The more difficult business conditions that have befallen Chinese manufacturers are being felt in exports of textiles and apparel. April data show exports reaching $14.6 billion, the strongest April on record, but reflecting growth decelerating to just 11.6% from one year earlier. After the removal of global quotas for WTO members, Chinese textile and apparel shipments surged 23.4% and 18.3%, respectively, in 2005 and 2006. But issues including the reduction in export tax rebates and strengthening yuan continue to impact profitability for many Chinese firms. For a more detail on these issues, click here.

The distribution of destinations of Chinese textile and apparel exports continues to evolve. From year-earlier levels, cumulative 2008 shipments to the U.S. continue to falter, owing to the weaker dollar and lackluster consumer demand. Meanwhile, year-to-date exports destined for other markets in Asia, Africa, and especially Europe are up between 16—36% from the same period last year.