The Bright Spot Of China's Textile And Garment Industry In The Downturn Of April

Domestic and foreign cotton price differential since 2012

Comparison of profit contribution in each link of textile industry chain

Proportion of total industrial output value of textile industry in five eastern provinces of China

Structural change of fixed assets investment ratio in eastern, central and Western Regions

China's SME development index in recent years

The global economy has staged a "recovery - bottom recovery" circular debate since the 2008 financial crisis. In the first quarter of 2012, with the support of the world's rescue efforts again, the European debt crisis eased, the risk of the two deep recession in the global economy declined, and the optimism in the capital market rose slightly. But the global economy has been lingering on the edge of stagflation in the first quarter.

According to statistics, the US GDP annual rate increased by 2.2% in the first quarter of 2012, lower than 3% in the fourth quarter of 2011. The 27 countries in the EU and 17 countries in the euro area were initially estimated at -0.3% in the first quarter of 2012, the same as last year's fourth quarter; the growth rate of the first quarter of 2012 was 1.7%. The data show that the economic growth of the developed economies is not satisfactory, while the economic performance of developing countries has also slowed down.

In China Textile industry When domestic and foreign demand plays the bass, the weak domestic demand becomes a bright spot.

The textile industry, which has obvious competitive advantages, is facing severe challenges from the decline of external demand. According to customs statistics, China's textile and apparel exports totaled US $68 billion 800 million in 1~4 months in 2012, an increase of 0.48% over the same period last year, showing a slow growth in export prices and a shrinking market size.

Although our domestic demand market is also showing signs of fluctuating adjustment and slowing growth as a result of the slowdown in domestic economic growth and the promotion of product prices, it has finally played a weak role in actively confronting the decline of the export market, and has played an important supporting role in maintaining the positive growth of the industry scale. According to the National Bureau of statistics, in 2012 1~4, the share of domestic sales of textile industry accounted for 84.3% of sales output value, which was 1.6 percentage points higher than that of the same period last year.

In the case of sharp decline in industry profit growth, the contribution of the downstream industry chain to the development of the industry has become a highlight.

The upper reaches of cotton textile and chemical fiber, which are directly constrained by the constraints of raw material elements, have significantly reduced the contribution rate to the industry in the first quarter of this year. The development of the whole industry has contributed more to the downstream demand for textile, clothing and industrial textiles. Statistics show that in the first quarter of 2012, the profits of China's cotton spinning and chemical fiber decreased by 3.6% and 46.6% respectively, while the profit growth rate of home textiles, clothing and industrial products reached 19.8%, 11.05% and 23.58% respectively.

With the slowing growth of investment in the industry, the growth rate of many indicators in the central and western regions has become a bright spot.

The overall growth rate of the eastern region is obviously slower than that of the central and western regions, and the total structural adjustment tends to be in the central and western regions. According to statistics, in the 1~4 months of 2012, the index of investment growth, production growth, profit growth and other indicators in the central and western regions were higher than those in the eastern region, and the proportion of regional structure in the national industrial allocation continued to increase. But the meticulous carving of industrial development is precisely the eastern strategy. The eastern region has played a positive role in brand building, channel construction, overseas investment, and the layout of the whole industry chain.

Faced with the severe test of external environment, the ability of large enterprises in the industry to fight and fight has become a bright spot.

As an important monomer cell in the meso industry, the operation of enterprises in the industry has become more obvious. Under the severe external environment, large enterprises have maintained relatively stable growth momentum relying on brand strength and scientific and technological strength, while the operation of small and medium-sized enterprises is more embarrassing.

Although the signals released by the data information reflect the grim situation of China's textile industry at present, the policy trend has released the signal of "bass zone" as soon as possible. Not long ago, the China Textile Industry Federation issued the outline of "textile power" to promote the medium and long term development of the industry. The State Council also put forward 11 measures to ensure steady growth in the executive meeting held in May 23rd. It is expected that the new round of comprehensive stimulus policy will start soon, not only playing a variation of the global downturn economic trend, but also promoting the demand dynamics of China's textile industry. Recently, it is rumoured that China and Japan will implement the direct exchange of Renminbi and yen from June. If so, the yen will become the first major foreign currency to start direct trading with the renminbi other than the US dollar, which will undoubtedly help to reduce the exchange rate risk and exchange costs of Chinese and Japanese Enterprises.

