It is hard to say that the textile and garment industry has hit bottom, and textile companies are eager to implement the revitalization plan
In March this year, exports of the textile and garment industry, the “hardest-hit area” hit by the international financial crisis, showed signs of recovery. On April 24, the “Textile Industry Adjustment and Revitalization Plan” (hereinafter referred to as the “Plan”) was released, which was like a “shot in the arm” for the textile industry and also left room for imagination in the capital market. However, the 105th Canton Fair, which closed on May 7, clearly made people feel that the chill has not receded yet – data showed that the turnover of clothing and clothing accessories was US$1.62 billion, a year-on-year decrease of 15.2%; the turnover of textiles was US$1.61 billion, a decrease of 7.9%.
The macro environment is suddenly warm and then cold. What is the survival situation of textile enterprises at the micro level? What insights and expectations do they have for the Plan? How can the government promote the rebirth of the textile industry? A few days ago, our reporter went to Shaoxing County, a major textile county in the country, for an investigation.
1 It’s hard to tell whether the textile exports are cloudy or sunny
On May 8, the low temperature in Keqiao, Shaoxing County was only 13 degrees, and I felt refreshed in the morning; at noon, the temperature suddenly jumped to 33 degrees, and the heat was unstoppable.
The dramatic fluctuations in temperature are just like the ups and downs experienced by the textile industry, a pillar industry in Shaoxing County. Shaoxing, one of the top ten counties in the country, has an annual textile industry output value of over 100 billion yuan. It has basically formed a complete industrial chain from PTA raw materials to weaving, home textiles and clothing. It also has Asia’s largest textile distribution center – China Textile City. It is called “a city on a piece of cloth”. Starting from September last year, textile industry giants Hualian Sanxin and Jianglong Holdings ceased production one after another due to broken capital chains. Some small and medium-sized textile enterprises that were struggling to survive also closed down. Shaoxing’s textile industry was suddenly in danger.
Nowadays, the haze is gradually dissipating. On the 8th and 9th, the reporter saw in the China Textile City that the popularity of the scene had recovered. Many foreign merchants were shuttled through, bargaining with stall owners. Most of them brought translators with them, and some came in person speaking proficient Chinese. Go into battle. Statistics show that in the first quarter of this year, China Textile City’s turnover reached 15.325 billion yuan, a year-on-year increase of 5.1%, including 539 export companies with an export volume of US$250 million, a year-on-year increase of 18.2%. Data from the Shaoxing County Bureau of Statistics also show that in the first quarter, the county’s large-scale textile industry completed an industrial output value of 22.395 billion yuan. Although it fell 5.8% year-on-year, the output value in February and March increased by 2.9% and 3.6% respectively, and the growth rate rebounded. .
From May 8th to 10th, the Shaoxing Keqiao International Textile Expo, which has been regarded as the “barometer” of textile fabrics for ten years, was held as scheduled. According to data from the organizing committee, a total of 18,193 professional buyers attended the event, an increase of 50.3% over the previous session, including 2,666 overseas purchasers; the three-day transaction volume was 3.359 billion yuan, an increase of 7.7% over the previous session.
“The business volume this year has been relatively stable, with monthly sales of around US$800,000.” Shi Jianhai, general manager of Shaoxing Yongjun Textile Co., Ltd., a Textile City merchant that produces linings, told reporters that in August last year By the end of the year, affected by the international financial crisis, the company’s foreign trade orders shrank sharply to US$300,000 per month. It began to gradually pick up this year, and orders are now scheduled for two months. “However, I don’t know what the trend will be in the future.”
Just like Shi Jianhai’s feelings, the future of the textile industry is still unclear. In March this year, my country’s textile and apparel exports increased to varying degrees year-on-year and month-on-month, ending several consecutive months of negative growth, which was seen as a sign of bottoming out. But just before the Shaoxing Textile Expo from May 3rd to 7th, the transaction data of the textile and apparel category in the third phase of the Canton Fair was hardly optimistic – the transaction volume of clothing and clothing accessories was US$1.62 billion, a year-on-year decrease of 15.2%; the transaction volume of textiles was US$1.61 billion. US dollar, down 7.9% year-on-year.
A series of surveys by the China Chamber of Commerce for Textile Import and Export show that due to further price reductions by European and American merchants, corporate order volume decreased by 20%-30% year-on-year from January to February this year, and the price of orders generally dropped by more than 20%. “It’s hard to say that textile and apparel exports have hit bottom.” Wang Yu, vice president of the Textile Chamber of Commerce, said during the Canton Fair.
China’s first textile index – “Keqiao China Textile Index” shows that the textile foreign trade price index has dropped from 121.87 points in September last year to 67.68 points at the end of April this year; the foreign trade prosperity index in September last year was It dropped sharply to 902.42 points in January this year from 1877.03 points. It rebounded slightly in the following months and climbed to 1028.33 points in April.
Feedback information from many textile companies shows that although the volume of foreign trade orders is currently increasing, merchants have become extremely sensitive to prices. “European and American merchants who used to pay attention to quality have also begun to bargain. Most of their orders are for cheap lining materials of 3-4 yuan/meter. There is little interest in the high-end lining materials of 20 yuan/meter that were popular in the past.” Shi Jianhai said.
