Saturday, February 28, 2009
China's Textile Business in serious trouble.
http://www.nytimes.com/2009/02/28/business/worldbusiness/28textile.html?ref=business
SHAOXING, China — This was a city that globalization built.
Not long ago, 20,000 textile and garment factories were bustling here.
The warning from Beijing last December was dire, too: As many as two-thirds of the country’s textile and apparel companies could go broke.
few sectors are as crucial to China’s economy as the $450 billion textile and apparel industry
Last year, the industry accounted for $153 billion of China’s $300 billion trade surplus, far more than any other industry.
The head of the Jianglong Group, one of Shaoxing’s biggest dye factories, ran off in November, leaving behind 4,000 workers and more than $200 million in debts.
Shen Ye, the owner of the Jinyu Textile Import and Export Company, whose orders are down as much as 80 percent, said some struggling factories were desperate but were afraid to seek bankruptcy. “If a factory files for bankruptcy, it has to pay back taxes to the government, salaries to the employees or money owed to the bank,” he said. “What’s left goes to private lenders. How much can be left? None! In order not to be beaten to death, they have to run.”
Typical of Chinese Businessmen and Chinese loan sharks! "Beating to Death" and "owners running away"!
This is rather large news... since imported textiles are largely discretionary spending, they are VERY strongly affected in a recession. When you get right down to it, even for electronics like Plasma TVs, there is a lot of pricing difference due to difference in quality and value... for clothes, a lot of similiar products are only differentiated by brand name... and about 700% mark-ups.
In any case, if textile exports fall badly, so will China's Trade Surplus... and if it's trade surplus falls, watch it's purchase of US treasuries fall as well.
SHAOXING, China — This was a city that globalization built.
Not long ago, 20,000 textile and garment factories were bustling here.
The warning from Beijing last December was dire, too: As many as two-thirds of the country’s textile and apparel companies could go broke.
few sectors are as crucial to China’s economy as the $450 billion textile and apparel industry
Last year, the industry accounted for $153 billion of China’s $300 billion trade surplus, far more than any other industry.
The head of the Jianglong Group, one of Shaoxing’s biggest dye factories, ran off in November, leaving behind 4,000 workers and more than $200 million in debts.
Shen Ye, the owner of the Jinyu Textile Import and Export Company, whose orders are down as much as 80 percent, said some struggling factories were desperate but were afraid to seek bankruptcy. “If a factory files for bankruptcy, it has to pay back taxes to the government, salaries to the employees or money owed to the bank,” he said. “What’s left goes to private lenders. How much can be left? None! In order not to be beaten to death, they have to run.”
Typical of Chinese Businessmen and Chinese loan sharks! "Beating to Death" and "owners running away"!
This is rather large news... since imported textiles are largely discretionary spending, they are VERY strongly affected in a recession. When you get right down to it, even for electronics like Plasma TVs, there is a lot of pricing difference due to difference in quality and value... for clothes, a lot of similiar products are only differentiated by brand name... and about 700% mark-ups.
In any case, if textile exports fall badly, so will China's Trade Surplus... and if it's trade surplus falls, watch it's purchase of US treasuries fall as well.
Jasonred79 invested at
6:00 PM
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