External demand is weak, fatigue, domestic demand hedging

The global economic trend has been very complex since 2012, due to the obvious increase of the unstable and abrupt factors in the world economy. The developed countries are deeply troubled by debt problems and fiscal tightening. The unemployment rate is significantly higher than the average level before the crisis, and the driving force for economic recovery is obviously insufficient. The restraining effect of the tightening policy implemented by emerging market countries is further manifested, and the economic growth rate presents a general downward trend. Facing the sluggish external demand and fatigue, China's textile industry is facing a severe test of the declining international market demand. Since 2012, the pulling force of China's textile and clothing exports to the industry has obviously weakened.

At the same time, while China's domestic demand market is also troubled by domestic economic growth, product prices and other factors, China's domestic demand market shows signs of fluctuating adjustment and slowing growth. However, domestic demand consumption has finally played a weak driving force against the decline of the export market, which has played an important supporting role in maintaining the positive growth of the industry scale.

[export] the driving force for the industry has dropped significantly.

According to relevant statistics, in the first quarter of 2012, the US economic growth rate was 2.2%, the EU's economic growth rate was -0.3%, and Japan's economic growth rate was 1.7%. Economic growth is divided. The domestic consumption market of the United States, the European Union and Japan also split up. The domestic consumption demand of the United States and Japan has maintained a certain growth momentum, while the European Union shows signs of a consumption depression. In this complex external market demand environment, China's textile and garment exports not only to withstand the test of market demand, but also to meet the challenges of competitors.

According to our customs data, in 2012 1~4, China's textile and apparel exports amounted to US $68 billion 800 million, an increase of only 0.48% over the same period last year. Moreover, influenced by the buyer's declining space of product prices, the price of textile and clothing exports has been improving very slowly this year. It is estimated that in the first quarter of 2012, China's textile and clothing export prices increased by only 4%. Excluding the price factors, the actual export volume of China's textile and apparel in the first quarter showed a shrinking trend. It can be seen that the pulling force of exports to China's textile industry has declined significantly this year.

Over the years, "made in China" has a strong position in the international market. Even in the last financial turmoil in 2008, the share of textiles and clothing in the three main markets of the European Union, the United States and Japan continued to grow. But last year, China's textile and apparel imports fell in the three largest economies for the first time after the WTO entry. Since this year, our share in the international market has continued to decline.

According to the data released by the US Department of Commerce and textiles Office (OTEXA), in the first quarter of 2012, the number of textiles and clothing imported from the United States increased by 3.76% over the same period last year, while the growth rate was 0.1 percentage points lower than that of global imports, accounting for 35.6%% of total imports, representing a decrease of 4.6 percentage points over the previous year.

According to the EU statistics, in the first quarter of 2012, the EU's imports of textiles and clothing from China decreased by 8.8% compared to the same period last year, accounting for 38.6% of its total imports, representing a decrease of 1.2 percentage points over the previous year.

According to Japan's Ministry of industry data, in the first quarter of 2012, Japan's imports of textiles and clothing from China increased by 1.1% over the same period last year, the growth rate was 3.3 percentage points lower than that of global imports, accounting for 72.03% of its imports, representing a 2.9 percentage point decline compared with the previous year.

[domestic demand] continues to increase in proportion to sales and output value.

In 2012, China's economy continued to slow down on the basis of quarterly slowdown in the past year, due to uncertainties in the external environment, real estate regulation and overall tightening policies. Although China's economy has slowed down quarterly, consumption has been growing and has played an important role in stabilizing economic growth. According to China's macro research institutions, consumption contributed significantly to economic growth in 2011, from 36.8% in 2010 to 51.6%. The contribution of net exports dropped by 15 percentage points.

As far as our textile industry is concerned, domestic consumption also plays an important and weak driving force on the export market. In the first quarter of 2012, the overall sales growth of China's consumer goods market was relatively low. In the first quarter, the total retail sales of consumer goods increased by 14.8% over the same period last year, 1.5 percentage points lower than the same period last year. The sales volume of wholesale and retail enterprises above designated size is 7.3 percentage points lower than that of the same period last year, which is 15.7%, which is only 0.9 percentage points higher than that of the total retail sales of consumer goods. Among them, the growth rate of clothing retail sales is only 14.6%, which is significantly lower than the total retail sales volume of the whole society, which is lower than that of the wholesale and retail enterprises above designated size. The growth rate of retail sales of wholesale and retail enterprises is much lower than that of the same period last year. The retail sales of wholesale and retail businesses increased by 7.7 percentage points, and the growth rate was not as fast as that of the first quarter of 2009.

