Textile Export Enterprises Are Faced With Heavy Pressure And Three Policy Proposals To Find A Way Out

What difficulties are facing the textile export industry? Let us take a look.

First, Quota of imported cotton Limited, China's export enterprises face higher production costs than other countries, and thus are not conducive to international competition. In terms of raw materials supply, since the implementation of the cotton purchase and storage policy in 2011, textile exporting enterprises are facing the situation of "closed raw material market and open product market", and domestic and foreign cotton prices have maintained a high price difference. This is not conducive to the competition of processing trade enterprises in the international market. Before 2013, the government gave priority support to the large scale processing trade enterprises with competitive advantages. The quota of imported cotton could guarantee 80% of cotton consumption. However, after August 2014, the NDRC began to control or even stop the cotton quotas, forcing all export enterprises to use Xinjiang cotton and real estate cotton. At present, for processing trade enterprises, the import quotas can only meet 20% of cotton consumption. Domestic cotton prices are much higher than imported cotton, making the production cost of enterprises increase significantly. Textile enterprises can not compete with textile enterprises such as India, Turkey and Pakistan in the international market.

Second, cotton inspection institutions can not strictly control the quality of cotton, and the quality of cotton has problems. There is still a big gap between the quality of cotton and the quality of imported cotton in China. The more prominent problem is the "three wire" phenomenon of domestic cotton. At present, the quality supervision, inspection and Quarantine Department of the State Council is in charge of the supervision of cotton quality in the whole country, and is responsible for organizing and implementing the Chinese fiber inspection institution. For the locality, the inspection institutions at all levels carry out cotton quality supervision and inspection work. However, the problem of fraud in cotton quality inspection is more prominent, and the inspection institutions give cotton operators a notarial inspection certificate which is higher than the actual quality. It not only causes economic losses to textile enterprises using cotton, but also makes quality of raw materials not in good condition. It has disadvantages when competing with textile products produced by other countries.

Third, Value added tax in textile enterprises "High tax and low deduction" make the enterprise's tax burden too heavy. The entry tax rate for textile enterprises to buy cotton is 13%, and the sales tax rate is 17%, because the value added tax is equal to the sales tax minus the input tax, which means that even if the enterprise has no value added, it will bear 4% of the tax burden. The "high tax and low deduction" of import and export tax has made textile enterprises bear a 4% tax rate. Before the global financial crisis, because of the higher profits of textile enterprises, the additional tax rate could be borne. Under the background that the profit margins of textile enterprises are very low, the phenomenon of "high levy and low deduction" undoubtedly causes great difficulties to the operation of enterprises.

Policy recommendations for stabilizing textile exports

First, the import quotas are mainly distributed to export enterprises so that imported cotton can be used for the production of export products by enterprises. This year, according to China's WTO accession commitments, the NDRC issued 894 thousand tons of cotton import quotas. Because imported cotton prices are significantly lower than domestic cotton, therefore, the use of imported cotton can effectively reduce the production cost of export enterprises. Textiles exported by enterprises are mainly competing in the international market, and competitors are low cost enterprises abroad. Therefore, import quotas should be applied to the production of export products. It is recommended that the quotas of the discontinued enterprises and non export enterprises be recovered, and that the import quotas are mainly distributed to the export enterprises, so that the imported cotton can be used for the production of export products. After the above policies are used to enable textile exporting enterprises to expand their exports, in order to encourage them to make more use of domestic cotton, it is possible to allocate more import quotas for enterprises that use domestic cotton to a certain scale.

Second, the quality supervision, inspection and Quarantine Department of the State Council may send a working group to the local authorities for inspection. Cotton quality Supervision and inspection of dereliction of duty. The quality supervision, inspection and Quarantine Department of the State Council shall take measures to strictly investigate the problem of dereliction of duty in cotton quality supervision and inspection. A working group was sent to investigate cotton quality supervision and inspection work. The professional fiber inspection institutions, government agencies and their staff who violate the "cotton quality supervision and management regulations" are severely punished according to the regulations.

Third, raise the cotton input tax rate, so that the textile industry input tax rate and output tax rate are consistent. At present, Shandong, Anhui, Hebei, Shaanxi and other places have begun pilot projects to carry out unified tax burden on textile enterprises. Specifically, the deduction of cotton input will be increased from 13% to 17%, so that the tax rate of input and output will be the same. This work has made textile enterprises see the hope of survival and effectively stabilize the production and export of textile enterprises, and have achieved certain results. The relevant departments should expand the scope of the pilot while summing up the experience of the pilot projects, and introducing relevant policies at the national level as soon as possible, so as to solve the problem of "high taxes and low deduction" of value-added tax in the textile industry.

Stabilizing textile exports is not contradictory to the structural transformation of China's foreign trade. The narrow sense of the textile industry refers to textile yarn, fabrics and products in customs statistics, excluding textile, clothing, shoes and hat manufacturing. It is generally believed that the textile industry is a highly polluting industry. However, it can not be generalized. In recent years, many large textile enterprises are responding to the call of the state to take the road of energy conservation and environmental protection. What is really hard to cure is that many small textile enterprises do not have the power or ability to carry out energy conservation and emission reduction. Under the background of current external demand, many large textile enterprises are facing difficulties in operation. If we can not take measures to boost the textile industry's production and export, and help enterprises tide over difficulties, enterprises can only target their survival and will lose the stamina of transformation. This is not conducive to the structural transformation of foreign trade.

Stabilizing the export of textile industry can play a stabilizing role in China's overall export. The textile industry is China's traditional dominant industry. In 2014, textile exports amounted to 688 billion 800 million yuan, accounting for 23.1% of the total export volume of labor-intensive products, accounting for 4.8% of the total export volume of that year. Moreover, textile export enterprises have solved a large number of jobs and absorbed tens of millions of people. But in recent years, due to various reasons at home and abroad, textile export growth is low or even negative growth. Textile exports increased by only 3.8% in 2014, less than 4.9% of the total export growth rate. In the first half of this year, textile exports declined by 0.7% in the context of a year-on-year increase of 0.9% in total exports. Although China's textile exports account for only 4.9% of the total exports, but if we consider the downstream industries of textile, clothing, shoes and hat manufacturing, the total exports of the two will account for 14.4% of the total export volume. Stabilizing the export of textile industry can also boost the overall export growth of the downstream industries through exports.