In 2011, China’s textile industry’s output value, profit, and investment growth rate slowed down, and the export growth rate was even close to zero, reflecting the serious problems faced by textile companies such as raw material price fluctuations, increased production costs, and weak international demand. It is expected that the internal and external environments faced by the textile industry this year will remain very complicated, and the textile industry will accelerate the transformation and upgrading in the market.
Last year, all growth indicators in the textile industry rose across the board, but the growth rate declined.
At the 7th Annual Meeting of China Textile Round Table held recently, Wang Tiankai, president of the China National Textile and Apparel Federation, stated that the operational risks faced by the textile industry increased significantly over the previous year, and the decline in the growth rate of industry efficiency was particularly prominent. Business operations encounter major difficulties. “The tight external environment has formed a market force mechanism. It is expected that the textile industry will usher in a new round of industry reshuffle in 2012.â€
status quo--
Output value, profit growth slowed down, and the growth rate of export volume was close to zero. Last year, the growth rate of textile production continued to slow down. From January to November last year, a total of 36,000 textile enterprises above designated size achieved a total industrial output value of 4,952.64 billion yuan, a year-on-year increase of 27.5%. However, compared with the end of the first quarter, the growth rate of output value decreased by 4.1 percentage points.
Although the profits of the industry have increased, the growth rate has also declined. From January to October 2011, the total profit realized by textile enterprises above designated size totaled 215.56 billion yuan, a year-on-year increase of 29%, and the growth rate was down by 24.6 percentage points from the first quarter. In October, the profit growth rate was only 7.8%, which was a drop of 40 percentage points from the beginning of the year. According to the survey data of the Federation’s key industrial clusters, the profit of small-scale enterprises in the clustered area from January to October increased by 11.4% year-on-year, and the growth rate was lower than that of the above-scale enterprises by nearly 40%; the export-processing small-sized enterprises saw a more prominent decline in profits. The operation of small and medium-sized micro enterprises below the scale encountered great difficulties.
Investment growth in the textile industry is also slowing down. From January to November last year, the total investment in fixed assets of over 5 million yuan in the textile industry reached 610.16 billion yuan, an increase of 34.7% year-on-year, and the growth rate was 3.8 percentage points lower than that in January-March; the number of new projects started was 13,129, an increase from the same period last year. 1.8%. The slowdown in investment and new start-up projects also reflects the decline in corporate market confidence and investment willingness.
What is even more worth pointing out is that, as a large exporter, the textile export growth rate of last year was close to “zeroâ€. According to the customs data, from January to November 2011, the national textile and apparel exports were US$231.84 billion, an increase of 21.0% year-on-year, and the growth rate was 6 percentage points lower than at the end of April. Excluding price factors, the number of textile and apparel exports from January to November increased by only 0.5% year-on-year, of which the number of garment exports only increased by 0.1%. Some export orders were transferred to peripheral low-cost countries, and the international market demand was not optimistic.
the reason--
The raw material market still has risks. Analysis of the loss of international orders, Wang Tiankai, shows that the growth rate of the industry continues to slow down, which is mainly due to the large fluctuations in raw material prices, the increase in production costs, and the lack of external demand.
Look at raw materials first. In 2011, domestic cotton prices showed a trend of ups and downs, which not only caused sluggish production and sales of cotton spinning companies, reduced inventory potential losses and profitability, but also negative effects along the industrial chain, affecting the normal order production and market confidence of upstream and downstream companies, and seriously impeding textile production. The stable operation of the industry.
“The large fluctuations in cotton prices are related to factors such as increased production, changes in demand, credit contraction, and market speculation. China lacks institutional guarantees that effectively suppress domestic cotton price volatility and balance the interests of various stakeholders.†Wang Tiankai, 2011, 9 Since the beginning of the month, domestic cotton prices have remained stable under the influence of the state's interim reserve policy, but international cotton prices have continued to decline, and the difference between domestic and foreign cotton prices has continued to widen. After the completion of the storage operation in March 2012, the trend of domestic cotton prices is still difficult to predict, and there are still major risks in the raw material markets such as cotton.
