China’s pollution crackdown impacts textiles

The Chinese government’s push to clean up the environment by inspecting and closing non-compliant factories across the country has had minimal impact on apparel and textile imports…….so far

It would seem that the inspection teams led by ministerial-level officials have been focusing on the most polluting industries including metal, coatings and plastic. It is understood that some dying vendors have also been subject to inspection with some suffering impacts.

Spurred on by the anger of citizens enshrouded in smog China’s leaders have committed to take strong action on pollution.

Their political will coincides with an economic need to rein in surplus production after years of over-investment.

How and when that capacity gets replaced will be a key factor in the economy’s performance beyond 2017.Factory_in_China

This unprecedented campaign against environmental pollution has led to 80,000 companies being punished across the country since last summer and more plant shutdowns are expected, with the fourth round of inspections, which began last month, to complete coverage of mainland China’s 31 provincial-level regions.

While there are reports that some apparel factories have been affected, it doesn’t appear to be in any way widespread and there has been no significant impact. There is no evidence that any particular factories have been closed down.

Analysts believe that those most at risk will be some dyeing factories and some finishing factories because they struggle to control the associated pollution and – because some factories will be closed – the good factories may need more time to finish orders.

If the situation persists it is likely that these ‘good’ factories will increase prices, though it is unlikely that this will have a profound impact.

Environmental protection has become a key performance indicator for officials in recent years, as the central government tries to address acute pollution caused by decades of unchecked economic growth that has increasingly fueled social discontent and resentment.