China’s textile and apparel industry strives to survive the winter safely
Improve product added value and enhance risk resistance
Since the beginning of this year, my country’s textile and apparel export growth has continued to slow down due to factors such as slowing international demand, continued appreciation of the RMB against the US dollar, rising comprehensive factor costs, increased processing trade thresholds, and a tightening corporate financing environment. In view of the obvious decline in the export growth rate of the textile industry, the country has raised the export tax rebate rate for textiles and clothing twice consecutively this year. First, it increased the export tax rebate rate for some textiles and clothing from 11% to 13% from August 1, and then from November 1 , and then increased again to 14%.
How effective is the national export tax rebate policy? As a traditional industry in my country, how should the textile and apparel industry survive the winter?
“The reduction in the tax rebate rate allows textile and clothing export companies to breathe a sigh of relief”
“Sending help in times of need can help textile and clothing export companies breathe a sigh of relief, but it is impossible to get rid of the export dilemma all at once and it will take time.” Nian Weicheng, president of Fujian Xinhua Company, which provided non-woven gift bags for the Beijing Olympics, said that the company is currently working on It is the Christmas purchasing period, which should be a good day for export textile and clothing companies, but everyone is generally facing a decline in orders. “Export companies will suffer more pain in the next quarter.” Nian Weicheng said.
According to new statistics provided by the China Textile and Apparel Industry Association, in the first nine months of this year, my country exported a total of US$140.285 billion in textiles and clothing, a year-on-year increase of 8.03%, and the growth rate dropped by 12.14 percentage points from the same period last year. Among them, textile exports were US$53.201 billion, a year-on-year increase of 20.14%, and the growth rate was 5.01 percentage points higher than the same period last year. Clothing exports were US$87.085 billion, a year-on-year increase of 1.77%, and the growth rate was 21.18 percentage points lower than the same period last year.
If the export volume is converted into RMB income, the total national textile and apparel exports in the first nine months decreased by 0.77% year-on-year, a decrease of 16 percentage points from the same period last year. Among them, the growth rate of textile exports was 10.35%, an increase of only 4.16 percentage points compared with the same period last year; clothing exports decreased by 6.52% year-on-year, a decrease of 24.4 percentage points compared with the same period last year. The RMB settlement price of textile and apparel exports fell by 4.02% year-on-year.
Sun Huaibin, spokesperson of the China Textile and Apparel Industry Association, told reporters on the 10th that the export tax rebate rate will be raised by 3 percentage points in two phases, which will enable textile export companies to reduce losses by about 8 billion yuan during the year and be able to hedge a small amount of international trade this year. Export losses caused by weak market demand and RMB appreciation. However, the current loss ratio of the textile industry above designated size exceeds 20%, and most enterprises are facing serious difficulties. An increase in the tax refund rate by 3 percentage points can alleviate the survival pressure of enterprises, but it is difficult to reverse the overall difficulties faced by the entire industry.
“Enhancing the international competitiveness and risk resistance of China’s textiles”
Although the country’s textile and clothing exports are generally sluggish, the exports of some textile and clothing companies are growing at a high speed, which is extremely outstanding. According to Liu Shizhen, chairman of Shandong Lutai Textile Company, in the first nine months, its parent company’s export earnings alone reached US$280 million, a year-on-year increase of 25%.
“This is first of all due to the company’s strengthening of internal management and continuous technological innovation, and secondly, it is related to the good reputation established in the international market over the years.” According to Liu Shizhen, Lutai’s flagship product is pure cotton yarn-dyed fabrics. In the past few years, Lutai has been committed to developing new varieties. Its products such as pure cotton and cashmere blends, as well as pure cotton and mulberry silk, bamboo fiber, and hemp fiber blends are among the best in the world. In the face of the economic recession, although Lutai’s products are priced at a high level, because customers trust its product quality and delivery date guarantees, it can still ensure that orders are fully filled, and exports have only increased.
For an enterprise like Lu Thai with large export volume and good foundation, the increase in export tax rebate rate will have a very obvious impact on its profitability. According to estimates, the export tax rebate rate was raised twice this year, resulting in Lu Tai’s profit of US$25 million.
The relevant person in charge of the Foreign Trade Department of the Ministry of Commerce stated that under the current situation, in order to implement the spirit of the State Council Executive Meeting and maintain the steady growth of exports of labor-intensive products such as textiles, the commerce department will further strengthen dialogue and communication with relevant countries. , ensure a smooth transition and create a good external environment for my country’s textile exports. At the same time, commercial authorities at all levels will continue to provide good services and guide enterprises to transform their growth methods and adjust their product structures.
“The majority of textile export enterprises must adapt to the new situation next year as soon as possible, arrange export plans in an orderly manner for 2019, avoid blind expansion of production capacity, focus on improving product quality and added value, strive to create branded export products, and enhance the international reputation of China’s textiles competitiveness and risk resistance,” the person in charge said.
“Strive to explore new markets”
At present, the economic slowdown trend of major economies such as the United States, the European Union, and Japan is more obvious. The prices of bulk commodities such as oil and the RMB exchange rate have fluctuated greatly. It is difficult to predict international market demand and the uncertainty of the international economic environment. The increase in factors will lead to a more complex environment for my country’s textile and apparel exports.
Generally speaking, my country’s textile and apparel exports still have a competitive advantage. The weakening trend of international market demand will have a greater impact on textile exports in the next few months of this year. The growth pace of my country’s textile and apparel exports will continue to slow down, which will affect the United States and the European Union. It is difficult to change the export slowdown trend in major markets such as China and Japan.
“SpinningTextile and apparel companies must work hard to explore new markets and walk on two legs: export and domestic sales. “Sun Huaibin said.
The export volume of Jiangsu Yingyang Nonwoven Machinery Co., Ltd. has also been rising this year. The reason is that the market chosen by the company is relatively new. In order to manufacture high-quality non-woven machinery, Yingyang carries out regular technical transformation according to market demand, and timely launches new high-grade, high-quality and high-efficiency equipment that is suitable for the development trend of non-woven fabrics. “Domestically, there are not many manufacturers producing similar products, but internationally, the equipment of rival German manufacturers is very expensive, and international customers also recognize the quality of Yingyang’s products, so Yingyang not only has no shortage of orders, but also has strong bargaining power. With the improvement of product quality, the current price gap with German equipment has narrowed by 20%.” said Fan Liyuan, chairman of Yingyang.
Shandong Junfu Nonwoven Co., Ltd. has put a lot of thought into the domestic market and achieved good sales results. According to Tan Yiwu, its deputy general manager, as the establishment unit of the Shandong Provincial Nonwoven Materials Engineering Technology Research Center, Shandong Junfu has relied on its scientific and technological strength to adjust its structure since the beginning of last year. It has transformed from the past making intermediate products for use by international large companies to the past High-end products include surgical gowns that are anti-microbial, anti-alcohol, and anti-blood. Currently, the domestically produced share of this product is less than 5%, and the market prospects are very broad.
The relevant person in charge of the Consumer Goods Industry Department of the Ministry of Industry and Information Technology said that judging from the current operating situation of the textile industry and the internal and external environments it faces, the industry’s growth rate will continue to decline in the fourth quarter, but it can still maintain a certain growth throughout the year. Under the joint action of market adjustment mechanism and price adaptability, the overall situation of my country’s domestic textile and clothing market will improve.
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