Look at production costs again. Wang Tiankai said that in 2011, the prices of various factors in the textile industry continued to rise, with the increase in labor costs being the most prominent, and the year-on-year increase of more than 15%. As the cost of various factors of production continues to rise, factors such as bank interest rate increases, and the appreciation of *** have been superimposed on it, which has increased pressure on companies to face rising costs.
The textile industry is dominated by SMEs, and the difficulty of financing is an old problem. The tightening of domestic monetary policy in 2011 made textile SMEs face a series of problems such as hardships, rising interest rates and private lending risks, and tight liquidity.
Finally look at the international market. Affected by such factors as the slow recovery of the global economy and the European sovereign debt crisis, the demand for the textile and apparel international market in 2011 was low. In Pakistan, Vietnam and other developing countries, relying on lower price advantages, caused the loss of orders in China to a certain extent. According to the survey, about 15% of small processing enterprises in the eastern part of the cluster area are currently in the state of suspension or semi-production.
“The loss of orders from export processing SMEs in China is related to domestic costs and policy factors. It is also a result of the adjustment of the international textile industry's division of labor and structure. However, if such orders are transferred too quickly, it will result in a further expansion of the company's shutdown area.†Wang Tiankai said.
prediction--
The difficulties faced by small and medium-sized processing enterprises below the scale will become even more prominent. The internal and external environments facing the textile industry in 2012 are still very complicated. In particular, the situation in the first half of the year may be severe. On the one hand, it is expected that the growth in international market demand will remain weak, and the lack of demand, competitive pressures, and trade frictions faced by export companies will become more prominent. On the other hand, the textile industry may face greater difficulties in the event that raw material prices fluctuate, prices of labor and other factors rise, and the financing environment for SMEs has not substantially improved.
Wang Tiankai predicts that the growth rate of the textile industry in 2012 will slow down compared with the previous year, in which the decline in the growth rate of industry exports and benefits will be more pronounced, and the difficulties faced by small and medium-sized processing enterprises below the scale will become more prominent. In spite of this, he is still optimistic about the prospects of the industry.
“The basic attributes of textiles and clothing as a necessities of life determine that there will be no significant contraction in domestic and foreign market demand,†Wang Tiankai analyzed. From January to November last year, domestic output value of textile enterprises above the designated size reached 4,010.11 billion yuan, up 30.3% year-on-year. The domestic sales value accounted for 82.9% of the total output value, an increase of 1.8 percentage points over the same period of last year. The contribution of domestic demand to the textile industry is continuing to expand. "As inflation pressures are gradually eased, domestic demand for textiles and clothing is still steadily expanding and continues to be the primary support for the development of the textile industry."
At the same time, the market reversal mechanism formed by the tightening external environment will also bring about a new round of industry reshuffling and promote the textile industry to accelerate adjustments and upgrades.
On the one hand, small and medium-sized micro enterprises and export-oriented processing companies in the coastal areas will face greater pressure. “In October 2011, the State Council issued a series of policies and measures to expand the financing channels for small and micro enterprises. However, the effect of implementation is still not obvious in the textile industry.†Wang Tiankai believes that the characteristics of the textile industry with small assets and limited profits are difficult to occur. With fundamental changes, a series of systems and mechanisms to serve SMEs financing will be a long-term gradual process. The risk of corporate capital chain still needs high attention.
On the other hand, under the influence of economic downward pressure, the total contradiction of the industry will be prominent and the international trade friction may increase. “The more difficult times, the more the textile industry must strengthen industry self-discipline, standardize market order and trade behavior, and prevent excessive competition. At the same time, enterprises should also accelerate structural adjustment, solidly improve internal strength, and strive to develop new products, new channels, and new products. Market, the winter to welcome the spring." Wang Tiankai said.
Last year, all growth indicators in the textile industry rose across the board, but the growth rate declined.
