Despite a number of challenges, China's textile and clothing industry is set for further growth while its competitors suffer declines as a result of cutbacks by retail buyers, according to Issue No 154 of Textile Outlook International from the global business information company Textiles Intelligence.

Although the Chinese textile industry faces rising costs, an ageing population and, in some regions, labour shortages, it looks to have done reasonably well in 2011.

During January-November, its business revenues and profits each rose by 27% while its industrial output was up by 11%, year-on-year. These figures were met with some disappointment, however, on the grounds that the profit growth rate during this period was 14.7 percentage points lower than in the first half of the year.

Several other industries in Asia also did less well in the second half of 2011 as Western retailers cut orders for the spring/summer 2012 season over fears of a slump in demand after the Christmas and holiday season.

Indian apparel exporters missed out on the chance to turn a fall in the value of the rupee into big orders. Described as "the worst performing currency in Asia", the rupee fell in value by over 15% against the US dollar between July and December 2011, which provided the industry with an improvement in its competitiveness. However, the improvement failed to manifest itself in increased sales.

Even the industry in Bangladesh -- which has enjoyed dramatic growth in investment and exports in recent years -- reported a downturn in its exports to the USA during the first four months of the country's 2011/12 financial year.

In Pakistan apparel exports are expected to fall by 30% in the whole of the 2011/12 financial year, with buying reported to be down by half in some cases.

Nervousness in the West has led buyers to make purchases close to the season and this is benefiting suppliers in close proximity to the world's two major markets -- the EU and the USA. Furthermore, Nike and Adidas have recently announced plans to increase production in South America. However, it is not their intention to replace China, and Asia in general, as a source but rather to complement it.

If there has been a shift closer to home, the evidence is far from dramatic. In the 12 months to October 31, 2011, US apparel imports from member countries of the US-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR) were up by only 2.6%. Admittedly, imports from China over the same period were down by 3.0% but this is hardly a sea change.

And looking at investment figures, it is difficult to foresee a massive switch in production any time soon. Indeed, shipments of many types of fabric machinery to Chinese mills surged to record levels in 2010, and the Chinese textile industry remained by far the largest investor.

In particular, the Chinese industry accounted for 84% of global shuttleless loom shipments in 2010 and Asia as a whole for an overwhelming 97%. In the case of circular knitting machinery, China accounted for 77% of global shipments and Asia for 92%. And in electronic flatbed knitting machinery China accounted for 74% of global shipments and Asia for 94%.

Furthermore, despite mounting pressures from rising costs, waning demand, restrained capital supplies and a shortage of funds for technological improvements, China's textile industry is expected to grow at the same rate as, or even faster than, growth in international trade during 2012.