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Following the steel industry, the domestic textile & apparel industry stand at the crest of reduced export tariff rebate this time. Recently, some news shows that the export tariff rebate rate of the textile and garment industry will fall again, and the amplitude modulation will be about 2 percentage points, namely from the current 11% down to 9%. The alarm of the outstanding achievement has been sounded. On Mar.15th, Black Peony as a textile & apparel listed company first launched the early warning notice of the reduced revenue in Q1 this year. The company said that due to some factors such as the furious competition of denim market, the continued appreciation of RMB and the decline of export tariff rebate rate, it is estimated that the net profits in Q1 will drop over 50% year-on-year. Public records indicate that black peony earnings 0.06 yuan per share in Q1 2006. "Black Peony sounded the alarm of whole industry’s performance." The marketers judged. The indications showed that more than 50 textile listed companies’ revenue were not satisfactory during the first three quarters of 2006. Up to September 2006, there are 9 listed companies which lost money in business, 23 listed companies which earnings less than 0.1 million per share, and most of the companies’ payoff is not optimistic. Downward trend of tariff rebate is certain "General judgment shows that the downward trend of textile & garment industry's export tariff rebate rate has been determinate", Said Wang Wei yesterday, the researcher of investment securities industry. She believed that downward trend of tariff rebate is certain because of increasing favorable balance of trade and the resolute attitude of State Development & Reform Commission. Statistics showed that the textile industry have a surplus of 21.62 billion U.S. dollars from January to February this year, and accounted for 54% of national trade surplus in the same period. However, from the latest statistical data come from China Textile Industry Association showed that the trade surplus of textiles and garments reached 129.034 billion U.S. dollars in 2006, and accounted for 71% of China's trade surplus. Excessive trade surplus is clearly inconsistent with national policy, the macro-control of textile & garment industry is also reasonable, and lower the export tariff rebate rate is the first choice. Following export tariff rebate rate decreased three percentage points in 2006, State departments jointly issued notice for 5 times up to September 15, 2006, so the textile export tariff rebate rate decreased from 13% to 11%. Recently, the State Development & Reform Commission, Ministry of Finance and the China Textile Import & Export Chamber of Commerce held a meeting to discuss the projects of regulating the export tariff rebate, and it is reported to be lower by two percentage points again. According to the estimates, compared to the trade quantum in 2006, garment industry directly reduced profits for 15 billion dollars high if garment export tariff rebate fall one percentage point. In addition, Wang Wei pointed out that the continuing appreciation of RMB would have a great impact on textiles & garment industry. RMB continued to increase in 2006, and compared to the exchange rate in July 2005 which before reformed, and the range of appreciation was nearly 6%. The data showed that the textile & garment industry would reduce 6.6 billion profits if RMB increase 1 percentage point. Excellent companies benefit from advantages Some media said that the current export tariff rebate rate will lower by two percentage points, including 11% decline in garment industry and 9% decline in textile industry. Another source, garments directly down to 9%, and textiles to maintain 11% unchangeably. Wang Wei considered that once the export tariff rebate policy was implemented, the export-oriented textile & garment industry have a negative impact in the short run. However, in the long term, the decline of the current export tariff rebate may lead to a new industry reshuffle. Resources will focus to the enterprises which have advantages and it is conducive to the industry's long-term development. Some enterprises with advantages such as Yonger Group and Dayang-Chuangshi are worth to being regarded. According to the investigation report of CITIC, besides Yonger and Rutai, some other textile & garment stocks such as Xunxing shares, Weixing shares and 7 wolves are expected to gain benefit in a new reshuffle. We are high quality suppliers, our products such as Instructional DVDs , Discount Software Sales for oversee buyer. To know more, please visits Office Utility Software.
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