Textile And Garment Industry To Increase Net Profit By 6.6 Billion Next Year

On October 21, 2008, with the approval of the State Council, the Ministry of Finance and the State Administration of Taxation issued the notice on increasing the export tax rebate rate of some commodities. From November 1, 2008, the export tax rebate rate of some textiles, clothing and toys will be increased from 13% to 14%. textile and clothing industry profit concerns recently, the textile and clothing industry is shrouded in bankruptcy or bankruptcy atmosphere. For example, Hualian Sanxin, Asia's largest PTA manufacturer, was in bankruptcy with a debt of up to 10.5 billion yuan; China's largest printing and dyeing enterprise, Jianglong holding group, was also facing bankruptcy crisis; Hejun group, one of the largest toy agents in the world, two factories (Hejun toy factory and Junling toy factory) in Zhangmutou, Dongguan, successively closed down in October. from January to August 2008, the revenue of textile enterprises above Designated Size in China was 1310.5 billion yuan, with a year-on-year increase of 16.31%; the total profit was 46.8 billion yuan, with a year-on-year increase of 12.8%. According to the observation, since 2007, the income and profit growth of the textile industry have shown a downward trend. Moreover, since May 2008, the growth rate of the industry's profit began to be lower than that of the income growth, indicating that the rising costs and other factors have eroded part of the profits. In the first eight months of 2008, the total revenue and profits of the clothing, footwear and hat industry were 523.2 billion yuan and 21.1 billion yuan respectively, with growth rates of 18.41% and 11.03% respectively. Since 2008, the growth rate of the total profit of the industry began to lag behind the growth rate of the income, and the performance was basically synchronized with that of the textile industry. we believe that the factors leading to the decline of profits in the textile and clothing industry mainly include the slowdown of global economic growth, the reduction of overall consumption and the rise of operating costs (mainly including raw materials, labor and RMB appreciation). At present, American Wall Street is experiencing a once-in-a-century financial crisis. Its depth, breadth and duration are hard to estimate, which will inevitably have a profound impact on China's exports and textile and clothing export consumption. In the first nine months of 2008, the export value of China's textile and clothing industry was 136.94 billion US dollars, an increase of 8.12% over the same period of last year, and the unit figure growth rate has been running for four consecutive months. Among them, the growth rate of textiles was 21.34%, which was relatively good, while the growth rate of clothing industry continued to decline under the influence of consumption decline caused by overseas financial crisis. In the first nine months, the export growth rate was only 1.76%, and the unit number growth rate was 6 consecutive months. As for the toy industry, it is not optimistic. In July this year, the international demand for toys fell by more than half due to the sharp decline of RMB. From January to July, there were 3507 enterprises with toy export performance in China, a decrease of 52.7% compared with the same period in 2007. The number of these enterprises is less than 15.74 million US dollars. next year, the net profit of the industry will increase by 6.6 billion the increase of export tax rebate rate will have both advantages and disadvantages. In such a bad international environment, it is estimated that the whole industry will enter into a state of loss soon. The loss of the whole industry will lead to a large number of laid-off workers, and may also cause more social problems, which is not conducive to social harmony (the number of textile and clothing shoe and hat employees reaches 6074453.00 and 4019235.00 respectively). From this perspective, the introduction of policies to save the textile and clothing industry can not wait. However, the increase rate of 1% is smaller than the proposal submitted by the textile industry association and the Ministry of Commerce (2%) in the early stage, which does not play a significant role in increasing the profits of the industry. At the same time, the increase of export tax rebate is not conducive to the elimination of uncompetitive enterprises and the upgrading of industrial structure. And in foreign trade, Chinese and foreign chambers of commerce place orders by way of price reduction, which reduces the profits of domestic export enterprises, and the industry profit still fails to get a good alleviation. Therefore, on the whole, increasing the export tax rebate by 1% again is a temporary solution to the textile and garment industry, but not a permanent cure. to increase the export tax rebate rate by 1%, it is easy to understand that 1% of the total export revenue of the enterprise will be directly increased to the total profit of the enterprise. at present, the general trade of textile and clothing accounts for 70% of the total trade. It is assumed that the annual export of textile and garment will increase by 10% in 2008 and 2% in 2009. According to the exchange rate of US dollar to RMB of 6.7, the 1% increase of export tax rebate will increase the net profit of textile and clothing by 541 million yuan in 2008 and 6.626 billion yuan in 2009.