Disadvantages Of Low Price Export: 2010: Analysis Of China'S Textile Machinery Export Trend

Data show that as of October 2010, China

Increase in production -- the success of textile machinery industry

In the first three quarters of 2010, China's textile machinery industry completed 57 billion 661 million yuan of industrial output value, up 48.58% from the same period last year, reaching the highest level in the same period of history. The industrial sales value reached 56 billion 162 million yuan, an increase of 46.17% over the same period last year, and realized a total profit of 3 billion 418 million yuan, an increase of 1.72 times compared with the same period last year, a 62.85% increase over the same period in 2007, and a 1 billion 242 million increase in exports, an increase of 44.82% over the same period last year.

The profitability of textile machinery industry has been upgraded to the best level before the financial crisis.

According to the data released by the National Bureau of statistics, Italy textile machinery orders increased by 41% in the first quarter of 2010, with orders from China increased by 110%, reaching 70 million euros, and India's growth rate reached 78%, reaching 23 million euros.

German textile machinery orders increased by 130% in the first quarter of this year, and German textile machinery sales are expected to increase by 30%~35% this year compared with 2009.

As a traditional dominant industry that occupies an important share in the total export volume of China, the export of textile machinery has increased fastest in the past five years, and the largest number of export varieties.

From the perspective of growth rate, in 2006, the first year of 11th Five-Year, exports of textile machinery exceeded US $one billion, reaching US $1 billion 237 million, more than two times the volume of US $500 million during the "fifteen" period.

In 2007, it continued to grow by more than 1 billion 500 million US dollars. In spite of the impact of the international financial crisis, the annual export volume from 2008 to 2009 dropped from 1 billion 567 million US dollars to 1 billion 211 million US dollars.

But in 2010, China's textile machinery exports rebounded again, and exports amounted to US $1 billion 396 million in just 1-10 months.

Exports are expected to exceed US $1 billion 600 million this year.

"These data reflect an astonishing increase in exports of textile machinery during the" 11th Five-Year "period," said Meng Zhe, deputy general manager of Heng Tian heavy industries.

On the other hand, during the "11th Five-Year" period, the export of textile machinery products also broke through the bottleneck of single export products, and developed towards the rich product category.

Among all export products, knitted equipment has become the top export product of the machine industry, followed by printing and dyeing equipment and spare parts, completely breaking the traditional export spinning frame as the main body.

During the "11th Five-Year" period, the most significant feature of China's textile machinery exports is no longer relying solely on cotton spinning frames alone.

There is no doubt that the pfer of global textile industry to Asia has provided huge market opportunities for China's textile machinery exports.

The establishment of economic and trade ties between China and ASEAN countries not only creates opportunities for the development of China's textile machinery industry, but also creates conditions for China's excellent textile enterprises to implement the strategy of "going global".

In January 1, 2010, China signed a free trade agreement with the ten ASEAN countries (Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei, Vietnam, Laos, Burma and Kampuchea) and set up a free trade area. Because most of these countries are large demand countries for textile machinery, establishing contacts with them has better promoted the growth of China's textile machinery spare parts exports.

On the other hand, the free trade area countries have issued a series of laws and regulations, preferential policies and risk assessment, which provide protection for investors and facilitate ASEAN countries to put forward requirements and guidelines for quality and technology of trade goods.

Gao Sheng, vice president of China Textile Industry Association, said: "more and more Chinese enterprises are investing in ASEAN factories, launching joint ventures, setting up specialized markets, setting up maintenance and training bases, etc.

For example, Tianhong Textile Group invested 350 thousand yuan in Vietnam in the past three years, and the equipment used is all cotton spinning equipment produced by the textile machinery enterprise of China's Heng Tian Group.

Moreover, with the gradual recovery of the global economy, the textile enterprises' production posture has gradually picked up and the pace of export has been accelerated.

In recent years, China's textile industry has been committed to the adjustment and upgrading of the industrial structure. The huge impact of the global financial crisis has made this adjustment and upgrading more urgent.

The rising labor costs in China also force enterprises to increase labour productivity and reduce employment through new technologies and equipment.

Therefore, even under the influence of the financial crisis, the total investment in China's cotton textile industry continued to grow in 2009, and the advanced equipment ownership rate of the industry continued to increase.

