China's Silk Export Sector Needs Shot in Arm

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Last updated at: (Beijing Time) Tuesday, October 22, 2002

China's Silk Export Sector Needs Shot in Arm

China's 5,000-year-old silk industry is going to have to make some adjustments to face current export challenges, a senior industrial official urged.

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China's 5,000-year-old silk industry is going to have to make some adjustments to face current export challenges, a senior industrial official urged.

Yang Yongyuan, chairman of the China National Silk Association, said although China continues to hold its position as the world's largest silk producer and exporter, there has been an alarming decline in the country's silk exports this year.

Customs statistics indicate that silk exports dropped by 16 per cent to US$1.1 billion for the January-to-June period this year, with some major varieties suffering an even deeper dive.

For example, filature silk was down by 45.8 per cent, raw silk down by 28.4 per cent and silk spinning yarn down by 30.4 per cent.

The alarming drop in exports could well put the industry, which is heavily export-orientated selling 80 per cent of its products abroad, in a dangerous position, Yang said.

It is now a critical time, and if the industry is to survive and reclaim its past glory, China's 10,000 silk producers must foster their own brands and produce more finished products, Yang suggested.

The industry needs to develop its own symbols for high-grade silk and create distinctive and eye-catching trademarks and brand names to identify high quality, top-of-the-line products, Yang said.

It is discouraging to see products from the land where silk was invented often being packaged under Italian brand names and then sold at high prices in world market.

China's silk industry has rested too long on its laurels and has ignored the need to upgrade equipment, techniques, designs and colours, Yang said. The association will help set up a brand name system to label the country's high-grade silk products over the next three to five years, Yang said.

At the same time, China needs to change its role as a raw material provider and put out more finished export products with higher added value, Yang said.

Most Chinese silk producers are involved in raw silk exports and rush to drop prices when demand falls, which further dampens the industry's chances of improvement.

The country's raw silk supplies greatly exceed demand, and prices hit a record low this year, falling from 190,000 yuan (US$22,950) per ton in August 2001 to just 120,000 yuan (US$14,490) per ton at present. In addition to its traditional silk garments, scarf and neckties, Yang suggested producers make more finished products such as bedclothes and silk art products used for decoration.

China will form an association of silk products designers to design better finished products, Yang said.

He also warned that the country, once unparalleled in silk production and sales, will face further challenges from its foreign counterparts in the future.

Countries like India, Thailand, Viet Nam, Brazil and Nepal have made large capital and technological investments to support their silk industries, breaking China's monopoly of the trade.

Yang also suggested that local producers try to foster greater domestic consumption.

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