Analysis On Upgrading Ways Of China'S Cotton Textile Industry

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The market environment of China's cotton textile industry is close to perfect competition. The enterprises in the industry are weak in resisting risks, and can only passively accept the market price, and the industry has a high dependence on foreign trade, which is greatly influenced by macroeconomic factors, policy environment and RMB appreciation.

This paper attempts to analyze the policy environment of China's cotton textile industry, and analyzes the ways to improve the competitiveness of textile industry and improve the efficiency of industrial operation combined with the operation of various links in the textile industry.

Industry Overview

After 10 years' entry into WTO, China's textile industry has maintained a rapid development.

In 2011, textile enterprises above Designated Size realized gross industrial output value of 5 trillion and 478 billion 650 million yuan, an increase of 26.8% over the same period last year.

The total volume of textile industry continued to grow, but the growth rate dropped significantly. The growth of fixed assets investment and new projects were slow. The profit growth of the industry continued to decline, mainly due to rising labor costs, rising prices of raw materials and appreciation of the renminbi.

The high cost era of textile industry has arrived, and China's textile and garment industry, with cheap labor as its main support, has gradually lost its cost advantage.

Cotton production is unstable.

China has a long history of cotton planting. Now it is the largest cotton producing country in the world. Its annual cotton planting area is around 80 million mu, and its output is about 6 million tons.

China is also the largest cotton consumer in the world. The annual cotton consumption is about 10 million tons, and the consumption gap is about 4 million tons.

Because cotton cultivation is time-consuming and the subsidy for planting is far less than that of grain crops, although the yield is slightly higher than that of grain crops, cotton growers have low willingness to plant cotton, and their planting area has declined.

1. lack of unified planning for planting

According to geographical location, cotton cultivation in China can be divided into three main regions: the Yangtze River valley cotton region, the the Yellow River River Basin cotton region and the Xinjiang cotton region.

The output of Xinjiang cotton area accounts for 45% of the total output of the country. The cotton area of the the Yellow River River Basin accounts for 25%, and the cotton area of the Yangtze River Basin accounts for about 10%.

In addition to the scale of cotton growing in cotton growing areas of Xinjiang, other cotton planting areas are relatively scattered and lack unified planning, which are greatly influenced by price factors.

Cotton cultivation in the Yangtze River Valley and the the Yellow River River Basin depends largely on cotton growers.

From March to May each year is the cotton planting period. Because of the time consuming and time consuming than grain crops, cotton growers will not consider planting cotton if income is equal to grain crops or slightly higher than grain income.

In 2011, the state issued a tentative plan for the temporary storage and storage of cotton for the sake of stabilizing the cotton planting area. In September 1, 2011 and March 31, 2012, the cotton price was not limited to 19800 yuan per ton.

The cotton temporary storage and storage plan has played a good role in stabilizing the cotton planting area. In 2011, the cotton planting area in China showed a restorative growth.

In 2012, the state continued the cotton purchase and storage policy, while raising the storage price to 20400 yuan / ton. The market anticipate that the policy of stabilizing the cotton price by collecting and storing policies is insufficient to make up for the drop in the area caused by the decline in cotton prices.

The state's policy of cotton purchasing and storage is conducive to stabilizing cotton production, promoting healthy development of cotton textile industry, and pave the way for industrial upgrading.

2. increase in planting costs

Change chart of cotton planting cost

In recent years, the cost of planting cotton has also risen due to rising prices.

In 2010, cotton prices were higher and planting area increased, but the cost of cotton planting also increased rapidly.

In 2011, the output value of cotton was 1995.1 yuan / mu, of which the total cost was 1584 yuan / mu, and the net profit was 411 yuan / mu.

The total cost of material and service costs per mu was 585 yuan, up 39% compared to the same period last year, and the labor cost was 782 yuan, up 9% compared with the same period last year, and the cost of land was 217 yuan, up 24% over the same period.

In the physicochemical cost, the seed is 50 yuan, the fertilizer is 165 yuan, the pesticide, the agricultural film and the farm manure are 200 yuan, the machinery rental is 150 yuan, and the other 20 yuan has all increased to varying degrees.

Cotton should be trimmed every 15 days, and water should be regularly watered for a long time. If cotton farmers grow cotton, they will not be able to go out to work.

