Shoe Enterprises "Breaking Ice" Need To Fill The "Surplus" Black Hole

Those companies that are unable to maintain healthy cash flow in the "deep water" need to understand that in the short term, "save themselves" and "outside" can provide little help.

I hope the government's bailout policy will be too idealistic in the short term. Interest rate cuts, loosening of the money supply, or the two increase in the export tax rebate rate will not seem to be able to reverse the bad market situation in the short term.

The fundamental problem now is that China's textile and garment footwear industry, which is hard to see the end of the global market and is "shrinking" and export oriented, has enough production to form an "excess black hole" which is hard to fill. Our problem is how to find enough large consumer market for excess clothing products.

This is not a short-term policy that can be solved.

Take the footwear industry as an example. Now, the output of footwear products produced in China has reached about ten billion pairs a year, accounting for over 60% of the world's total, which means that, regardless of age, men and women, old and young, the average annual consumption of 2-3 pairs of Chinese shoes per person per year can digest the productivity of China's footwear industry.

Considering the market protection policies that exist in various countries and economies, the "loss of place" of Chinese products in the global high-end market and the fact that they have to face competition from lower production costs, it will be a difficult task under the ideal circumstances of the global economic situation.

At present, the "shrinking" of the developed consumer market triggered by the US financial crisis, the sudden sharp reduction in the main export markets of these Chinese footwear products will inevitably lead to a large number of Chinese shoe enterprises falling into the "three no" embarrassment of no market, no profit and no cash flow.

This is irreversible, because under the new economic situation, the market has not been able to fully accommodate "made in China", and China's textile and garment footwear industry with the volume growth as the main mode of production has obviously oversupplied.

From this, how much tax reduction, interest rate reduction and part of loan support can "save" those "sudden" limited market enterprises?

To what extent will the state support China's textile and clothing industry?

And where is the fundamental direction of the government's bailout?

The optimistic industry will be more wishful thinking.

Obviously, in the short term, the government will not be able to turn the whole industry into a "rescue". There will not be enough loans to support every enterprise, and some good policies will not rescue all enterprises.

Because the sudden "limited" total capacity of the market will lead to more enterprises going out.

The elimination tournament has already begun. In the short term, the government and banks will not be able to save it.

Therefore, we can only focus on the long term.

At present, the policies promulgated by the state, such as tax relief, are built on the basis of a certain amount of business, and loans are prepared for those profitable enterprises. Taking into account the fact that a large number of textile enterprises are losing money and shrinking the market, including increasing the loan amount of small and medium-sized enterprises, it is difficult to fundamentally "benefit" the whole industry, or even, it may cause greater risks to the Chinese economy.

First of all, it is very difficult for these enterprises to get loans from banks at present.

Secondly, even if enough loans are available, in bad market conditions, these enterprises can repay money on schedule, even interest is a problem, which will lead to bad debts of banks.

Therefore, the most important problem for textile and clothing shoemaking enterprises is not a simple capital problem, but a market problem. They need large enough "emerging markets" to digest the stock left behind by the "shrinking" of the developed markets, and to gain room for growth mode pformation.

So as to avoid widespread collapse and possible instability resulting from industrial pformation in harsh environment.

In this case, more people turn their attention to the country. As a country with a population of 1 billion 300 million, they hope that domestic demand can fill this gap.

Because domestic demand is not a single enterprise or single industry can pull, they expect the government to introduce a series of "rescue the market" policy to stimulate domestic demand, and this will start a long-term process of domestic demand market.

In the past, because of the lack of internal demand in our country, besides the reasons for the lack of social accumulation, a very important reason is that there are still many imperfections in China's social security system and public service medical system. This has caused our citizens to dare to spend their money on mass consumption for a long time.

Residents earn money in the bank, and the savings rate remains high, which leads to the lack of internal demand in China.

Based on this reality and the current global economic situation, the solution to the "made in China" Dilemma and the release of internal demand may be the best choice. In this choice, the most fundamental government rescue measures that we can expect is to improve the social security system, including the improvement of medical care, pension and housing system.

This is perhaps the most appropriate rescue measure in the global market shrinkage and the pformation of China's manufacturing industry, which is conducive to the sustainable development of China's economy and the pformation of China's development mode, and is conducive to social stability and harmony.