China's textile and apparel sector is full of complaints and pessimism over market conditions; but despite this prevailing attitude, its exports are continuing to expand and are doing so at a record pace. One driver keeping the sector competitive is the exchange rate. While the Chinese yuan has appreciated 5.082 percent against the U.S. dollar over the past year, it has fallen 6.476 percent against the euro. Overall, the Chinese yuan appreciation has had a limited impact on sales.

The actual export sales numbers back this up. China's exports reached a very impressive 17.683 billion U.S. dollars in September, which was the second largest monthly export volume on record and just below the record of 18.09 billion set in August. January through September textile and apparel exports totaled 126.661 billion U.S. dollars, which reflected strong gains of 19.98 percent from a year ago. China's export growth to Europe has been one contributing factor, with shipments to Europe now 65 percent larger than those to the U.S. The yuan weakness against the euro has enabled China to be competitive against Bangladesh, Vietnam and other countries in Europe.