Industry adjustments, government action and product innovation kept China’s textile industry solvent in the first half of 2009, in spite of a decline in exports due to the global economic crisis.

The Chinese government increased the ratio of tax refunds on exported textiles and apparel by three times and introduced a series of structural adjustments and revitalization plans for textile industries. These policies have stimulated China’s textile economy, which at mid year appeared to be bouncing back. Compared with other parts of the textile industry, nonwovens and technical textiles are recovering more quickly.

Among the three main economic pull factors—exports, investment, consumption—the positive effects of the first two on the industry had stopped by mid-2009 and consumption had slowed. The nonwovens and technical textile industries, however, were affected to lesser degrees.

From January to May 2009, China’s nonwovens and technical textile industries grew 28% over 2008. Compared with a growth rate of only 12.5% in January and February 2009, the industry saw a large increase in the first half of the year. During this period, the gross profit margin for nonwoven and technical textile manufacturers was just above 13%, with a profit margin of 4.5%. For upscale nonwoven manufacturers, industrial output increased 7.6%, the value of new products increased nearly 2%, assets almost 12%, and revenue nearly 6%, and total profits increased 16%. Upscale nonwovens decreased in the value of manufactured products exported, a decline of 9%, and in number of employees, which declined one-half percent.

Investment in the domestic nonwovens industry brought its slowdown to a halt. From January to May, total investment increased 47.5% over 2008. During the same period, there were 134 projects, an increase of 25%, including 83 new start-up projects, an increase of almost 30%. By the end of May, there were 24 finished projects, an increase of nearly 85%, which made up 18 %of the total.