On April 29, ten ministries and commissions, including the National Development and Reform Commission (NDRC), the Ministry of Finance and the Ministry of Commerce, jointly issued a circular to guide the restructure and upgrading of the textile industry in the 2006-2010 period.

Last year the industry was listed by the NDRC as one of the 11 confronted by overcapacity or having potential for overcapacity.

"The textile industry is going to have a hard time in the upcoming five years," Zhang Li, an official responsible for the textile industry from the Bureau of Economic Operations under the NDRC, told China Business News on May 17. "However, industry insiders have different views on whether the industry has overheated," she said.

According to Zhang, since the textile industry has been internationalized and the rule that the fittest survive is well established, whether the industry is overheated is not really the question.

She pinpointed its structure as the most prominent problem hindering the industry’s further development. "This is the reason why the government requires the industry to readjust and upgrade its structure," she said.

According to the circular, by the end of the 2010, the gross volume of processed textile fibers will reach 36 million tons, an increase of 35 percent from the end of 2005; per capita labor productivity will go up by over 60 percent; energy consumption by every 10,000 yuan (US$1,247) in added value will decline by 20 percent; and water consumption for producing one ton of fibers will drop by 20 percent.

At the same time, the circular said, the industry needs to develop some key technologies and home brands which are recognized worldwide.

On the issue of trade frictions, Zhang said, exports to the United States and European Union this year has fallen by 60 percent and 35 percent respectively. However, trade difficulties are going to be more diversified and complicated with some frictions more difficult to cope with such as anti-dumping, social responsibility and technical barriers, she added.

(China.org.cn by Yuan Fang, May 26, 2006)