GENEVA — The liberalization of global trade in textiles and apparel helped spur economic growth and exports last year across Asia, from giants such as China to smaller players like Cambodia, a United Nations report said.
The report, “Economic and Social Survey of Asia and the Pacific, 2006,” projects a strong outlook for many countries in the regions to continue this year.
Growth in China’s large and modern textiles and apparel industry helped take up some of the slack in export growth rates caused by fewer shipments of electronics to the U.S. and the European Union, the report said. In 2005, the growth rate of China’s merchandise exports eased to 31.1 percent, compared with 35.4 percent the year before. Overall, China’s exports are estimated to have exceeded $760 billion in 2005, while its current account surplus rose by $46 billion to reach $128.5 billion.
The report forecasts China’s economy this year to grow by 8.4 percent from 9.6 percent in 2005 and inflation to inch upward to 2 percent from the previous year’s level of 1.9 percent.
U.N. economists also project India’s economy to grow by 7.9 percent, a fraction below last year’s strong 8.1 percent performance, boosted by strong consumer demand and investment. Likewise, neighboring Pakistan is estimated to grow this year by 7 percent.
The report also highlights that some smaller and poorer economies dependent on textile and apparel exports, such as Bangladesh and Cambodia, registered strong export-led growth performances. Moreover, the report said that most industry experts predict global buyers “will not risk placing all their orders with China, preferring a diversified set of suppliers.”
“Furthermore, it is unlikely that China can, or would aim to, dominate every market segment in this industry,” the report said, adding the sector is vast and there are niche segments China “may not be able to satisfy.”
In Bangladesh, for instance, exports of textiles and apparel led by knitwear last year posted double-digit growth. In 2006, economic growth in Bangladesh is forecast to grow by 6 percent, up from last year’s 5.4 percent.
The report is also bullish about Cambodia, which it expects to post an average growth of 6 percent during the period from 2006 to 2008.
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“Growth in the [Cambodian] garment industry is expected to be restrained, but recent reductions in operating costs should enable the industry to maintain its competitiveness,” the report said.
The study points out that safeguards slapped on China last year by the U.S. and EU have helped boost garment production and increased orders in Cambodia.
However, the report expects a slowdown in Vietnam’s economy to 8 percent from last year’s 8.4 percent, partly due to the impact of the Avian flu outbreak.