Observation: Why Does The Spinning And Weaving Industry Become The Most Serious Epidemic Area?

Recently, there are several data worthy of attention. First, the statistics issued by the National Bureau of statistics showed that the profit of industrial enterprises in the whole country decreased by 38.3% in the first two months of 2020, and the profit of textile industry dropped by 59.3%, which was 20 percentage points lower than that of the national industrial enterprises. Two, according to customs statistics, in 2020, China exported 2 trillion and 40 billion yuan, down 15.9% compared with the same period last year, of which export textile yarns were exported. Lines, fabrics and products decreased by 19.9% compared with the same period last year, while export garments and accessories decreased by 20% compared with the same period. They all showed a "cliff type" decline. Three, in 2020 1-2, China's total imports of 4 trillion and 120 billion yuan, down 9.6% compared to the same period last year, of which the import of pure cotton grey cloth 11 million 140 thousand meters, down 33.56% over the same period, 1-2 tons of imported cotton yarn 280 thousand tons, only a reduction of 1.4% last year.

Why are spinning enterprises more vulnerable to new crown pneumonia than other industrial enterprises? The author summarizes the following reasons:

First of all, the proportion of direct exports of textile and clothing in China is large, and most of them come from developed countries such as Europe, America, Japan and Korea. According to statistics, China's textile and garment exports totaled 271 billion 867 million US dollars in 2019, down 1.85% compared to the same period last year, although the export volume of textile and clothing accounted for only 1.58% of China's total exports in 2019, but the profits generated and foreign exchange earned were significantly higher than those of other sectors. From Jiangsu, Zhejiang, Guangdong, Shandong and other places, textile and garment enterprises rely more than 50% on foreign trade export (including indirect exports such as Hong Kong and Macao), while high profit and high added value textile products rely on exports more than 60%.

Secondly, China's spinning and weaving industry still presents the characteristics of low labor intensity and automation. Since the outbreak of the new crown outbreak in late January, provinces and municipalities have launched a primary preventive response mechanism, and logistics and human flow have been greatly restricted. Although the pace of resuming work has been greatly increased since mid 2, the resumption of production is rather difficult. Most spinning and weaving enterprises still focus on orders before the Spring Festival, but the demand for labor continues to weaken. Several textile and garment factories in Jiangsu and Zhejiang have responded. At present, consumption at home and abroad has pressed the "pause button", and many textile products have become stock before they are listed.

Finally, spinning clothing enterprises have great pressure on orders and funds. At present, domestic demand for cotton yarn, grey cloth and clothing has not improved, and export losses are outstanding due to cancellation of the order (some products are on the machine) and the indefinite delay in delivery. Compared with enterprises above Designated Size, some small and medium size fabrics have suffered more impact and losses. From the survey point of view, some cotton textile enterprises that have already resumed work will have short cuts or even downtime in the short run.