Driven By Internal Factors, The Domestic Cotton Textile Industry Will Have A Major Adjustment.

History is doomed to repeat itself. Lengthening the time span and reviewing the development of textile industry in the past thirty years is actually a bumpy and tortuous development history. Although the reasons are complex, the main reason is the interaction between policy and external market. Under the temporary stagnation of Sino US economic and trade consultations, the domestic textile enterprises are once again standing on the crossroads, in the "silent eruption or in silence". Is the future fate of textile enterprises still in their hands?

Taking history as a mirror is for better progress. In the past thirty years of development, the first great change occurred in the 90s of last century, when the storm came fiercely. In November 3, 1992, the Chongqing intermediate people's court formally declared that the bankruptcy of the Chongqing general knitting factory marked the deepening of the reform of the merger and reorganization of state-owned enterprises. In 1996, the national bankruptcy pilot cities expanded to 56, reaching 111 cities in 1997, and the bankruptcy work in 2000 was basically pushed away.

The historical traffic flow is rolling forward. In the tide of the merger of state-owned enterprises, textile enterprises began to appear as the leading role. At the beginning of 1998, the State Council issued the notice of the State Council on deepening the reform of textile industry and adjusting the structure to solve the problems related to the work of turning losses into account. The reform target was put forward formally: from 1998 onwards, 3 years or so should be used to eliminate and eliminate 10 million spindles of backward cotton ingots, and 1 million 200 thousand workers should be shunted and laid off. By 2000, the whole industry will be able to turn losses into profits. The government's ingots plan was completed in batches. In 1998, the eastern coastal areas basically completed the compression and elimination of 4 million 800 thousand spindles of backward cotton ingots, shunted 600 thousand laid-off workers and reduced the loss by 3 billion yuan. In 1999, other regions basically completed the compression and elimination of backward cotton ingots and 5 million 200 thousand spindles. In 2000, the task of compressing and eliminating backward cotton ingots and shunting laid-off workers was completed in 2000.

The current wave of mergers is a strategic reorganization of state-owned enterprises in the process of establishing and improving the socialist market economic system through the flow and reorganization of stock assets. It can be said that the internal cause of this major reform is the key, more of which is the revolution of state-owned enterprises, and the reform is unprecedented.

After more than ten years of reform pains, the textile industry has gradually formed a new pattern of "national retreat and democratic progress". According to the data released by relevant media, the number of state-owned enterprises in the textile industry decreased from 1754 in 2003 to 1175 in 2008, while the number of textile enterprises above Designated Size in the country soared from 14863 in 2003 to 33133 in 2008, an increase of more than 100%. The background of this period is China's accession to WTO at the end of 2001, and the export of labor intensive textile industry has become the main force of China's exports. If we did not enter WTO and embrace such a broad market, I'm afraid the expansion of private textile enterprises will not be so big and fast.

Of course, with the rise and fall of textile enterprises, cotton prices are constantly writing "waltz" up and down. Along with the wave of mergers and acquisitions, the downstream consumption has dropped significantly, and cotton prices have dropped. We can see from the graph that cotton consumption has begun to decline gradually after 92 years, which is closely related to the merger and reorganization of enterprises. Despite the lack of systematic and professional price data to support time, the supply of excess demand will inevitably lead to a fall in cotton prices from the perspective of equilibrium theory.

Of course, after the transformation of the Phoenix Nirvana, the Chinese textile industry began to soar and sing all the way in 2000. Under the premise of steady increase in cotton production, consumption has seen explosive growth, and cotton prices have opened a long period of slow bull market.

After the rapid development, China's textile enterprises are facing second major tests, but they are different from their own lives in the 90s of last century. This is the external factor that plays a key role. In the face of the United States constantly brandishing tariff rods and limit pressure, spinning enterprises are in a predicament. In the past few years, the media has also exposed the events of "collapse and rush tide" of textile enterprises, but at most is the debt crisis caused by capital breakdowns. After all, this is only a regional partial problem. It is the relationship between points and lines, not a facet problem, which has a limited impact on the whole industry chain. This time, the United States threatened to increase tariffs on China's $about 500000000000 product, which is comprehensive and huge for Chinese enterprises, especially for textile enterprises. As experts say, Sino US economic and trade cooperation is the cornerstone of the steady development of the two countries' economy, which is also important to China and to the US side.

