Authorities at Guangdong, which has one of China's largest export-processing zones in the Pearl River Delta, rebutted forecasts of a decline in business, said First Financial Daily in Shanghai. They supported this with statistics that indicated that exports from Dongguan, the largest city in the Pearl River Delta, were at a record high of US$11.85 billion in July.
On the other hand, growth in exports from Dongguan actually fell, from 10% in May to 6.5% in July, including a 16.6% dip in exports to the U.S., to US$1.63 billion.
Chen Yaohua, president of the Dongguan Textile and Apparel Association said the Pearl River Delta is going through its toughest period since the 2008 global financial crisis, as is China's other major export-processing zone, the Yangtze River Delta.
National Business Daily in Shanghai said Junan Town, which was promoted as China's jeans-manufacturing capital, has lost its glory now, as nearly one hundred jeans factories there collapsed in the first half of this year.
Many factory owners, who had accumulated heavy debts, opted to desert their businesses, forcing their unpaid workers to turn to authorities for help, said the newspaper.
A jeans factory owner, Chen Haiping, complained that overseas orders were diminishing, while buyers were demanding greater quality. He added that the days were gone when buyers used to pay cash for whatever stocks they could lay their hands on.
Gao Yongzheng, vice president of the China National Textile and Apparel Council said net profit margins for the country's textile industry, at about 3-4% and never over 5%, could easily be wiped away by the appreciation of China's currency, which had grown 2.33% in the first half of this year.
If the value of the renminbi rose 5%, Gao predicted, half of China's textile and apparel industry would close down.
Tang Pinghua, an apparel industry expert, told the National Business Daily that the rising value of the renminbi was contributing to the industry's mounting costs. Coupled with restricted access to loans under China's tight monetary policy, this was threatening the survival of small- and medium- enterprises, since they could not pass the cost increase to their buyers.