Garment Industry Should Deal With RMB Appreciation

For the textile and footwear industry in Guangdong, the first half of the 08 years is a half year of internal and external difficulties.

Under the influence of continuous appreciation of RMB, the implementation of new labor contract law, the price rise of raw materials, the suppression of export trade and the difficulty of recruiting workers, all the three major factors driving the development of the industry "exports, investment and domestic consumption" all slowed down.

In only half a year, 220 small garment enterprises in Guangdong have gone bankrupt.

The head of a clothing and textile enterprise calculated accounts to reporters. In the factors leading to reduced profits, RMB appreciation accounted for about 50%, labor cost increased by about 30%, and finally energy and raw material prices accounted for 20%.

The head of the company even further indicated that by the end of this year, the textile industry estimated that 30% of the enterprises would be closed.

Yes, the appreciation of RMB is the biggest blow to China's textile and garment industry with high dependence on foreign trade.

However, according to Guangzhou customs statistics, in 2008 1~5, the export of clothing and accessories was 40 billion 90 million US dollars, compared with the same period in 2007 (the same below) increased by 9.3%, and the growth slowed down.

Among them, Guangdong exported 8 billion 620 million US dollars, down 21.8%. In addition to January and March growth, the remaining 3 months showed a drop of more than 20%, especially in May, exports of 2 billion 480 million US dollars, a sharp decline of 30.6%.

The question arises: why is the national clothing export growing while Guangdong is falling?

According to Yu Yang, a human resource expert at the clothing industry recruitment website (www.fuzhuanghr.com), the rapid appreciation of the RMB in 2008 made the cost advantages of the garment processing enterprises in Guangdong basically lose. In addition, the implementation of the new labor contract law in January 1st, and the soaring cost of personnel brought by the high prices, had a great impact on the labor-intensive Guangdong clothing enterprises. Some of the simpler orders had already been pferred to Southeast Asia or China's Midwest, so that some enterprises could be closed or pferred for lack of profit.

Yu Yang also pointed out that Guangdong garment enterprises must undergo a painful structural adjustment period, starting from production and processing oriented to brand processing and trade type, and gradually establish their own original brand.

The key lies in whether enterprises can train and train excellent talents, so that enterprises can successfully pass the key stages of pforming business philosophy, increasing cooperation with foreign countries, introducing new and high technology, and building terminal market.

Yes, the second half of the textile and footwear industry will remain in a period of painful adjustment.

The peripheral market environment that will affect the development of the industry will not be significantly improved. The trend of the continued appreciation of the RMB is unlikely to change. The export environment of the industry is even more severe than that of the first half.

In July, the Guangdong Provincial Department of labor and Social Security announced that Guangdong will implement the "wage doubling plan" from this year, and establish a sound mechanism for the normal growth of wages of enterprises.

Starting in 2008, the wages of the whole province increased by more than 14% a year, and by 2012, it was quadrupled than the 2000 level of wages, so that workers could enjoy the fruits of economic development.

(Nanfang Daily July 10th)

The government's decision is undoubtedly correct and well intentioned.

For the working people, it is also a joyful exultation.

But for the textile and garment enterprises at this moment, if it is really implemented, it will undoubtedly be worse.

Many business executives said, "the survival of enterprises has become a problem, how to raise wages?"

If enterprises are asked to raise wages, the only way to deal with them is to reduce staff members.

The key problem now is to support enterprises and survive the crisis.

In the environment of continued appreciation of RMB and rising labor costs, it will further aggravate the survival of the fittest in Guangdong's textile and garment enterprises.

Remember the Wenchuan earthquake in Sichuan, the girl who was only 22 years old?

After being buried in the ruins for more than 60 hours, they were finally discovered by rescuers. They saw a pair of eyes full of hope, calm and strong. When she was rescued by rescuers, her words were so confident: "I am glad that I am still alive.

When I heard a voice, I cried for help; without a voice, I would rest and save my strength.

Thirsty, hungry, I will endure, you help me, I am very grateful to you! "

Instead of being rescued by the rescuers, she was able to control her life in her own hands.

Similarly, for Guangdong's clothing practitioners, if we regard this survival crisis as an "earthquake", how should we face it?

Liu Liu Hui should be an example for us. We should write our legend on our own wisdom and efforts instead of waiting for outside support alone.

It is gratifying to note that when the reporter visited the head of T100 fashion trend network, the budget for clothing enterprises to invest in clothing design information this year has been greatly improved than that of last year. Besides the well-known brands such as YISHION, Semir, Metersbonwe and so on, many two or three line brands also continue to attach importance to the design.

Some bosses even took the initiative to ask for the first-hand information on "brand planning" in Europe and America, so as to cultivate corporate brand planning talents.

Thus, clothing enterprises have gradually begun to focus on independent original brand, to brand processing and trade type pformation.