Five Major Problems Point To The "Dead End" Of The Textile Industry.

Where is the difficulty of textile industry? Industry experts believe that from the domestic environment, summed up is nothing more than "three rates and two prices", that is, interest rates, export tax rebate rate, exchange rate and labor prices and raw material prices. In addition, there are policies for processing trade margin and cotton textile enterprises' cotton value-added tax input and output tax rates.

Exchange rate. A number of textile enterprises in Ningbo, Zhejiang, said that relative to the increase of labor costs and the reduction of export tax rebates, the continued appreciation of RMB has brought greater pressure and far-reaching impact on exports. The continued appreciation of the renminbi has become the biggest negative factor in the current export enterprises' discoloration. "The situation facing the traditional foreign trade enterprises is becoming more and more serious. If the RMB appreciates to 6.5, I think the textile enterprises will turn them off." Towel industry leader - Wang Yanping, chairman of Shandong Binzhou Yaguang towel Co., Ltd. Moreover, the space for enterprises to raise prices has reached the limit. Now the export volume is declining. Once again, the price increase will only lead to the transfer of orders to other international markets.

Export tax rebate rate. The so-called export tax rebate is mainly for general trade and non processing trade. Theoretically speaking, the reduction of export tax rebate rate will be more direct to curb excess industries, eliminate backward production capacity, reduce waste and pollution. However, as a labor-intensive industry, the profit margins of textile industry are very limited and profit margins are low.

Interest rates. Faced with inflationary pressure, monetary tightening has become a monetary policy for the overall economy. The textile industry is in a predicament. It is no longer news. Banks know this clearly, so it is very difficult for large spinning enterprises to borrow money from banks even now. "Our innovative enterprise is basically built on loans, and interest rates continue to rise. In one month, it has six or seven hundred thousand interest rates, and it is increasing every year." Hu Fusheng, chairman of the 3542 China, reluctantly said.

Labor and raw material costs have risen rapidly. In the cost of textile enterprises, the ratio of raw materials to main business costs is about 60% to 70%, and labor cost accounts for 10% to 15%. The price of raw materials in China is showing an accelerating trend in 2008. In addition, the national sales price will increase by 2.5 cents / degree in July 1st. Only the electricity price rises, the textile industry will increase the electricity consumption burden by about 3 billion 750 million yuan a year. In recent years, the cost of human resources has increased by 15% to 20% per year. The lack of operability in many parts of the new labor contract law has led to the aggravation of recruitment difficulties in textile enterprises. According to recent sampling survey by relevant departments, labor costs, raw material prices and environmental protection have increased the total cost of enterprises by 20 to 30%.