Meanwhile, according to the statistics of the China National Business Information Center, the retail sales of clothing commodities in major retail enterprises in the first quarter of 2012 increased by only 8.53% over the same period last year, significantly lower than the same period last year and the year-on-year level. It can be seen that in the first quarter of 2012, China's domestic market demand also showed a downward pressure on upward support.

However, compared with the export market, the domestic market still plays an important supporting role in this year. According to the National Bureau of statistics, in 2012 1~4, China's textile industry above designated size enterprises achieved 1 trillion and 375 billion 480 million yuan of domestic sales value, an increase of 14.8% over the previous year, higher than the total industry export delivery value by 12.2 percentage points, accounting for 1.6 percentage points of the total sales value of the industry compared with the same period last year, reaching 84% or more.

Upstream contribution decreases, downstream starts and extends

Under the environment of internal and external market demand adjustment and low pitch market downturn, the development of China's textile industry's upstream and downstream industries also presents an "unbalanced" performance. Directly constrained by the environmental constraints of raw material elements, the upstream industry which is dragged down -- cotton spinning and chemical fiber has significantly reduced the contribution rate to the industry in the first quarter of this year, and the development of the whole industry has contributed more to the downstream industries - the weak demand for home textiles, clothing and industrial textiles.

After the financial crisis, the industry in the rapid recovery period in 2010, has shown that the front end of the industry chain profit recovery rate faster than the industry chain terminal industry pattern characteristics. Since the beginning of this year, a new round of cyclical fluctuations has clearly emerged, showing a downward trend in upstream contribution and an extension in the downstream. According to the statistics of the National Bureau of statistics, in the first quarter of 2012, the profit growth rate of China's cotton textile industry and chemical fiber industry decreased by 3.6% and 46.6% respectively, and played a negative role in promoting the new profits of the whole industry. The profit growth rate of the textile, garment and industrial industries reached 19.8%, 11.05% and 23.58% respectively, and played a positive positive role in the new industry profits.

[upstream] internal and external cotton price difference, contusion competitiveness

In the first quarter of last year, we had discussed "the continuous rise of comprehensive costs, constantly considering the tolerance of the market", and the tolerance market space has been pushed to the limit in the first quarter of this year. The high price difference between domestic and foreign cotton has caused the domestic cotton spinning enterprises to bear the excessive raw material cost, which has seriously weakened the international competitiveness of China's cotton products, showing a serious loss of market orders, and a pattern of overall negative growth of cotton textile and clothing exports.

According to the relevant market data, as of May 24, 2012, the domestic 328 level. Cotton price Reaching 18888 yuan / ton, the international cotton 1% tariff was 13092 yuan / ton in the same period, and the domestic cotton price was higher than the international cotton price 5796 yuan / ton. In early January of this year, domestic cotton prices were higher than the international cotton price of 3014 yuan / ton. Domestic and foreign cotton prices continue to widen, constantly increasing the cost of raw material costs of domestic cotton spinning enterprises, resulting in the loss of enterprise orders. According to China Customs data, in the first quarter of 2012, the export volume of cotton yarn in China decreased by 46.8% compared with the same period last year, while the export volume of cotton fabrics decreased by 6.8%, the export of cotton bedding products decreased by 12.2%, and the export of cotton garments decreased by 1.8%. It reflects that the export situation of China's cotton textiles and garments is very severe.

In particular, China's cotton products do not have the price advantage in the international competition of the middle and low end markets. Southeast Asian countries compete with China for international market share with their raw materials and processing cost advantages. Since the beginning of this year, the export volume of textile and clothing has been shrinking. The important product is the overall decline of cotton textiles and clothing.

[downstream] outstanding achievements in home textiles and Industry

According to statistics, in the first quarter of 2012, the profit growth rate of China's textile and industrial industries reached 19.8% and 23.58% respectively, and played a very positive role in boosting the industry's new profits.

According to Taobao's data, China's household textile index has been increasing since 2012, and by May 25th, its product turnover index is higher than 140% at the end of January. Besides selling in the domestic market, the home textile industry still performs well in the export market. According to customs data, in the first quarter of 2012, China's exports of home textile products increased by 8.9% over the same period last year, much higher than the overall growth rate of China's textile and clothing exports.