At the same time, the national policy subsidy for grain planting is obviously more than that of cotton.

At present, farmers have seed subsidies, grain subsidies and comprehensive subsidies for agricultural products. In 2011, a total of 98 yuan per mu was subsidized.

The government subsidized cotton seed less, with only 15 yuan per mu and better farmers' willingness to plant cotton than crops.

3. quality is not guaranteed.

Scattered in China

Small profit in processing and circulation

At present, China's cotton processing enterprises are numerous, but the overall strength is weak, and the ability to resist risks is poor. Once the cotton price fluctuates, the enterprises will be faced with the risk of loss.

According to the data of China fiber inspection and Quarantine Bureau, as of March 2012, there were 1710 processing enterprises participating in the cotton inspection in the 2011 cotton year. That is to say, there are at least 1700 types of 400 cotton processing enterprises in the whole country. These enterprises are mainly distributed in cotton regions such as Xinjiang, Shandong, Hebei and Hubei.

In addition, there are a large number of small cotton processing plants in China, mainly for small and medium-sized textile enterprises around the processing of seed cotton, earn a small processing costs.

The main source of profit for cotton processing enterprises is processing fees and by-products.

At present, the processing cost of the market is generally 800 yuan / ton in Xinjiang, 600 yuan / ton in the mainland, and the cost of processing electricity, wages and equipment depreciation can basically maintain the operation of the enterprise.

The price fluctuation of cotton by-products such as cottonseed and cottonseed meal has also been enlarged due to the fluctuation of the price of competing soybean oil and soybean meal. The profits of the processing enterprises are not stable.

In the past two years, due to price fluctuations, cotton processing industry has staged a scene of tragedies and comedies. When cotton prices rise, processing enterprises can not buy cotton, but when it falls, huge losses make enterprises unbearable.

Some processing enterprises choose order processing, find cotton buyers first, talk about good prices, and then start processing, avoiding certain risks. More processing enterprises choose cotton futures as a means to avoid risks, and have achieved good results.

Under the influence of many factors such as fluctuating cotton prices, long market gaps and importing cotton traders entering the domestic market, domestic cotton circulation enterprises should adjust their management concepts to meet challenges.

Combined with the national conditions, cotton processing enterprises should actively build their own channels, grasp resources through specialized cotton cooperatives in China, establish strategic alliances with downstream textile enterprises, optimize the circulation structure of cotton, and at the same time avoid the risk of price fluctuations through cotton futures to achieve stable processing profits.

Industry integration inevitable

The textile industry as part of the industrial chain to undertake raw materials and finished products, including spinning, weaving and printing and dyeing, and other links, plays a connecting role in the cotton spinning industry chain.

There is a serious overcapacity phenomenon in China's textile industry, and the operating rate in 2011 is only 75%.

It is estimated that the overcapacity rate of the whole industry in 2011 is around 20%, and the new textile projects are competing for it. Under the condition of weak demand, overcapacity is further aggravated.

At the same time, the textile industry has invested too much in the clothing industry, and the investment in home textiles and other aspects is obviously insufficient, which also limits the development space.

The cotton textile industry has been running well during the "11th Five-Year" period. The scale and efficiency have continued to grow, the industrial structure has been optimized, and the level of independent innovation and technology and equipment has been continuously improved.

However, China's textile industry has been in the low end of the global value chain for a long time. The added value of products is relatively low, and there is still a big gap between the development and design of products and developed countries, which restricts the further development of the textile industry.

The global economic weakness triggered by the financial crisis and debt crisis will continue in a certain period. The demand for textile and clothing in Europe and the United States will continue to be weak, further exacerbating the plight of China's textile industry.

Therefore, China's textile industry must change the business model of winning by quantity, improve the added value of products through independent innovation, promote the pformation and upgrading of industrial chain, and reshape China's position in the global textile value chain.

The recently released "12th Five-Year plan" of the textile industry has pointed out the development direction of the industry, that is, the industry has maintained steady growth, and the industrial structure has been further optimized. The industrial added value of textile enterprises above designated size has increased by an average annual growth rate of 8%, and the industrial added value rate has increased by 2 percentage points.

