Textile Industry Through Winter Cultivation: Innovation, Upgrading And Social Responsibility

China's textile industry has become the largest textile industrial cluster in the world. Now, China's textile industry is entering another critical period of change.

The reason for the change is from the outside. More and more small and medium-sized private enterprises are being tested. How should they survive the crisis?

Textile industry has always been a turbulent industry.

In the past six months, from the chemical fiber to weaving, printing and dyeing, the entire textile industry chain is facing unprecedented pressure.

In March 11th, the China Cotton Textile Industry Association put forward an unprecedented proposal to "smooth through 2008" at its enlarged meeting of directors.

At the end of March, the China Textile Industry Association conducted a thorough investigation of textile enterprises in 6 provinces and cities such as Jiangsu, Zhejiang and Shandong. It was found that the average profit of 2/3 in textile industry was only 0.62%, while that of the remaining 1/3 enterprises was only 6% to 10%, with an average profit of 3.9%.

According to the National Bureau of statistics, the output of domestic silk products was 943 million 365 thousand and 500 tons in May, down 3.9% from the same period last year. This is the first negative growth this year.

In the town of Shengze, Wujiang, Jiangsu, the silk fabric with "sunrise, silk, clothes and quilt" has already seen a large number of enterprises shutting down and closing down.

The media reported that the small and medium-sized enterprises that were discontinued locally accounted for 1/3 of the total number of SMEs.

The recession is mainly reflected in exports. Customs data show that the export amount of textile yarn, fabrics and products in April amounted to US $5 billion 980 million, and the export volume in May was US $5 billion 850 million, and the export volume in June was US $5 billion 648 million, basically slowing down.

In July, although it was off-season for China Textile City in Keqiao town of Shaoxing County, the Asia and the world's largest textile distribution center was still too cold.

In the Eastern market, the north market and the joint market, there are not many customers in each store.

An intuitive performance is the best combined market. In the second half of last year, the annual rent average price of a 20 square meter facade was 550 thousand, and the highest price was about 800000.

On July 14th, Gao Hucheng, Vice Minister of Commerce, said that at the appropriate time, a policy of support would be introduced to help textile industries such as export problems.

This is the first time that the government has made a statement since the recession of the textile industry.

10 years ago, the state took the textile industry as an entry point, squeezing out 10 million of the backward cotton ingots in 3 years, and distributing 1 million 200 thousand laid off workers.

Constrained by the system, the textile enterprises at that time were flooded with backward production capacity, a large number of redundant personnel reduced efficiency, and heavy historical debts also dragged the enterprises down.

The outbreak of the Asian financial crisis is even worse. There is a rare negative growth in textile exports. It is a must to compress backward production capacity and reduce staff.

It can be said that the endogenous factors of the industry contributed to the change. At that time, the biggest impact was state-owned enterprises. Because of the flexibility of the mechanism, private enterprises got broader development space.

In the past 10 years, China's textile industry has become the largest textile industrial cluster in the world, no matter the scale or the completeness of the industrial chain.

This time, the motivation for change comes from outside, and more and more small and medium-sized private enterprises are being tested.

　　多重因素疊加的困局

A survey of the textile and clothing economic management research center of Donghua University shows that external factors affecting textile enterprises are higher cost of raw materials, RMB appreciation and export tax rebate (see Figure 1).

The cost of raw materials is rising. Cotton textile enterprises, for example, can account for 65% to 70% of the cost of products.

There has been a gap between cotton production and consumption in China for a long time. Imported cotton has a price advantage over domestic cotton, so enterprises are more willing to use imported cotton.

In 2007, the total import quota of cotton was 894 thousand tons, but the actual import volume reached 2 million 460 thousand tons.

Since 2008, the price advantage of international cotton is no longer, and the price of American cotton has been higher than that of China (see chart 2).

In the case of rigid import demand, the rise of cotton prices constitutes a direct pressure on the production and operation of cotton spinning enterprises.

In addition, with the soaring international oil prices, the cost of chemical fiber enterprises has been rising. Since July 1st, the increase in electricity price per kilowatt hour has increased by 0.025 yuan, which has further increased the expenditure of enterprises.

In textile industry where energy consumption is relatively concentrated, the promotion of energy prices has hit the small and medium textile enterprises both in terms of raw materials and in direct operating costs.

On the afternoon of July 10th, at the on-site business meeting of the "service enterprise year" held by the Shaoxing county government, the heads of enterprises from various townships put forward the problems that need to be solved urgently in the process of enterprise development and construction.

For example, some printing and dyeing enterprises in Binhai Industrial Area have proposed that enterprises are very difficult to operate at this stage. If the sewage discharge fee is raised, the enterprises will be accelerated to shut down the equipment, and it is suggested that the price increase be postponed.

The self export enterprises in this area hope that the government can increase the reward for self export and subsidize 0.03 to 0.05 yuan / US dollars according to the actual export amount. The reason is that the business is difficult and the cost pressure has seriously affected the development of enterprises.

RMB appreciation in 2008, the RMB continued to appreciate, the first quarter increased by 4.17% over the end of last year, the first "breaking 7" in April 10th, the appreciation trend continues.

Textile companies are afraid to take long orders, preferring to stop production and unwilling to shoulder the losses caused by exchange rate changes.

A semi annual analysis of foreign trade situation in Shaoxing county shows that the top three exporting countries are UAE 218 million 990 thousand, Brazil 142 million 970 thousand and Mexico 134 million 340 thousand.

Exports to the US amounted to US $95 million 730 thousand, an increase of 5.2% over the same period last year, and the US has dropped from third to sixth.

Of course, the decline in US consumption caused by the subprime crisis has also led to a decline in demand for imported goods.

The export tax rebate reduction report also pointed out: "the comprehensive tax rebate rate has dropped to around 10%, and its export confidence is suppressed as a profit company, but the county's foreign trade enterprises are struggling with difficulties and seeking to advance."

In view of optimizing export commodity structure and reducing trade friction, in 2004, the textile export tax rebate rate dropped from 15% to 13%, and in 2006, it was further reduced to 11%.

In July 2007, the Ministry of Commerce jointly issued the "processing trade restriction".