Can The Textile Industry Welcome The Policy And The Sunset Industry?

In July 10th, Fujian Financial Supervision Bureau said it would support qualified textile and footwear enterprises to accelerate the listing and financing, refinancing, and guide the listed companies to carry out merger and reorganization to promote the integration, merger and reorganization of the listed companies and the upstream and downstream enterprises.


At the same time, we should promote the role of provincial industrial equity investment funds and their sub funds, Quanzhou M & a funds and other government investment funds to support more conditional cities and districts, set up government led M & a funds, and attract famous private equity funds from both inside and outside the province to participate in the investment and financing docking of Fujian textile and footwear industry.

The news came out, the textile manufacturing sector was in turmoil, Feng Bamboo textile line closed, and Huafang shares also gained trading, and many stocks rose, such as Ruyi group, xunxing stock, Jiaxin silk and so on.

From the Financial Supervision Bureau of Fujian Province, the news of local textile enterprises or support policies will soon stimulate the situation of soaring stock prices of listed companies. The market is thinking that this is a signal of good policy to the textile industry, and may usher in a new round of policy draught in the future.


In fact, the textile industry has always been a traditional industry in China. Since joining the WTO in 2001, foreign trade has developed rapidly, and the textile export market has opened rapidly. China has officially entered the global market of textile industry, making full use of the advantages of labor and market, and gradually becoming the global textile manufacturing center.


At present, China has formed a textile industrial chain. The major textile industries in the country are mainly Shanghai, Jiangsu, Zhejiang, Jiangsu, Zhejiang and Anhui provinces, Wuhan centered Hubei and Jiangxi provinces, Chongqing centered Sichuan basin and Tianjin centered Beijing Tianjin Hebei region.


Among them, the large cotton textile cities are Shanghai, Tianjin, Shijiazhuang, Zhengzhou and Wuhan; the woolen textile cities and regions include Shanghai, Tianjin, Jiangsu, Liaoning and Qinghai; the large silk spinning cities and regions include Shanghai, Qinghai, grain, river, river, sea, and so on.


In recent years, the scale of the textile industry has continued to expand, but the growth rate has slowed down significantly. In 2017, the fixed assets investment of textile industry reached 693 billion 614 million yuan, an increase of 5.9% over the same period last year, and the growth rate dropped by 4.8 percentage points compared with 2016. In the first half of 2018, the fixed assets investment volume increased by 0.8% compared with the same period last year, and the growth rate slowed down 6.3 percentage points over the same period last year.


But textile industry added value growth rate accelerated decline. In 2017, the added value of textile industry above designated size increased by 4% compared to the same period last year, and the growth rate dropped by 1.5 percentage points. In the first half of 2018, the added value of above scale industries increased by 1.1% compared with the same period last year, and the growth rate dropped 3.4 percentage points.


Judging from the output of cloth and yarn, the output of cloth and yarn was 69 billion 560 million meters and 40 million 500 thousand tons respectively in 2017, and the output of cloth and yarn was 26 billion 720 million meters and 16 million 738 thousand tons in the first half of 2018.


At the end of 6 2018, the final value of finished product inventory of textile enterprises above Designated Size (main business income of more than 20 million) was 138 billion 450 million yuan, still at a relatively high level. In 2017, the capacity utilization rate of the textile industry was 80.2%, up 4.2 percentage points compared to the same period last year, and the utilization rate of industrial capacity increased further to 81.1% in the first half of 2018.


The textile industry seems to be developing steadily, but it is facing severe challenges. So where exactly is the pain of the textile industry?


Since the outbreak of environmental policy in 2017, all kinds of environmental policies and regulations have been concentrated in 2018. This year's environmental protection and high pressure will continue to become normal. The continuous force of environmental protection policy has a great impact on downstream products of the textile industry.


According to the news, just after entering Shantou in 2019, 183 printing and dyeing enterprises along the river have been shut down and shut down, and the reduction of printing and dyeing enterprises has also led to the rise of its cost material prices. For example, the price of scattered black ECT300% has been raised to 42 yuan /kg, or 2000 yuan / ton. Although under the policy of environmental protection, the elimination of "scattered pollution" enterprises has accelerated the transformation of the textile industry, but it has hindered the development of the traditional textile industry.


At the same time, under the influence of China's trade friction, the supply of textile raw materials has brought uncertainty. The United States is the world's largest exporter of cotton, while China is the most importing country.


For a long time, China's cotton market is in short supply, and a certain amount of cotton needs to be imported to meet the gap of demand. According to statistics, by the end of November 8, 2018, the United States signed a total of 2 million 191 thousand tons of cotton exported to 2018/19, accounting for 66.145 of the expected export volume in the year November 8, 2018, of which China signed a total of 364 thousand tons of cotton in the United States, accounting for 16.63% of the US cotton contract.


Although last year, the target price of cotton was changed from "one year" to "three years", the confidence of cotton growers was stabilized. But according to the Statistics Bureau, the area of cotton planting has dropped to 42 million 387 thousand and 800 mu in 18 years, and the ratio of cotton fell by 12.50%. Although the output of Xinjiang area has increased, it still can not make up for the lack of cotton planting area in the mainland. Moreover, cotton production in China has been decreasing year after year after 16 years.


In addition, in recent years, the rapid development of textile and garment industry in Southeast Asia has a certain impact on the domestic textile industry, according to sources. Southeast Asia's textile and garment industry is favored by more and more European and American businesses. Some orders from European and American markets have gradually shifted to Southeast Asia.


Therefore, some textile producers in China rely on mature textile technology and relatively inexpensive advantages in Southeast Asia to fight for Southeast Asian market. Domestic textile leading companies such as Lutai A, Luen Fat share, Baron East, Huafu fashion, Tianhong textile, clothing manufacturing leader Shenzhou International and hosiery leader Jian Sheng group have expanded production capacity in these areas. Some enterprises' overseas capacity accounts for nearly 40%, and is still active layout. It can be seen that the layout of textile (textile and garment) enterprises overseas (Southeast Asia and Africa) has become the trend of the times. To a certain extent, this has accelerated the decline of the textile industry.


While the textile industry is growing slowly, it is also facing the squeeze of environmental protection policy. Therefore, it seems to be more vulnerable when it competes with the Southeast Asian textile and garment industry. Perhaps this is also the reason why Fujian Financial Supervision Bureau has introduced support to promote the development of domestic textile enterprises and encourage enterprises to strengthen and enhance their competitive advantages through mergers and acquisitions.