BEIJING, Jan 4: China’s textile industry recorded an estimated 20 per cent year-on-year increase in revenues, profits and exports in 2005, despite trade disputes and the yuan’s appreciation, state media said Wednesday.

The estimates from the China Chamber of Commerce for Import and Export of Textiles were reported by Xinhua news agency.

Sales revenue totalled two trillion yuan ($250 billion), profits were 66 billion yuan and exports reached $116 billion in 2005, the chamber said.

It attributed the growth mainly to increased investment in fixed assets and technological innovations that have raised the competitiveness of Chinese companies, Xinhua said.

China’s textile exports surged after the abolition of a global quota system on January 1, 2005 and the United States and European Union were flooded with low-cost goods.

The influx provoked a backlash, with EU and US curbs on clothing and fabric imports from China.

In September the EU had to renegotiate the terms of a deal with Beijing to limit Chinese textile imports after quotas originally agreed by the two sides in June rapidly filled, leaving millions of Chinese-made garments stranded at EU customs points.

The United States and China hammered out a deal which provides for a progressive increase in Chinese imports until 2008 but still caps their growth at far less than that in 2005. Some imports, such as cotton trousers, had surged by more than 1,000 per cent.

Contrary to the sector as a whole, profits in the chemical fiber sector of the textile industry dropped about 30 per cent due to oil price rises, the chamber said.

China revalued the yuan in July by 2.1 per cent and scrapped its peg to the dollar in favor of a basket of currencies.

The China National Textile Industry Council said Wednesday it hopes to step up exchanges with its US counterpart, which sent a delegation to visit China recently.

Various circles in the United States lack necessary understanding of China’s textile industry, said Xu Kunyuan, vice-president of the council.

China has over 19 million textile workers and the production of textile-related raw materials involves 100 million Chinese farmers, Xu said.

China’s textile export offsets US weakness in the textile industry, he said.—AFP