Universal Textiles: Look Forward To A Better Situation.

"From the second half of last year, the business condition of the company began to deteriorate, and the money earned in the first half of the year was basically lost.

The living environment is more severe this year.

Talking about the survival of the textile enterprises, Zhang Xingzhong, vice president of marketing of Binzhou Huanyu Textile Technology Co., Ltd. is rather helpless.

Huanyu textile ranks 20 in the national cotton textile industry, with an annual export volume of about US $15 million.

Zhang Xingzhong said that since 2005, the RMB exchange rate has been rising since the exchange reform in 2005. The export tax rebate rate of cotton yarn and cotton cloth has been gradually reduced to 11% from the original 17%, minus 10% of the export price increase. Without considering domestic factors, the cost of foreign trade has increased by 16%.

And this year, domestic factors such as coal, electricity and oil pportation lead to an increase of more than 20% of production cost.

Coupled with the tightening of monetary policy, the textile industry has been listed in the "no support" industry by the CBRC. The scale of credit can only be kept on the original scale. It is impossible to apply for new loans. Enterprises have to compress production, and their stock has increased from 20 days to 30 days.

"The current situation is that the order is still there, but because the bargaining power of the enterprises is not strong enough to place orders, it is good to export products that are of the nature of raw materials, and it is relatively easy to turn to the domestic market."

Zhang Xingzhong said that enterprises have also adjusted to the situation: the proportion of product exports has dropped from 50% of three years ago to 30% now. In the way of import and export settlement, enterprises have also conducted a careful study, importing cotton to choose medium and long-term letters of credit, and exporting as far as possible to choose spot cash.

Using the opportunity of RMB appreciation and increasing the quantity of imported cotton is another measure.

The annual demand for cotton is 25 thousand tons, of which 10 thousand tons of imported cotton account for 40%.

However, because of the quota management of cotton imports by the state, the 5% to 40% sliding tax is required to exceed the quota, and 60% of the imported cotton is required to pay the sliding tax. The import price of cotton in the early stage of this year is higher than the domestic cotton price of the same grade by more than 7%.

"The textile industry is a traditional dominant industry in China. It is hoped that the state will give support to the policy, cancel the cotton slip tax, release cotton imports and raise the export tax rebate rate."

Zhang Xingzhong said that there have been some hopes at present, such as a temporary reduction in the sliding rate of a certain number of high quality cotton imported from June 5, 2008 to October 5th, and an increase of 2 percentage points from August 1st on the export tax rebate rate.

"Although these measures are not in line with the expectations of the enterprises, the role may be limited, but we have released the signal of the state's policy support to the textile industry. We are now waiting for the opportunity to improve in the second half of next year."