Automatic doffing long cars, blowing carding units, automatic winding machines, shuttleless looms have increased to varying degrees. "

Low price trouble -- the drawback of textile machinery industry

During the "11th Five-Year" period, although the export volume of China's textile machinery showed a rapid growth trend, but the problem that puzzled China's textile machinery enterprises for many years, the low export price has not been solved.

At one time, low price was the biggest competitive advantage of China's spinning and weaving products to seize the international market, but the market was reduced by cutting prices, which ultimately reduced the profits of the enterprises and failed to promote the healthy development of the textile machinery industry.

Cotton spinning frame is a typical case. Over the past decade, its export price has increased by 50% instead of increasing.

In the early 90s of last century, the price of our spinning frame was $more than 90 per ingot, and now it has dropped to around us $50 per spindle.

At present, the average profit rate of China's textile machinery export products is only 2%-3%, while European enterprises should reach at least 8%~15%.

The reasons for the worsening export prices are mainly due to the following aspects:

1. product homogenization competition is the main body of the vicious circle of low price sales.

Zhang Jiancheng, general manager of Qingdao Jing Jia textile machinery and Equipment Co., Ltd., said: "the meager profits formed by low price bidding directly affect the improvement of enterprise technology and the development of new products, which leads to the situation that many manufacturers fail to pass the quality of products.

According to the host enterprise, because the speed of spinning machine's technology and manufacturing level can not keep up with the development of the main engine, many accessories required by customers need to be imported, resulting in an increase in costs. At the same export price, the company has lost a lot of profits.

2. the price of raw materials such as metal materials and other textile machinery has been rising continuously in the low price of spinning machine products, breaking through the psychological defense line of machinery manufacturing enterprises again and again.

In addition, the high price of cotton also has a certain impact on the development of textile machinery industry.

Although the price of yarn has certain profit margins, the pressure will soon appear. Therefore, the utilization rate of raw materials such as the rate of noil of comber will become a decisive factor affecting the investment of textile enterprises.

How to improve - the "12th Five-Year" development proposal for textile machinery industry

The textile industry is one of the important industries in China's national economy. It plays an important role in expanding employment, increasing farmers' income, accumulating capital, earning foreign exchange through exports, prospering the market, raising the level of urbanization, promoting related industries and promoting regional economic development.

In view of the saturation situation of the domestic spinning machine market, the development of the international market was once regarded as one of the way out for the development of China's textile machinery industry.

Then, how can we further promote the development of China's textile machinery industry and enhance the international competitiveness of domestic textile machinery during the "12th Five-Year" period, so as to realize the pformation from a large textile machinery industry to a powerful textile machinery industry?

First, insist on independent innovation.

Kuang Huachun, a villager in Jiulong Town, Jiaozhou City, Shandong Province, engaged in textile machinery processing. He said: "enterprises should pay attention to the improvement of product technology and the development of new products.

Our country imports a large number of sophisticated and efficient textile machinery equipment from abroad every year, which not only wastes a lot of capital cost, but also loses the huge profit market of high-end market.

Improving the efficiency and integration of products is also the foundation for enhancing international competitiveness.

Especially after the establishment of ASEAN, China should seize the opportunities and advance steadily.

Two is to optimize the industrial regional layout.

We should give full play to the fundamental role of market allocation of resources, actively promote the gradient pfer of the textile industry, promote the convergence of the industrial chain between the eastern coastal areas and the central and western regions, and gradually form an industrial gradient pattern of East West interaction, division and cooperation, complementary advantages and coordinated development, so as to enhance the overall competitiveness of China's textile industry.

Three, we must vigorously strengthen brand building.

Ceng Ping, general manager of Qingdao Dingsheng wood machinery company, said: "we should strive to build our own brand and actively promote international operation.

In the face of economic globalization, we should make full use of the two resources and two markets, actively participate in the international division of labor, develop pnational production and operation, promote the upgrading of the industrial structure, expand the space for the development of the industry, and truly pform the "closed economy" to "open economy".

The four is to expand domestic demand and gradually adjust the proportion of domestic demand and export of textile fiber processing volume.

While satisfying the growing clothing consumption of the masses, we should pay attention to developing the consumption of household textiles and textile products with huge market potential and improve the industrial structure of small proportion of household textiles and textile products.