Workers package face masks in the Zhejiang Kaierhai Textile Garments Co in Shaoxing of East China's Zhejiang Province. Photo: Yang Hui/GT

A textile industrial association in East China’s Shangdong Province has called for all workers in the industry to accept a 10 percent pay cut to cope with the coronavirus-stricken market.

A notice issued by Yuncheng Textile and Garment Association, calls on companies in Yuncheng county to limit their production capacity to ease their losses.

The association suggested the member companies cut workers’ salaries by no more than 10 percent and prepare the employees for the severity of the overall economic situation.

The notice comes as China’s apparel and textile industry suffered a severe setback amid the pandemic with many leading companies downsizing their business to avoid further loss.

Sanfame Group, a listed polyester maker in the industry, has decided to close a compact spinning workshop to avoid further losses, according to a filing issued on August 17.
 
The compact spinning workshop mainly produces all kinds of cotton yarn and blended yarn, as raw materials for various textiles. However due to the sluggish domestic demand and reduced export orders the company's spinning business has been greatly affected, the announcement said.

In the first half of the year revenue of the company dropped 25 percent year-on-year to 21.4 million yuan ($3.1 million), its half-year financial report revealed.

Experts predict that China’s apparel industry will see revenue loss by at least 400 billion yuan this year, and the overall market size is expected to shrink by 15 percent. 

"This year can be the most difficult year for the apparel industry since the reform and opening up," Cheng Weixiong, an apparel industry expert and general manager of Shanghai Liangqi Brand Management, told the Global Times on Wednesday. 

“The imbalance in supply and demand caused by the pandemic and impact of the China-US trade war has hit the industry hard. A strong recovery is not expected in the near future,” he said.

In the first half of 2020, textile and apparel markets in various regions experienced a sharp decline in overseas orders due to the coronavirus, according to data from the China Commercial Circulation Association of Textile and Apparel.

From January to June, 45 monitored textile and apparel professional trading markets record a total turnover of 407.933 billion yuan, a year-on-year decrease of 23.72 percent. The decrease was narrowed to 6.18 percent in the second quarter, indicating a slight rebound in the industry.

“The domestic market has shown signs of warming up however a full recovery will take at least three years,” Cheng said.