will be faced with a rising unemployment rate. Official figures show the textile industry alone employs more than 20 million people across China, most of whom are migrant workers.

Textile and garments exports make up nearly 13 percent of China’s exports. The total export value of textiles and garments in the first quarter of this year was US$38.5 billion, up 19.47 percent over the same period last year. Experts say that although it is still increasing, the pace of growth has slowed.

The rate of growth in regions that focus more on exports is lower than other parts of China. Exports in Guangdong Province, for instance, amounted to US$7 billion, up only 0.87 percent.

Many export-oriented small enterprises have already been shuttered, while some small foreign-invested textile enterprises have moved to other places.

The situation has alarmed government officials. Cao Xuejun, an official in charge of textiles from the National Development and Reform Commission, said the government was “very concerned.”

At a recent conference, Cao said the situation this year was not good for textile companies given the state of domestic and world markets.(SD-Agencies)