Insiders believe the industry might not match the record sales chalked up last year.

The State Cocoon and Silk Coordinating Office, the industry's regulator, yesterday said exports would grow by 20 percent this year.

Last year, US$2.98 billion worth of silk goods were sold abroad, a jump of 34 percent over the previous year, according to Yang Herong, vice-director of the office, which is under the State Economic and Trade Commission.

In January, the silk sector exported US$228 million worth of silk products, a rise of 22.1 percent over the same period last year, customs statistics show.

Playing down the good growth in the first month of the year, Yang said the country may not be able to sustain that momentum for the whole year.

This is partly because there may be a downturn in market demand after a two-year surge. There are also uncertainties in the global market, particularly with major importers of Chinese silk products such as the United States and Japan, according to some experts.

The export of Chinese silk goods to Japan declined by 10.9 percent in January from the same period last year, customs statistics indicate.

China produces and exports 70 percent of the world's silk, but that sector shrank in the five years up to 1999 after which the business picked up, Yang said.

Last year, the industry generated sales of 71.2 billion yuan (US$8.6 billion), jumping 22.7 percent on a year-on-year basis, according to the National Bureau of Statistics.

Yang attributed the results in part to the government's efforts to streamline production, supply and sales of silkworm eggs and cocoons, which in the past was disjointed, causing chaos in the market.

As part of its effort to intensify macro-control over the sector, Yang said the mulberry growing acreage, which now stretches to 733,000 hectares, will not expand significantly this year. Silk worms eat mulberry leaves.

But he said the country is set to move its mulberry growing area from eastern provinces, where the acreage has shrunk due to urbanization, to central and western regions, which have cheaper labour and more land available.

Growing mulberry trees will not only increase the income of farmers in such areas, but also increase the vegetation in provinces such as Hubei, Anhui, Gansu and Shaanxi, he said.

Another move to boost the silk sector has been to upgrade the industry with high and new technology.

At least 80 silk enterprises are expected to go bankrupt this year, Yang revealed.

In total, China has more than 1,000 silk enterprises, he said.

(China Daily 04/05/2001)