By the end of 12th Five-Year, the total export volume of the whole industry reached 300 billion US dollars, with an average annual growth of 7.5%. The proportion of fiber consumption of the three main categories of clothing, home textiles and industrial products reached 48:27:25, while further expanding the proportion of domestic sales.

Fashion industry expects innovation

The apparel industry is the end of the cotton textile industry chain. It not only realizes the supply of textile commodities, but also is an important link in the recovery of funds, the realization of product value and the guarantee of the normal operation of the industrial chain.

In recent years, the growth of domestic apparel brands has been increasing rapidly, and the cost reduction of mass production has made garment enterprises neglect product innovation.

Due to the weakness of European and American economies, the number of garments exported to the region has dropped significantly. Garment companies have to expand their market share in Africa and ASEAN, and intensify their marketing efforts in the domestic market, trying to fill the market gap through the growth of new market share.

On the whole, domestic garment enterprises are in a difficult period. The pressure of global economic weakness, labor costs rising, raw material prices fluctuating violently and RMB appreciation pressure compress industry profits. On the one hand, the garment industry digests the cost pressure from the upstream of the industrial chain, on the other hand, it also faces fierce competition from foreign clothing predators and has to think about the pformation and upgrading of the industrial chain.

The competition of industrial chain not only breaks the original production mode of clothing enterprises, but also inject new ideas.

At present, garment enterprises are also beginning to try the whole industrial chain system from raw material production to final product sales.

For example, the domestic clothing brand YOUNGOR (10.42,0.41,4.10%) not only owns the largest garment manufacturing base in China, but also enters the field of cotton cultivation, forming a complete industrial chain of raw material planting, weaving and clothing design and manufacturing. Through the integration of industrial chain, the final value of terminal products can be realized, and the core competitiveness of enterprises can be built through efficient internal management, which sets an example for domestic textile enterprises.

Industrial upgrading is imminent.

Cotton textile industry is an important pillar of China's economic development, but there are shortcomings such as insufficient investment in upstream R & D, backward technology and equipment in the middle reaches, lagging behind its own brand and marketing network. Eliminating backward production capacity and integrating industrial resources will become the key to upgrading the textile industry.

Against the backdrop of global economic weakness and RMB appreciation, in the face of competition from developing countries such as India and ASEAN, it is only through independent innovation and product differentiation to enhance the added value of products. By changing the low position of China in the global industrial chain system, creating a pformation from Chinese made to China, achieving the pformation and upgrading of the cotton textile industry is the real way out.

1. cotton production scale.

The scale of cotton production refers to expanding the scale of cotton planting through the form of professional cooperatives on the basis of existing production, popularizing the technology of cotton planting through the form of "company + farmers" and popularizing advanced cotton varieties. The areas with mature conditions can be mechanically sowing and harvested to improve the efficiency of labor.

The scale of cotton production will stabilize the area of cotton planting. It will not only dredge the channels of purchase and sale of cotton, guarantee the supply of cotton, but also use futures means to avoid price risks, enhance the ability of cotton farmers to resist risks, and ensure the income of cotton farmers.

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3. garment enterprises should increase their innovation.

Clothing enterprises are at the end of the cotton textile industry chain. They have more demand information and can pmit demand from top to bottom. At the same time, they also absorb the price pressure from the upstream of the industrial chain, which has important strategic significance for the textile industry.

Clothing enterprises should integrate industrial resources, understand market demand through active market research, create demand through new product research and development, and expand sales of products through various marketing means such as network.

The whole industry chain production mode is worth learning from, but enterprises should do their best according to their own conditions, and establishing a strategic alliance of textile industry may be more practical.

At present, China's textile industry is experiencing unprecedented difficulties, and industrial pformation and upgrading is imminent.

Ensuring the supply of raw materials, reducing price fluctuations, increasing the research and development efforts of textile enterprises, and building brand advantages have become the key to the pformation and upgrading of the textile industry.

At the same time, government departments should create a fair and fair market environment, and guide enterprises to make full use of the advantages of local industrial clusters, integrate regional supply chains, strengthen the cooperative relationship of textile industry chains, build strategic alliances of textile industry, research and research, build a wide range of benign dynamic industrial chains, and strengthen the informatization construction of textile industry chain management, so as to build a win-win textile industry chain with benefit sharing.