South Korea'S Textile Capital Promotes Urban Pformation With Industrial Upgrading

In the early 1950s, nearly 1/4 of the textile factories in South Korea were distributed in Gyeongbuk, of which 63.8% were concentrated in Daegu.

Light textile industry has become a pillar industry supported by the government.

With the introduction of the first economic development plan from 1962 to 1966, the textile industry changed from domestic demand to export oriented, and the second economic development plans from 1967 to 1971 further identified the textile industry as "export strategic industry".

Daegu's textile industry has a solid foundation and abundant cheap labor. The government's preferential support policy has mobilized long-term accumulated commercial capital and pformed it into industrial capital, making Daegu's textile industry develop rapidly.

At that time, Simon textile market in Daegu was flourishing.

In 1968, the total number of textile wholesalers in the country was 24.4%, up to 33.7% in 1971.

In 1963, textile exports accounted for 92% of Daegu's total exports, and textile exports totaled 24 million 510 thousand US dollars in 1967, accounting for 7.9% of the total exports of the country.

With the expansion of textile factories, equipment, looms and production automation, Daegu textile industry has formed large-scale production capacity and system, and has also promoted the development of related industries.

Statistics show that in 1987, there were 295 textile dyed factories in Daegu and Gyeongbuk, of which 278 were in Daegu, accounting for 94.2%, accounting for 40.5% of the total number of dyed factories in China.

Daegu has become a large-scale new textile industry base and export base equipped with advanced equipment and technology. "Textile capital" has become a nickname of Daegu.

In 1974, just as Daegu's textile industry developed rapidly, the first international oil crisis broke out, and the textile industry's booming business suddenly cooled.

The rise in crude oil prices has led to a sharp rise in raw material prices and production costs, coupled with reduced orders in importing countries, resulting in a sharp fall in product prices, an increase in inventories and a decline in factory operating rates.

Finally, although the Daegu textile industry has accumulated the support of the boom period and the government has adopted the urgent support policy, it has passed the difficult situation, but the problems existing in the industry are exposed.

The main problems are: lack of skilled workers, low level of technology, equipment aging, lack of preparation facilities and processing and finishing facilities, scattered production scale, inadequate layout of facilities and production technology, slow labor conditions and imperfect wage system.

These problems are a potential factor hindering the sustainable development of the textile industry.

However, under the constraints of various factors, the basic countermeasures were not taken at that time. Especially after the oil crisis, the demand for polyester was suddenly rising. The result was a concern for crisis management. Instead of structural adjustment, the expansion of production and overproduction became a major threat to the development of the textile industry.

Soaring prices, sluggish exports and deficit of international payments have severely damaged Daegu's economy.

The rise of domestic wage level, the increase of raw silk prices and the depreciation of the Japanese yen have led to a decline in the competitiveness of textile prices. In particular, excess production has squeezed technological innovation and product quality improvement, and the quality competitiveness has been seriously weakened.

Before the oil crisis, a large number of products such as George's yarn were stored in the warehouse. With the cooling of the "hot yarn", the fifteen thousand Italy twisters imported to expand the production scale became a pile of scrap iron.

In 1980, only 50.3% of the enterprises normally started.

The oil crisis has depressed the textile industry in Daegu for 5 years, and further exposed the long-standing structural problems in the textile industry, namely, simply pursuing scale growth and export expansion, ignoring internal development and technological innovation, leading to the difficulty of upgrading the product structure at a low value-added price stage.

And when the later developing countries also take the low cost as the means to launch a large number of cheap products export offensive, Daegu textiles lose their competitive advantage.

The fundamental structural adjustment and structural problems of the textile industry are still being delayed and covered up.

As a matter of fact, due to the failure to adapt to the small volume, high functional and diversified demand changes in the world textile market, the structural adjustment is carried out in a timely manner. The competition is still dominated by scale. Since 1994, the textile enterprises in Daegu and Gyeongbuk have been closed down one after another, and nearly 100 enterprises have closed down in 1994 alone.