The Manufacturing Industry Is Falling Into The Abyss. Eighty Percent Of The Enterprises In The "Textile Professional Town" Have Stopped Production

"Too much talk is all tears." The lyrics came into reality.

The Yangtze River, which has survived the economic crisis but is not sustainable this year spin The limited company has to enter the semi shutdown state. Since the beginning of August, the workers in the factory have received shift notices in succession. The largest textile enterprise in Chongqing used to be bustling and bustling, but now only the spinning machine lies quietly in the huge workshop, looking empty.

"By August, 80% of the textile enterprises had stopped production." Full name of Xu Xing, director of the Economic Development Office of Huilongba Town, a "textile town" in Chongqing. According to the survey data of this town, there are less than 100 textile enterprises in this town, which once accounted for 50% of the total production of Chongqing cloth.

On the other hand, the bad days of steel enterprises that have lost money in almost the whole industry will continue. Wang Xiaoqi, vice president of China Iron and Steel Industry Association, said recently: "Now is not the most difficult period. It is estimated that the fourth quarter or next year will be more difficult."

Data can speak, and manufacturing industry seems to be falling into a cold abyss.

According to data released by HSBC on August 23, China's HSBC manufacturing PMI preview value in August was 47.8, a new nine month low. The laggard this time was the index of new export orders, which hit a 41 month low of 44.7; The manufacturing output index fell sharply to 47.9 from 50.9 in July, the lowest in five months. In addition to these two items, each sub item also fell back to the "shrinking" and "declining" areas.

"Small and medium-sized enterprises have a hard time, and the situation of work stoppage and production suspension has intensified. The country should take some effective policies to support small and medium-sized enterprises as soon as possible." Zhou Dewen, president of Wenzhou Small and Medium Enterprises Association, who saw enterprises perform tragicomedy, cried out recently.

　　 Serious shortage of orders

The road is empty, and pedestrians are rare. Most of the doors of roadside stores are closed. The poles not far away are covered with notices of factory leasing and transfer.

People who are new to Chongqing must not think that this deserted town once produced cloth that accounted for 20% of the total output of the country and 50% of the total output of Chongqing. In 2011, there were 645 local textile enterprises still in normal production and business.

This year may be the most difficult year for Huilongba Town in more than ten years.

"There are no orders." Xu Xingquan said that although only 20% of them were used for export, Huilongba Town was seriously affected indirectly. "The export was not smooth, and many powerful enterprises invested in the domestic market, leading to a significant reduction in domestic orders."

According to local media reports, Yangzijiang Company alone will process 30 million meters of cotton yarn every month according to normal months. But since this year, the processing business of 15 million meters of cotton yarn can be received at most every month. This is also the situation of Chongqing's largest textile production enterprises. In Huilongba Town, there were 373 enterprises with an annual output value of less than 5 million yuan by last year.

The enterprises with insufficient orders, sluggish sales and no profits had to choose the way of stopping production. Enterprises that have to move to emerging markets due to the crisis in Europe and the United States are also troubled by orders.

In Hefei, a saw blade manufacturer received an order of 100000 dollars from an Indian buyer, but whether to accept the order or not became a big problem depreciation . The risk is too high due to the disadvantage of US dollar exchange and the possibility of rejection by the buyer; However, if no order is received, the enterprise may encounter problems in operation. " Mr. Zhang, the head of the factory, said.

"A large number of small and micro export enterprises are on the edge of profit and loss due to the increase in operating costs and the decline in profit margins. The problem of being unable to take orders and not daring to take orders has become increasingly prominent. The lack of confidence and ability to take orders has made business development difficult," Zhou Dewen said.

The weak demand is obviously more prominent than the production side problem. Qu Hongbin, chief economist of HSBC China and co director of economic research in the Asia Pacific region, said that the index of new orders, including domestic and foreign demand, hit a nine month low. The pressure on enterprise inventory rose, and the inventory of finished products rose to the highest point since the HSBC PMI data series in 2004.

"In August, the initial PMI fell by 1.5 percentage points month on month, the decline is only second to the 2008 financial crisis period," said Cao Shuishui of China Securities Research Center.

"Life and death line" of manufacturing industry

The accelerated contraction of the index of new orders and new export orders is only one of the problems encountered by the manufacturing industry. In fact, the continuous decline of the price index of industrial products, the acceleration of the expansion of finished product inventory and the turning from high to low operating rate are all unbearable burdens for enterprises.

In the middle of August, an investment team led by Zhou Dewen traveled from Wenzhou to Ordos to discuss investment matters with the local government. This team is composed of business owners in Wenzhou. Now that enterprises cannot expand, investment is in embarrassment, and private lending is in crisis, developing new investment has become an inevitable option. {page_break}

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"In fact, fewer and fewer people are willing to do real economy," Zhou Dewen said. Cao Shuishui said: "The economy has not yet stabilized, which is highlighted by the low demand season and the continued slowdown of external demand. The destocking is still continuing."

In this regard, Qu Hongbin believes that "manufacturing business activities are still sluggish. The policy makers should increase policy incentives, and only by promoting the recovery of infrastructure investment can we achieve the established policy goals of stable growth and employment protection."

In fact, the effect of the current frequently used monetary policy in the real economy is not obvious.

In the past week, the central bank invested 365 billion yuan in the public market through reverse repo. According to statistics, due central bank bills and positive repo in the open market totaled 33 billion yuan that week, and due reverse repo totaled 120 billion yuan. The actual net investment in the open market was 278 billion yuan, the second highest level of net investment in a single week since 2012.

　　 "The real economy sector has insufficient investment and consumption, while in the financial and factor markets, short-term bond prices have soared and commodity prices have fluctuated dramatically. The loose monetary policy can not be transmitted to the real economy sector to generate effective demand. Monetary policy has entered the era of 'liquidity trap', and further stimulation will bring huge legacy of future liquidity flooding Symptoms. " Sun Lijian, director of the Financial Research Center of Fudan University, said.

On August 22, the State Council held an executive meeting and decided to cancel and adjust 314 departmental administrative approval items. This time, we focused on the examination and approval of investment fields, social undertakings and non administrative licensing projects, especially those involving the real economy, the development of small and micro enterprises, and private investment.

"Does the Chinese government adjust its currency and finance policy It has become the only good material in the market today to further stimulate the weak economy. " Sun Lijian said.

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