Tough central government measures to tighten credit and control illegal land use have put mainland textile firms under severe financial pressure, even though the sector was not specifically targeted as a source of economic overheating.
Beijing-based Jingwei Textile Machinery stood to lose 600 million yuan in revenues from defaulted orders this year, general manager Ye Maoxin said.
'A lot of Chinese textile firms tried to build factories or acquire land, but could not get land or financing,' Mr Ye said.
As at end-2003, Jingwei had received orders for its textile machines worth two billion yuan, but orders worth 700 million yuan failed to materialise and were not booked into last year's revenues, he said.
The company is bracing for another round of defaults this year.
Of the 1.8 billion yuan in orders, 600 million yuan probably would be dropped, Mr Ye said.
