Chinese textile firms receive credit ratings

The China Chamber of Commerce for the Import and Export of Textiles has granted credit ratings to Chinese textile enterprise as an effort to support those in the sector amid difficult global credit conditions.

After assessment, 128 textile firms were granted the top "AAA" ratings, while another 14 received "AA" ratings. The credit ratings were recognized in the global market.

The move is "vital to speed up the establishment of a credit rating system consistent with international practices in order to reduce transaction costs and trade risk", according to Gao Hucheng, China's vice commerce minister.

China's export-oriented textile companies are suffering from low profit margins amid RMB appreciation. According to a latest industry survey by the China Textile and Apparel Council (CNTAC), profit margins averaged at 3.9% among textile companies last year. Two thirds of the companies surveyed reported an average profit margin of 0.62%.

Gao also noted that companies with good ratings will get recommendations from the chambers of commerce or trade associations and enjoy preferential policies from government regulators and financial institutions.