2019 Textile Economic Operation Is Generally Stable; 2020, The Pressure Of Development Is Increasing, And The Positive Factors Remain.

In 2019, the challenges faced by China's textile industry development increased significantly. The whole industry insisted on deepening the structural reform of supply side, continuously accelerating transformation and upgrading, and striving to overcome the downside risk pressure. The overall prosperity and production situation were generally stable. However, under the multiple pressures of internal and external market demand slowing down, the trade environment becoming more complex, and the continuous increase of comprehensive costs, the growth momentum of enterprise investment is weak and the level of efficiency is declining. The main economic operation indicators are slowing down.


Industry boom and initial production are basically stable.

In 2019, the boom of the textile industry was generally in the expansion section. According to the survey data of China Textile Industry Federation, the textile industry boom index in the fourth quarter was 55.2, maintaining an expansion interval of more than 50, and rebounded in the first three quarters, reaching the highest value of the whole year's boom. According to the National Bureau of statistics, the utilization rate of textile industry (excluding chemical fiber, clothing) and chemical fiber industry in 2019 was 78.4% and 83.2%, respectively, which were higher than that of 76.6% of the whole industry in the same period. The industrial added value of Enterprises above Designated Size in the textile industry increased by 2.4% year-on-year, and the growth rate was lower than 0.5 percentage points in 2018. Industrial chain links, chemical fiber, filament and industrial sectors grew steadily, the annual industrial added value growth rate was 11.9%, 15.6% and 6.9% respectively.


Domestic and foreign markets continue to bear pressure

In 2019, the growth rate of China's textile and clothing domestic market slowed down. According to the National Bureau of statistics, in 2019, the retail sales of clothing, shoes and hats and needle textiles were 13517 billion yuan, up 2.9% over the same period last year, and the growth rate slowed down 5.1 percentage points compared with 2018. The online retail sales of apparel products increased by 15.4% over the same period last year, and maintained a good growth rate of two figures, but it slowed down 6.6 percentage points over the previous year.

The export situation of textile industry is more severe due to the weakening of external demand and the increase of trade environment risk. According to China Customs data, the total export volume of textiles and clothing in China in 2019 was 280 billion 700 million US dollars, down 1.5% from the same period last year, the growth rate was 5.3 percentage points lower than that of the previous year, but it was 0.8 percentage points higher than the three quarter of 2019. From the perspective of product mix, the export volume of textiles was 127 billion 250 million US dollars, an increase of 1.4% compared with the same period last year, and the clothing export amount was 153 billion 450 million yuan, a decrease of 3.7% compared with the same period last year. From the perspective of market structure, exports to emerging markets performed better than traditional markets. In 2019, the amount of textiles and clothing exported to countries and regions along the belt and road grew by 3.7% over the same period in 2019, while the export volume for the US, Japan and the EU decreased by 6.6%, 4.6% and 4.4% respectively.


Efficiency and investment pressure are outstanding.

In 2019, the profit pressure of textile industry increased significantly, and most of the links in the industrial chain continued to bear pressure. In the whole year, 35 thousand Textile Enterprises above Designated Size achieved operating income of 4 trillion and 943 billion 640 million yuan, down 1.5% from the same period last year, the growth rate was less than 4.4 percentage points in 2018, and realized a total profit of 225 billion 140 million yuan, a decrease of 11.6% compared with the same period last year, and the growth rate was slower than 19.6 percentage points of the previous year. In all sub sectors, the gross profit of linen textile, printing and dyeing and knitting industry has increased steadily, with a growth rate of 8.4%, 5.8% and 0.2%, respectively, which is higher than that of the whole industry by 20, 17.4 and 11.8 percentage points respectively. Over the whole year, the operating profit margin of textile enterprises above designated size was 4.6%, down 0.5 percentage points from the previous year, and the profit margin level of the terminal industry was relatively stable. The profit margins of apparel, home textiles and industrial sectors were 5.5%, 5.1% and 5% respectively. The turnover rate of finished products in the textile industry was 14.9 times / year, and the total assets turnover rate was 1.2 times / year, a slight slowdown compared with the previous year; the three fee ratio was 6.9%, slightly higher than the 0.1 percentage points of the previous year, indicating that the operation pressure of enterprises was greater.

The scale of investment in the textile industry has been reduced. In 2019, the fixed assets investment in China decreased by 5.8% over the same period last year, and the growth rate slowed down 10.8 percentage points over the previous year. In terms of industry, the investment volume of textile and chemical fiber industry decreased by 8.9% and 14.1% respectively, and the annual investment of garment industry reached 1.8% positive growth, which was 3.3 percentage points higher than that of the previous year.


Development pressure increased in 2020
But positive factors still exist.

2020 is the year of building a well off society in an all-round way and ending the "13th Five-Year" plan. The external situation faced by China's textile industry will be more complex and severe, and the prospects for development will be uncertain. From the perspective of risk factors, the complex situation of global economic turbulence sources and risk points increases, and domestic structural and cyclical problems are intertwined. The pressure of normalization, such as rising costs and intensifying competition, still exists, which puts great pressure on the smooth operation of the textile industry. The sudden outbreak of new crown pneumonia in the early part not only caused direct economic losses to textile enterprises, but also caused enterprises to face the loss of foreign trade orders and international competition for a long time after the end of the epidemic situation, which further increased the uncertainty of development. But from a positive perspective, the global economy will continue to moderate growth in general, and the long-term foundation of our macro-economy will not change. Domestic macroeconomic policies will focus more on steady growth and risk prevention, and will improve the policy environment of small and medium-sized private enterprises in a more important position. In response to the impact of the new crown pneumonia epidemic, the state has launched various supportive policies to help enterprises gradually ease the pressure of operation. The first stage economic and trade agreement between China and the United States is beneficial to improving China's foreign trade environment and market expectations and reducing the pressure of export enterprises.

In recent years, China's textile industry has been advancing on the road of building a textile power, and has achieved remarkable results in structural adjustment and transformation and upgrading, and its resilience against downside risks is growing. The textile industry will continue to adhere to the general keynote of steady progress, persist in deepening structural reforms on the supply side, actively resolve the adverse effects brought by the new crown pneumonia epidemic situation, and strive to keep the economy running at a reasonable interval, and make due contributions to ensure the smooth operation of the national economy, to win the goal of building a moderately prosperous society in an all-round way and to promote the successful completion of the "13th Five-Year plan".