Textile Industry Faces Many Challenges Under Heavy Pressure In 2010

As a traditional advantageous industry in China, textile industry In the first half of this year, unprecedented pressure was felt. Under the pressure of RMB appreciation expectation, labor cost rising and raw material price soaring, many enterprises' profit margin has been reduced, and even industry insiders have begun to worry that the overall competitiveness of the industry will be challenged.

　　 the labor Both scarcity and price increase

At the beginning of this year, the overwhelming lack of work reports once occupied an important position in the major media. As a representative of labor-intensive industries, the textile industry felt more direct and profound about the lack of work.

The person in charge of import and export of a home textile enterprise in Weifang, Shandong Province, told reporters that even engineers have to be caught up with the production line when they are short of work. "Not only are the workers working, but also the management personnel are working. It is normal to go on the production line and load containers when they are busy.".

It is worth noting that the lack of work not only occurs in the eastern coastal areas, but also the textile enterprise leaders in Hunan, Sichuan, Inner Mongolia and other provinces and regions have also said that the problem of labor shortage has spread to inland areas“ Almost most of the factories have production lines idle, because of the lack of work, it is difficult to drive full power, full production The person in charge of a hemp textile enterprise in Hunan said.

The problem of lack of work has not been solved completely. Instead, it is a nationwide wave of salary increase, which brings new puzzles to textile enterprises. It is understood that since this year, a total of 27 provinces, autonomous regions and cities have raised or planned to raise the minimum wage standard. The adjustment rate of Jiangsu, Zhejiang, Guangdong and other major foreign trade provinces is more than 10%, and some provinces even exceed 20%.

While recognizing this wave of wage increases, a vice president of a silk enterprise in Zhejiang also told reporters the difficulties faced by the industry today, "the pressure of wage increase in the second half of the year on the textile industry is likely to exceed the impact of exchange rate fluctuations.".

Exchange rate in the fog

In addition to labor, another topic of concern in the first half of the year is also closely related to the textile industry, which is the RMB exchange rate. 3% to 5% on average profit Space has become the consensus of the industry, even if the RMB exchange rate appreciation a little, it is very likely to make the meager profits disappear. In such worries, many textile enterprises have to be careful when receiving orders in the first half of the year.

On June 19, the central bank's decision on exchange rate reform was made public. On the basis of market supply and demand, and with reference to a basket of currencies for adjustment, the central bank stressed that the current RMB exchange rate will not fluctuate significantly, and the "big stone" hanging over textile enterprises has finally landed.

Li Yizhong, deputy general manager of Tianjin North International Group, told reporters that the exchange rate reform should learn from the lessons of the sudden appreciation of RMB in 2008. At present, the pressure of downstream clothing products export is still great, so the exchange rate fluctuation should not be too large, otherwise export enterprises can not receive long orders. He further stressed that gradual appreciation is OK, but the fluctuation should not be too big, and it is best to control it between 1 and 2 points.

Nevertheless, the reporter learned through multiple interviews that at present, the market still shows a certain degree of concern about the exchange rate trend in the second half of the year, and the uncertainty in the future makes them dare not accept long and large orders.

How high will the price of raw materials go up?

If labor factors and exchange rate fluctuations are only from domestic pressure, then the surge in raw materials is a big problem spreading to the global textile market. In the PMI of China's Manufacturing Purchasing Managers Index for June released at the beginning of July, the purchasing price index of textile industry was as high as 76.6%, and the price pressure of raw materials ranked first among all industries.

The person in charge of a textile enterprise in Nanjing, Jiangsu Province, told reporters that now we have to take cash to the factory and wait for goods every day. The price agreement signed before is totally not counted. The price given by the factory changes almost every day.

Take cotton as an example, statistics show that, from December last year, for five consecutive months, the monthly increase in cotton prices exceeded 30% year-on-year. Market participants generally expect that cotton prices will break the 20000 yuan / ton mark in the second half of the year and continue to break the highest record in 10 years.

Moreover, the prices of silk, wool and polyester also soared in the first half of the year. Among them, silk rose to the highest level in 15 years. According to the statistics of the International Monetary Fund, the price of coarse wool used for carpet is at least the highest level since 1980. Various types of textile enterprises are facing the pressure of raw material cost.

The person in charge of the Weifang enterprise in Shandong Province said that many export enterprises now have orders, but they have no profit, and some long orders may even suffer losses. "The increase in the price of finished products will never keep pace with the rising speed of the prices of raw materials."

In view of the situation of the textile industry in the first half of the year, some experts in the industry pointed out in an interview with the reporter that, as far as the domestic market is concerned, the enterprises with the ability to raise the price have already started to raise the price, but it is not the overall performance, "after all, in the domestic market, the channel and brand cost should account for the vast majority of the comprehensive cost of the textile industry". This year is bound to be a difficult year for exports, and it is likely that some orders will be shifted to lower cost places such as Southeast Asia.

In response to the concerns of industry insiders about the competitiveness of the textile industry, experts said that China's textile industry has relatively perfect industrial supporting facilities, and its comprehensive competitiveness still occupies an absolute advantage. "Other countries may be competitive in a certain link of the industrial chain, but on the whole, China's advantages are still obvious."