External demand has slowed significantly, and the transformation of textile enterprises has become an inevitable way out

China’s textile industry, as a traditional labor-intensive industry that employs about 20 million workers, has just begun the pace of industrial upgrading and structural adjustment in recent years, but it has encountered drastic changes in the external environment: external demand has slowed significantly.
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Data released by the customs on October 13 showed that China’s cumulative exports of textiles and clothing from January to September 2008 increased by 8.12% year-on-year in 2007, and the export growth rate continued to slow down. Another statistical data is: from January to August 2008, the total profit of the entire textile industry only increased by 3.2%, which was a full 34.19 percentage points lower than the 37.39% in the same period in 2007.
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“Economic cycles and market-oriented competition mechanisms can promote the upgrading and transformation of textile enterprises. Transformation is the inevitable way out for an industry under globalization.” Du Yuzhou, President of the China Textile Industry Association, said on October 13 in Jinan, Shandong.
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Du Yuzhou believes that if the loan problem is effectively solved, the difficulties of a large number of textile companies can be alleviated. The key issue here is the need to deepen the reform of the current service mechanism of the financial system, which cannot be solved by simply lowering interest rates and other “loose money” measures.
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In terms of macro policy support, as a representative of the textile industry, Du Yuzhou called for the export tax rebate rate to “restore to the original 15%” and hoped that the government could strengthen social public services for small and medium-sized enterprises, including in technology, informatization, logistics, etc. Training and support.
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“As the leader of the entire industrial chain, the development of the textile industry is related to the entire employment and the interests of cotton farmers. It is difficult to say whether there will be negative growth in 2009. Further measures must be studied in terms of policy response.” Ma Zhanping, deputy director of the Economic and Trade Department of the National Development and Reform Commission The above statement was made at the 2008 International Cotton Textile High-Level Forum and said that China should strive to transform from a major textile country to a powerful textile country.
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Policy regulation: ensuring capital supply
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“Production has been suspended for four days. The factory with more than 2,000 people now only has 200 people. We are all waiting to see when the market will improve.” Yin Guangyu, general manager of Shandong Wucheng Cotton and Linen Group, said.
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This wait-and-see attitude reflects the current downturn and future uncertainty of the entire textile industry.
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Statistics from the China Cotton Information Center show that from September 2007 to August 2008, the growth rate of fixed asset investment in the textile, cotton spinning, and textile and apparel manufacturing industries fell sharply compared with the same period last year, with the textile and apparel manufacturing industry experiencing the largest decline. The growth rate dropped by 30.22 percentage points compared with the same period last year; the fixed asset investment in the cotton textile industry had the lowest growth rate this year, only 1.92%.
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The dividing point appeared in January-February 2008. After that, the growth rate of fixed asset investment in the textile, cotton spinning, and textile and apparel manufacturing industries began to be lower than the same period last year. From January to August 2008, the growth rate of fixed asset investment in the textile industry was only 11.14%, a year-on-year decrease of 23.45 percentage points.
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As a livelihood industry related to the vital interests of 40 million cotton farmers and 20 million textile workers, policy support for the textile industry is constantly being introduced.
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The first is to ensure the supply of funds. “In 2008, we should continue to play the active role of the Agricultural Development Bank in the supply of funds, rationally arrange the capital supply chain in the region, and arrange the full scale of funds.” Ma Zhanping said when explaining the regulation ideas, and at the same time encourage commercial banks, rural credit The company carries out cotton purchase credit business. He also revealed that a cotton purchase and storage policy (mainly targeting Xinjiang cotton) will be introduced in the near future to stabilize cotton prices.
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At the end of September, Wei Shiwu, deputy president of the Agricultural Development Bank, also publicly stated that he would actively organize advantageous enterprises to enter the market for acquisitions in accordance with the principle of differentiated treatment and selective support; he would also strengthen credit support, adjust the customer structure, and especially actively provide technical transformation loans to support the update of large baling machines. funding needs.
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For textile companies, financial constraints are one of the main reasons why about two-thirds of them currently face losses and bankruptcy. “The macro policy is to relax credit and lower interest rates, but there is still a long way to go before companies can get loans. What I mean is to improve the service mechanism of the entire financial system.” Du Yuzhou emphasized that policies should implement services for small and medium-sized enterprises and improve For example, institutions such as microfinance banks.
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&n#p##e#bsp; On the other hand, in order to balance the interests of the textile industry and cotton farmers in the long term, Ma Zhanping believes that financial support and subsidies for cotton farmers should be increased and a “cotton target price subsidy system” should be established. Relying on raising cotton prices to unilaterally protect the interests of cotton farmers, the current market situation makes it difficult for the textile industry to digest high cotton prices.
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At the same time, in order to alleviate the pressure of rising production costs in the domestic textile industry, the policy of sliding cotton tax will be adjusted in a timely manner. Previously, the Ministry of Finance conducted research and submitted it to the State Council for approval, and implemented a temporary sliding scale on a certain amount of cotton imported outside the quota from June 5 to October 5, 2008.According to the tax policy, the specific tax on imported high-quality cotton with higher price will be reduced from 570 yuan to 357 yuan in a timely manner.
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Structural adjustment and industrial upgrading cannot be avoided
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“A poor external situation is a good thing for the textile industry.” A person from the China Chamber of Commerce for Import and Export of Textiles pointed out that only external pressure can prompt China’s textile industry to carry out industrial transfer and upgrading to achieve structural adjustment results.
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Du Yuzhou also said that the market mechanism is the best way out. “Enterprises’ upgrading and transformation are not called for. It is in the fierce competition environment and under the pressure of economic cycle adjustment that enterprises must take the path of upgrading and transformation.”
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If external demand continues to be strong, companies will be willing to repeat simple processing tasks rather than make great efforts to carry out technological transformation and industrial upgrading, making spontaneous reform difficult to achieve. The person in charge of a large textile circulation company in Shandong Province said that before 2008, due to the good export situation and loose financial environment, many companies in Shandong Province were expanding their scale. “Now the situation is that almost 1/3 have stopped production.”
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From September 2007 to August 2008, the three investments in textile, cotton spinning, and textile and garment manufacturing in Shandong Province all showed negative growth. Among them, the fixed asset investment in the cotton textile industry fell by more than 30% year-on-year.
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The deterioration of the export environment, cost growth, financial constraints, structural adjustment and industrial upgrading are the current difficulties of the textile industry. Although the aforementioned control policies do have the intention of alleviating cost and financial problems, the deterioration of the export environment and the internal structural problems of textile enterprises clearly indicate that the problems faced by textile enterprises cannot be solved by policies.
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Most companies express the role of policy support in easing the plight of the entire industry.
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“Not only our cotton textile industry, almost all industries are undergoing adjustments in this economic cycle. Due to shrinking demand, the ‘bailout’ policy will not be of much help.” The person in charge of the above-mentioned company gave an example. Banks are bearish on the entire textile industry and regret it. The loan phenomenon is obvious.
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Du Yuzhou said that demand in the textile industry is currently a stabilizing factor, and tax reform should be carried out in terms of macro policies to facilitate the industry’s cross-regional allocation of resources. “Now the increase in tax burden is higher than the increase in sales, and there is a lot of room for reform.”
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Data shows that from January to August 2008, the contribution rate of textile domestic sales in main business income continued to expand to 78.26% compared with the previous two years, a year-on-year increase of 2.33 percentage points.
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As Zhu Lanfen, vice president of the China Cotton Textile Industry Association, said, only by being good at seizing “opportunities” in “crisis” can we survive the winter smoothly.