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

With the global economy gradually recovering and the cumulative impact of government support policies for the textile and apparel industry, China's exports in this sector are currently at a crucial stage of stabilization and recovery. However, the industry still faces several significant challenges that could hinder its growth. First, the profit margins of textile companies have been shrinking. Since 2009, as cotton yarn and cloth markets improved, domestic cotton demand has risen, leading to a steady increase in 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 rise in raw material costs contrasts sharply with the declining prices in the end market, squeezing company profits. Additionally, as the domestic economy recovers, the RMB is expected to appreciate again in 2010, further pressuring profit margins. Second, international trade protectionism is on the rise. In response to the financial crisis, many countries have implemented stricter trade barriers by raising safety, hygiene, and environmental standards, as well as using anti-dumping and countervailing measures. In 2009, under the WTO’s trade relief framework, over 30 foreign investigations were initiated against Chinese textile products, including chemical fiber filaments, curtains, electric blankets, and various cotton and linen products. In January 2010 alone, 14 cases of Chinese textile recalls were reported, involving children’s toys and clothing. Countries like the U.S., Canada, and Turkey were among those involved. So far this year, more than 10 anti-dumping and countervailing cases have been filed against Chinese textiles, targeting products such as polypropylene, nylon filament yarns, and polyester staple fibers. Third, carbon emissions have become another tool used by Europe and the U.S. to restrict China’s textile exports. Following the Copenhagen Climate Conference, the focus on a low-carbon economy has intensified, prompting stricter regulations on pollution and energy use. Textile printing and dyeing companies, which are major contributors to pollution, face increased pressure. Meanwhile, developing countries are participating in international carbon trading through mechanisms like CDM. However, China remains at the lower end of the carbon trading chain, with foreign countries controlling the market and setting the standards. Developed nations have long used technical standards to limit Chinese exports, and CO2 emission indicators may soon become another excuse to restrict textile imports. Fourth, labor shortages have become a growing concern across China. After the Spring Festival, many regions experienced a shortage of workers, forcing companies to raise wages and relax hiring criteria. Unlike previous years, the labor shortage is no longer limited to the Pearl River and Yangtze River Deltas but has also spread to traditional labor-export provinces like Anhui. Experts suggest that while economic recovery and rising orders are visible triggers, the deeper cause is the end of the era of cheap labor. Migrant workers are now less willing to accept low wages that do not match the intensity of their work. This shift has made it increasingly difficult for textile and garment companies to find enough workers, turning labor shortages into a nationwide issue.