According to customs statistics, in 2018, China imported and exported 4 trillion and 180 billion yuan to the United States, of which 3 trillion and 160 billion yuan was exported to the United States and 1 trillion and 20 billion yuan from the United States. In 2018, the total value of China's foreign trade imports and exports was 30 trillion and 510 billion yuan, that is to say, the total trade volume between China and the United States accounts for 13.7% of the total volume of China's import and export trade. The importance of trade between the two countries is self-evident.

Because of this, under the influence of mutual tariff between China and the United States, Chinese and American enterprises are under tremendous pressure, and domestic textile enterprises are more difficult. After all, the United States is the largest market of textile and garment export in China.

" Under the nest, there is no egg. From the south to the north, from upstream to downstream, from the old textile base to the new gathering area, the textile enterprises are experiencing the biggest difficulty since the 90s of last century. The spinning enterprises that have experienced great storms must meet the storm again. It is understood that at present, the main textile gathering areas in China have stopped production, and the number of discontinued enterprises has continued to increase. Under the condition that cotton prices continue to fall, there is no improvement. The sales of downstream cotton yarn are blocked, and the products are constantly exhausted. For the spinning enterprises which are already tight capital, they add a "tighter hoop", and the pressure of survival is bigger and bigger.

More than that, China's textile and apparel market share in the world is being eaten up by other countries. At the twenty-ninth China East import and export forum held in March this year, Cao Jiachang, President of the China Textiles Import and Export Chamber of Commerce, said that although China's textile and garment exports continued to grow, its growth rate slowed down, making China's share of the international market slightly down. In the first 11 months of 2018, China's textile and apparel products accounted for 36% of the US import market, 0.4 percentage points lower than the same period in 2017, while Vietnam's share was 10.6%, an increase of 0.2 percentage points over the same period last year. Last year, I accounted for 33% of the EU's import market share, 1 percentage points lower than the same period last year, while Bangladesh's share was 14.3%, an increase of 0.6 percentage points over the same period last year. The import market share was 58%, a decrease of 3 percentage points compared with that of the previous year, while Vietnam's share was 12.6%, an increase of 1.4 percentage points over the same period last year.

Last year textile data was unsatisfactory, and this year is facing greater downward pressure. On the morning of June 10th, the General Administration of Customs announced the import and export of foreign trade in the first 5 months of this year. Data show that in the first five months, the United States was the third largest trading partner of China, and the total trade value of China and the United States decreased by 1 trillion and 420 billion yuan, down 9.6%, accounting for 11.7% of China's foreign trade value, of which 1 trillion and 90 billion yuan was exported to the United States, with a decrease of 3.2%, and imports from the United States decreased by 25.7% yuan. Look at the export of electromechanical and labor-intensive products, of which textiles, furniture, footwear, plastic products, bags and toys grew by an average of 13.2%, with only 0.2% of clothing down. Clothing is most unsatisfactory in labor-intensive export industry, and its substitution is obviously enhanced. Of course, the data at this time is that the US has not yet announced and implemented a tariff increase of the remaining $325 billion. If it is to be implemented, the export data to the US may be a cliff type fall.

In this round of Sino US economic and trade frictions against the background, cotton prices began to fall as scheduled, and Zheng cotton's main contract fell to 13000 yuan / ton to temporarily stop the decline. It is hard to imagine that cotton prices will perform well during the great shock period of cotton spinning industry. Therefore, in the short term, and even for a long period of time, it is very difficult for cotton prices to improve, especially to return to normal orbit.

Sino US trade friction is a long-term process, and in this process will continue to appear repeatedly, this is a general consensus. Against this background, the external driving force has already made efforts, and the number of spin off enterprises has gradually increased, and downstream consumption has been suppressed for a long time. Survival of the fittest, survival of the fittest, textile enterprises will usher in a critical transition period, the industry will usher in a great change. In the future, cotton prices may be bottomed out for a long time. Unless there are problems at the end of supply, enterprises should be prepared for a protracted war.

If fate is in front of you, it's leftovers. You have to eat it as a feast. Once we have this mindset, any difficulties will not stop the pace of enterprise development.