Textile Machinery Imports Slow

China's textile machinery imports will continue to decline even after the recovery of the country's textile industry, officials with the China Textile Machinery and Accessories Association predicted.

But authorities anticipate closer collaboration between home and overseas producers after the country's entry into the World Trade Organization (WTO). China imported US$1.2 billion in textile machinery last year, according to official statistics.

Although that represented a 7.41 per cent increase from 1998, it indicates a plunge from China's record high US$3.5 billion in imports in 1993.

The proportion of imported machinery in the total has fallen to 50 per cent from 75 per cent in the early 1990s.

Stagnancy in China's textile industry since 1994 has had a negative effect on the country's textile machinery imports, said Wang Shutian, secretary-general of the association.

China's textile industry began to lose money in 1994 because of surplus low-grade production capacity.

It was forced to reduce its production scale by about one-fourth in 1998-99.

"The setback in the country's textile industry seriously affected China's textile machinery imports," said the secretary-general.

The country's textile machinery industry was also dragged into a losing bog, he said.

It lost more than 100 million yuan (US$12 million) in 1998, but started to make profits again at the end of last year after one year's efforts to upgrade its technology.

Domestic textile machinery producers greatly improved the quality and functional stability of their products through the reform, said Wang.

"Domestic-made textile machinery will take the place of part of the imported machinery," he said.

China now has more than 1,000 textile machinery producers with about 20 billion yuan (US$2.4 billion) in production capacity.

Imported machinery lost its free customs duty privileges in 1995, Wang said.

He said the loss of favour increased the prices of imported machinery by about 30 per cent on average.

But he is quick to add that China's entry into the WTO will be more a blessing than a blow to the country's textile machinery industry.

China's tariffs on textile machinery has been low enough to tally with the requirements of the WTO, he said.

Imported textile machinery is taxed at a rate of 8 per cent to 10 per cent at present.

China's WTO membership will facilitate technological exchange and make it easier for home textile machinery producers to work with international partners to form a complete set, said Wang Shutian.

Although China's textile industry trailed out of the losing maze last year and started to improve its equipment, the country's textile machinery imports are not likely to shoot up, he said.

Wang said that for products of the same grade, home-made textile machines are far cheaper than imported ones.

(Source: CIEC)

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