Textile Enterprises Respond To The First Half Of 2009 With The Worst Imagination

"This is the worst of times. This is the best era. This is a desperate winter. It is a spring full of hope. There is nothing in front of us, everything in front of us."

　　紡企陷入前所未有困境

In 2008, eliminate some unusual months such as Spring Festival.

In 2008

Foreign demand is sluggish, and many export textile enterprises have turned their eyes to the domestic market.

Including three Xin, Jiang long holding, Jin Xiong Textile Group, five ring spandex, vertical and horizontal group and other textile leading enterprises have been shut down and close to bankruptcy, causing extreme unease in the market.

      從2007年到2008年上半年，紡織業的利潤損失主要是由匯率變化、成本上升等造成的，而9月以后，訂單減少、供過于求已取代成本上漲成為行業面臨的最主要壓力。政策扶持為企業減負為扶持身陷困境的紡織業，政府幾乎動用了包括提高出口退稅率、調整加工貿易政策、減稅、降息等所有的政策工具。

Taking the continuous reduction of the interest rate of RMB loans as an example, the textile industry will reduce interest expenses by 8 billion 127 million yuan in 2009, accounting for 7.07% of the total profits of the industry in 2008 (115 billion yuan).

Around the world

In 2009, China will carry out the VAT reform in all sectors of the country, allowing enterprises to offset the value-added tax contained in the newly purchased equipment, which will greatly ease the difficult situation of cash flow in enterprises.

At the same time, following the two consecutive increase in the export tax rebate rate in 2008, a person familiar with the matter said that at present, the Chinese government is studying the relevant adjustment policies, hoping to increase the export tax rebate rate of some textile and clothing by 1~3 percentage points again.

　　不過，政策效果充分顯現尚需要時間，更重要的是包括美國和歐盟等在內的中國主要出口市場消費需求衰退嚴重，僅靠上述“減負”措施，仍然無法有效解決企業所面臨的“無單可接”問題。以“最壞的想象”應對在金融危機寒潮下，紡織企業必須要以“最壞的想象”來應對2009年上半年的形勢。

In the face of greater pressure on the development of the industry and a sharp decline in profits, the enterprises' confidence in the latter stage is obviously insufficient and the willingness to invest has dropped to freezing point. This also directly led to a sustained and rapid fall in the fixed assets investment in 2008, basically announces the end of the high-speed expansion period of the textile industry for 10 years and the beginning of the full contraction period.

In 2009, how could the government guide the industry to maintain the right direction of industrial investment through the VAT pformation, discount loan and other policies? Moderate investment growth and encouraging enterprises to actively carry out technological pformation, energy conservation and emission reduction and industrial upgrading will become the key factors that determine the growth potential of the textile industry in the future.

The negative growth of textile exports in the first half of 2009 is a foregone conclusion. Only when the global economy recovers, will textile exports gradually become stable.

At present, the textile retail market in Europe, America and Japan has been slow-moving, inventory has been overloaded, consumers have substantially reduced their expenditure and budget on textiles and clothing, etc. the major stores have begun to sell at a discount, and many foreign businessmen dare not place large orders. This has become a direct cause of the continued downturn in China's textile exports.

If this situation is not changed in a timely manner, even if there is sufficient policy support, I am afraid it will be difficult to turn the tide.

At the same time, it is worth noting that when the quota system import of textiles and clothing is coming to an end, the EU has raised its special safeguard, which shows that the international trade protectionism policy has never really stopped.

Editor: vivi