Zhang Mengbo, deputy general manager of Taiwanese company Quantum Textile Enterprise Co., Ltd., has been involved in the foreign trade industry in the Pearl River Delta for more than 20 years. This year he came to Shaoxing for the first time to discuss procurement. “What overseas customers are saying now is: ‘Can the price be more favorable?'” He told this reporter that although the Pearl River Delta has a complete textile industry chain, merchants are currently very price-sensitive, so he has to ” “Go north” to find �P> The first quarter economic operation analysis of Shaoxing Municipal Development and Reform Commission stated that according to the survey, since this year, stimulated by a series of economic stimulus plans, especially after the repositioning of the textile industry, many textile companies in Shaoxing have felt the warmth of the policy in the cold winter. The development confidence of enterprises has gradually recovered. “Due to rigid demand and counter-cyclical effects, industries such as textiles and clothing are unlikely to continue to decline sharply.”
But the report also directly states the new problems encountered by the textile industry: First, since the beginning of this year, the currencies of Asian countries such as South Korea, Singapore, Vietnam, and Japan have depreciated significantly, while the exchange rate of the RMB against the US dollar is relatively stable. Therefore, in fact, the RMB In a state of appreciation, the cost advantage of products is constantly weakening; secondly, in order to safeguard the interests of their own companies, countries such as the United States and India are constantly increasing import thresholds, trade protectionism has risen, and trade frictions have become more frequent. “Therefore, under the impact of multiple adverse factors, the export situation is not optimistic.”
3 Follow-up policies need to be “implemented”
Has the difficult moment for the textile industry passed?
More optimistic investment bank reports judge that the fourth quarter of last year and January and February of this year “may be the dark days of this round of adjustment.” It is expected that starting from the end of this year or the beginning of 2010, with the gradual recovery of the internal and external real economy, Industry prosperity is expected to gradually rise from the bottom. However, the analysis of more investment banks shows that the “Plan” does not have many substantial benefits, the international financial crisis is still ongoing, and the prospects of the textile industry are still unclear.
Textile enterprises’ interpretation of the “Plan” is more microscopic and realistic. The intuitive statement of “continue to increase the export tax rebate rate for textiles and clothing” naturally cannot escape their eyes. According to estimates, for every 1 percentage point increase in export tax rebates, China’s textile industry can increase profits by more than 5 billion yuan. But in fact, there is currently only 1 percentage point of room for tax rate increase – since August 1, 2019, the Ministry of Finance and the State Administration of Taxation have increased the export tax rebate rate for textiles and clothing four times in a row, from 11% to 16%. %, while the upper limit of export tax rebate is 17%.
Although we also look forward to the improvement of the “last point”, the feeling of textile enterprises is actually not strong. “Just raising one point each time is already numb and the effect is not obvious.” Shi Jianhai said that even if the tax rate is raised, foreign businessmen will lower prices accordingly, and profits will not increase much. “It just increases the bargaining space with foreign businessmen. What we are concerned about is, what specific policies will be implemented?”
” The subsequent policies are worth looking forward to.”
Textile Network Editor-in-Chief Wang Qianjin also believes that the benefits of the revitalization plan will not be immediate, and further implementation of the policy will take 3-6 months.
Compared with specific policies, Sun Ruizhe is more concerned about the four directional adjustments involved in the “Plan”: First, the business model needs to change, such as the textile market in central cities should change from wholesale to retail, and develop e-commerce platforms; second, It is the adjustment of the industrial structure, including product structure and regional structure. For example, the proportion of industrial fiber consumption should be increased from the current 15% to 19%, and the layout should be transferred from the coast to the central and western regions; the third is the improvement of public services, and the construction of small and medium-sized enterprises and functional A complete public service platform, etc.; the fourth is the fulfillment of corporate social responsibilities, such as paying attention to environmental protection, improving labor relations, etc.
In the context of the ongoing financial crisis and reduced foreign demand, “further expanding domestic consumption” is also an important part of the “Plan”, but the transformation from “external to internal” is not a smooth road. “The export business is good, with high profits, and the business is relatively stable. The domestic demand market is not mature enough. Switching from export sales to domestic sales to compete for the market again, the competition is fierce.” Fu Guangwei, deputy director of the China Textile Information Center, said that this is what many companies are unwilling to do. The reason for switching to domestic sales.
Shi Jianhai, who is engaged in export sales, said frankly that he is unwilling to switch to domestic sales. “Domestic sales require setting up points in the country, which is costly. Moreover, there is widespread arrears in the upstream and downstream of the domestic sales model, and the risks are relatively high.” He said that since the end of last year, some foreign trade companies have switched to domestic sales, which has intensified the relationship between domestic sales companies. With competition, industry profits have become thinner.
For large companies, the market “turn” is a natural move. Zhejiang Tiansheng Holding Group Co., Ltd., a leading local company, focused on market adjustments last September, and its foreign trade share has dropped from the original 60% to the current 30%. “Although competition in domestic sales is fierce, the consumer market has huge potential,” said Zhang Guowei, vice chairman of the company. (China Securities Network)
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