The development of home textile industry benefits from the change of consumption concept, and the development of industrial industry is due to its wide application field and strong ability to resist risks. At present, the development of urbanization in China is fast, and the launch of all kinds of engineering projects has provided broad market space for industrial textiles. The demand for industrial textiles in the international market has also increased rapidly. According to customs statistics, China's export industrial textiles grew more than 30% year-on-year in the first quarter of 2012, indicating that China's export demand power of industrial textiles is high.

The East is strategizing and the west is incrementally adjusting.

At the same time, the "weft" structure of the regional distribution in the industry is also changing. The overall growth rate of the eastern region is obviously slower than that of the central and western regions, and the total structural adjustment tends to be in the central and western regions. The eastern region has played a positive role in brand building, channel construction, overseas investment, and the layout of the whole industry chain.

[Eastern] leading troops explore value-added development

The East is the cradle of the development of China's textile industry. Although in recent years, with the constraints of environment, resources and other factors, and in the growth rate of development is far worse than before, the scale of domestic industry scale structure has also declined. According to the statistics of National Bureau of statistics, the total output value of textile industry in the five provinces of eastern China increased by 10.6% in the 1~4 months of 2012, the growth rate was lower than the national growth rate by 2.5 percentage points, and the proportion decreased by 1.6 percentage points compared with the same period last year.

The eastern region is still unquestionable for the development of China's textile industry. In recent years, textile enterprises in the eastern region have been strategizing for channel construction, brand development, foreign investment, and even the whole industrial chain. Many Eastern leading enterprises have opened up a new field of value added development. In addition to transferring domestic investment to the central and western regions, offshore investment has also become the focus of their expansion of the market.

[West] continues to accelerate the pace of transfer.

Compared with the eastern part, the central and western regions are more accepting the incremental development of eastern industrial transfer. According to the statistics of National Bureau of statistics, in 2012 1~4, the investment in fixed assets of China's western and western enterprises increased by 24.5% and 24.9% respectively, significantly higher than that of the eastern region. The new investment in the central and western regions increased by 1.5 and 0.4 percentage points respectively over the previous year, and the pace of textile industry transferring to the central and western regions continued to accelerate.

In the process of undertaking the transfer, the central and western regions have also formed distinctive industrial transfer models, including the use of leading enterprises in the industry to drive the transfer; through the integration of eastern and western regions, promoting the regeneration of the industrial chain, relying on the professional market drive, attracting business investment and other ways. With the advantages of local resources, policies and environment, it has gradually developed.

Large enterprises brewing to enhance the embarrassment of small business operations

As an important monomer cell in the meso industry, there are structural changes and more obvious differentiation in the operation of enterprises in the industry. Under the severe external environment, large enterprises have maintained relatively stable growth momentum relying on brand strength and scientific and technological strength, while the operation environment of SMEs is more embarrassing.

[big business] brand strength supports steady development

The more severe the external environment is, the faster it will accelerate the birth and growth of the high-quality textile and garment enterprises with international competitiveness. Whether they are competitive in technology, management, brand or marketing, channels, etc., they will continue to rise under the test. Especially in the deteriorating export environment, it will inevitably lead to intensified competition in the domestic market, and usually this competition will mainly focus on the low-end textile and garment retail market. Only the brand textile and garment enterprises have a monopoly advantage in brand awareness and retail channels, and the competition pressure will be relatively small.

Order status of major brand enterprises in 2012

Source of data: announcement of listed companies

Small businesses face reduced orders and Underemployment

However, small businesses need to pay more hardships to cope with the challenges of external demand declining. According to the report issued by the association of small and medium enterprises in China, China's SME development index (SMEDI) in the first quarter of 2012 was 92.6, down 0.9 points from the fourth quarter of last year. Since the fourth quarter of 2010, the SME development index has fallen by more than 2 points per quarter, indicating that the development index of SMEs in China has been declining during the current economic cycle.

According to the report, 75.5% of the enterprises' orders, 75.7% of the total production of enterprises, 76.9% of enterprise sales and 79.7% of the average price of enterprise products were all down or flat compared with the same period last year. In the export oriented foreign trade enterprises, 90% of foreign enterprises' foreign orders were reduced or unchanged compared with the same period last year. It can be seen that most small businesses are facing difficulties in reducing orders and underemployment. Since the beginning of this year, the data of China's clothing wholesale market have not performed well. The apparel products have declined all over the world except a few categories. This is also a reflection of the market demand of small and medium-sized textile and garment enterprises in China.