Analyze the problems faced by China's textile and garment industry in 2010

With the gradual recovery of the global economy and the cumulative impact of supportive policies aimed at the textile and garment industry, China’s textile and apparel exports are currently at a crucial stage of stabilization and growth. However, despite this positive trend, the sector still faces several significant challenges that could hinder its long-term development. First, the profit margins of textile companies have been shrinking. Since 2009, as cotton yarn and cloth markets improved, domestic cotton demand has surged, leading to rising prices. As of February 26, the price of Grade 3 cotton reached 14,990 yuan per ton, up 0.75 percentage points from the start of the year (14,879 yuan/ton) and 31.08% higher than the same period in 2009 (11,436 yuan/ton). This sharp increase in raw material costs is not matched by a corresponding rise in end-market prices, squeezing company profits. Additionally, with the Chinese economy recovering, the RMB is expected to appreciate further in 2010, which will add more pressure on export competitiveness and reduce profit margins even further. Second, international trade protectionism is on the rise. In response to the financial crisis, many countries have imposed stricter safety, hygiene, and environmental standards, along with anti-dumping and countervailing measures to protect their own industries. In 2009, under the WTO’s trade remedy framework, over 30 investigations were launched against Chinese textile products, covering items such as chemical fiber filaments, curtains, electric blankets, and various cotton and linen products. In January 2010 alone, there were 14 foreign recalls involving Chinese textiles, including 5 children's plush toys and 9 children's clothing items. Countries like the U.S., Canada, Hungary, and Turkey were involved. So far this year, more than 10 anti-dumping and countervailing cases have been filed against Chinese goods, targeting products like polypropylene, nylon filament yarns, and polyester staple fibers. Third, carbon emissions have become another tool used by Europe and the U.S. to restrict Chinese textile exports. With the Copenhagen Climate Conference drawing global attention to low-carbon economies, countries are tightening regulations on pollution and energy use. Textile and garment manufacturers, especially those involved in dyeing and printing, are facing increased compliance costs. Meanwhile, China remains at the lower end of the global carbon trading chain, with foreign markets and standards dominating the sector. Developed nations have long used technical barriers to limit Chinese exports, and CO₂ emission indicators may soon become yet another excuse for restricting textile imports. Fourth, labor shortages have become a growing concern across China. After the Spring Festival, many regions faced a severe shortage of workers, forcing companies to raise wages and relax hiring conditions. Unlike previous years, where labor shortages were mainly confined to the Pearl River and Yangtze River Deltas, they are now spreading to traditional labor-export provinces like Anhui. Many textile companies have raised salaries and reduced restrictions on gender, age, and other factors to attract workers. Industry experts suggest that while the economic recovery and increased orders are visible triggers, the real cause is the end of the era of cheap labor. Migrant workers are no longer willing to accept low wages that do not match the intensity of work, making labor shortages a national issue. For the labor-intensive textile industry, this challenge is becoming increasingly difficult to manage.