Roundup: State Textile Firms Out of DoldrumsChina's long-plagued state textile enterprises earned a profit of 6.7 billion yuan in 2000, seven times more than the profit of the previous year.A report issued Tuesday by the State Economic and Trade Commission (SETC) said that the profit of the textile sector hit 29.01 billion yuan last year, up 1.2 times from 1999. State-owned and state-holding textile firms contributed to 20 percent of the total, as against 7 percent in early 1999. Before 1998, the overall returns of state firms in China had been deteriorating, and the textile sector, burdened by years of excessive production, had remained in the red for six years running since 1993. In 1996 alone, the loss was as high as 8.3 billion yuan. China started the three-year campaign to turn around most of the state firms in 1998, and put the textile sector at the forefront of the reform. Since then, a series of measures such as downsizing and phasing out redundant spindles, have been taken to improve the sector's operation. By 2000, the sector eliminated a total of 9.4 million outdated spindles and laid off 1.4 million employees in over 36,000 state textile firms. As a result, the sector erased the deficit and started to earn profit in 1999, although the profit figure was only 900 million yuan. To further speed up reform of the state industries, the central government launched a series of policies in the past three years, which included the debt-to-equity swap, funding of enterprises' renovation, bankruptcy and merger policies as well as tax rebates to encourage exports. Zhu Hongren, an official with the SETC, said that the improvement of the global textile market also contributed to the surge in enterprise profits. Boosted by an increased demand from the international market, China's textile and garment exports hit a new record of 52 billion U.S. dollars in 2000, up 20.9 percent from the previous year, and accounting for one-fifth of the country's total. Domestic sales of textile products turned better in the latter half of 2000. The total industrial output of the sector stood at 800 billion yuan or an annual increase of 9 percent, while the sales revenue of state textile firms hit 250 billion yuan. Zhu noted that problems still exist which will hamper the long- term development of the sector. For example, China still lacks high value-added exports and standard design capacity, and most of the domestic garment producers have yet to establish their own brandnames that are well known by international consumers, Zhu pointed out. |
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