A Number Of Textile Industry Rescue Policies Or Launched After The Olympic Games

In July 31st, the long-awaited export tax rebate policy for textile and clothing was finally released. Although the export tax rebate was generally considered "a drop in the bucket", the winter of the textile industry was far from over.

But in the industry, the most important thing for this policy is its guiding significance.

An authoritative source said that the policy shows that policy makers have begun to take measures to support the textile industry, the future support may not be limited to export tax rebate callbacks, will be a series of measures to rescue the market.

Recently, authorities have learned from the authorities that the government can further help the textile industry out of difficulties by relaxing the scale of credit, reducing the margin, slowing down the appreciation of the renminbi and adjusting the tariff of imported textile machinery.

Credit scale increases

In fact, according to the previous China Textile Import and Export Chamber of Commerce's policy recommendations to the Ministry of Commerce, textile and clothing tax rebate rate callback is only listed as the third of the recommendations, the top 2 are to maintain policy stability and appropriate financial release.

The news that the credit scale has been widely predicted recently has also been confirmed.

The central bank has agreed to increase the credit scale of commercial banks in 2008. In view of the fact that the main banks of small business financing are mainly local financial institutions, the "differential treatment" approach is adopted to increase the 5% increase in the scale of the original commercial credit and increase 10% to the local commercial banks.

The relaxation of the capital chain has always been considered by the industry as the top priority of the textile industry.

However, in an interview, the industry questioned the positive nature of the policy: "how much money can be allocated to small and medium-sized textile enterprises?"

It is understood that as the textile industry continues to slump, commercial banks have been listed on the "blacklist".

A commercial bank official said that the research report issued by the head office in early 2008 indicated that some labour intensive export enterprises, including textile and clothing, were in a bad situation, and reminded all branches to strictly control loans for these industries.

"Rarely can we borrow money from banks now."

A small foreign trade enterprise in Dongguan, Guangdong, who is on the verge of bankruptcy, said: "in fact, if capital turnover is flexible, enterprises will not fail."

Margin ratio or downgrade

Moreover, high margin also takes up a lot of liquidity in enterprises.

Now the policy that the enterprises generally look forward to is to cancel the margin of processing trade tax, which has been levied since 2000, increasing the pressure of capital turnover.

Although it is possible to get the deposit and corresponding interest after the cancellation of the export verification, under the current tight monetary situation and the tight cash flow of enterprises, enterprises should also pay the bank deposit to the customs, and a large number of funds will be locked for half a year or even longer. As a result, a lot of enterprises engaged in processing trade must undertake private lending activities to solve urgent problems, and the indirect losses can be imagined.

According to statistics from the industry website, the total import and export volume of China's textile and garment processing trade in the first quarter of 2008 amounted to US $2 billion 900 million, of which the margin required to pay was US $260 million, equivalent to 1 billion 870 million yuan.

Insiders pointed out that the margin policy seriously affected the liquidity of the relevant enterprises.

In the first quarter of 2008, China's textile and garment enterprises paid 1 billion 870 million margin, estimated that the annual payment is expected to exceed 7 billion 400 million yuan.

An insider from the Ministry of Commerce said that the margin policy adjustment is indeed under discussion, but at present it is only in the deliberation stage, and there is no definite proposal, even though the adjustment is only a reduction in the proportion of payments.

The speed of RMB appreciation is slowing down.

Since 2008, many textile enterprises, especially small and medium-sized enterprises, have left the export industry or even closed down.

One of the main reasons for the withdrawal of some enterprises from the export industry is the continuous appreciation of the renminbi, especially in the small and medium-sized private enterprises, because of the small scale of production, the weak digestion of the cost and the decline of orders, leading to the gradual withdrawal of foreign trade.

According to customs statistics, in the first 5 months of 2008, the number of export shoes enterprises in China decreased by 1719 on the basis of 9856 in the same period in 2007, and the number of domestic enterprises decreased by 1622.

The impact of the appreciation of the renminbi on textile exports is doubling.

Statistics show that, as of now, the appreciation of the RMB against the US dollar is close to 7%, which exceeds the level of the whole year in 2007. When the speed and magnitude of the appreciation both exceed the capacity of the enterprises, the appreciation of the RMB has become an unbearable burden for textile exports.

However, the government has begun to take measures to slow down the appreciation of the renminbi moderately.

"This is the biggest positive policy. Now we can see signs of slowing down. The rate of RMB appreciation will probably continue to slow down in the second half of the year. The exchange rate adjustment will have a greater impact on the textile industry than loosening the margin, because the beneficiaries of the exchange rate adjustment are the whole industry."

Insiders say.

Zhao Yumin, director of the international marketing department of the Ministry of Commerce, also agrees with the insiders. She said in an interview, "the government may intervene in the foreign exchange market, which is conducive to economic development in the second half of the year."

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