At the 7th Annual Meeting of China Textile Round Table held recently, Wang Tiankai, president of the China National Textile and Apparel Federation, stated that the operational risks faced by the textile industry increased significantly over the previous year, and the decline in the growth rate of industry efficiency was particularly prominent. Business operations encounter major difficulties. “The tight external environment has formed a market force mechanism. It is expected that the textile industry will usher in a new round of industry reshuffle in 2012.â€
status quo--
Output value, profit growth slowed down, and the growth rate of export volume was close to zero. Last year, the growth rate of textile production continued to slow down. From January to November last year, a total of 36,000 textile enterprises above designated size achieved a total industrial output value of 4,952.64 billion yuan, a year-on-year increase of 27.5%. However, compared with the end of the first quarter, the growth rate of output value decreased by 4.1 percentage points.
Although the profits of the industry have increased, the growth rate has also declined. From January to October 2011, the total profit realized by textile enterprises above designated size totaled 215.56 billion yuan, a year-on-year increase of 29%, and the growth rate was down by 24.6 percentage points from the first quarter. In October, the profit growth rate was only 7.8%, which was a drop of 40 percentage points from the beginning of the year. According to the survey data of the Federation’s key industrial clusters, the profit of small-scale enterprises in the clustered area from January to October increased by 11.4% year-on-year, and the growth rate was lower than that of the above-scale enterprises by nearly 40%; the export-processing small-sized enterprises saw a more prominent decline in profits. The operation of small and medium-sized micro enterprises below the scale encountered great difficulties.
Investment growth in the textile industry is also slowing down. From January to November last year, the total investment in fixed assets of over 5 million yuan in the textile industry reached 610.16 billion yuan, an increase of 34.7% year-on-year, and the growth rate was 3.8 percentage points lower than that in January-March; the number of new projects started was 13,129, an increase from the same period last year. 1.8%. The slowdown in investment and new start-up projects also reflects the decline in corporate market confidence and investment willingness.
What is even more worth pointing out is that, as a large exporter, the textile export growth rate of last year was close to “zeroâ€. According to the customs data, from January to November 2011, the national textile and apparel exports were US$231.84 billion, an increase of 21.0% year-on-year, and the growth rate was 6 percentage points lower than at the end of April. Excluding price factors, the number of textile and apparel exports from January to November increased by only 0.5% year-on-year, of which the number of garment exports only increased by 0.1%. Some export orders were transferred to peripheral low-cost countries, and the international market demand was not optimistic.
the reason--
The raw material market still has risks. Analysis of the loss of international orders, Wang Tiankai, shows that the growth rate of the industry continues to slow down, which is mainly due to the large fluctuations in raw material prices, the increase in production costs, and the lack of external demand.
Look at raw materials first. In 2011, domestic cotton prices showed a trend of ups and downs, which not only caused sluggish production and sales of cotton spinning companies, reduced inventory potential losses and profitability, but also negative effects along the industrial chain, affecting the normal order production and market confidence of upstream and downstream companies, and seriously impeding textile production. The stable operation of the industry.
“The large fluctuations in cotton prices are related to factors such as increased production, changes in demand, credit contraction, and market speculation. China lacks institutional guarantees that effectively suppress domestic cotton price volatility and balance the interests of various stakeholders.†Wang Tiankai, 2011, 9 Since the beginning of the month, domestic cotton prices have remained stable under the influence of the state's interim reserve policy, but international cotton prices have continued to decline, and the difference between domestic and foreign cotton prices has continued to widen. After the completion of the storage operation in March 2012, the trend of domestic cotton prices is still difficult to predict, and there are still major risks in the raw material markets such as cotton.
Look at production costs again. Wang Tiankai said that in 2011, the prices of various factors in the textile industry continued to rise, with the increase in labor costs being the most prominent, and the year-on-year increase of more than 15%. As the cost of various factors of production continues to rise, factors such as bank interest rate increases, and the appreciation of *** have been superimposed on it, which has increased pressure on companies to face rising costs.
The textile industry is dominated by SMEs, and the difficulty of financing is an old problem. The tightening of domestic monetary policy in 2011 made textile SMEs face a series of problems such as hardships, rising interest rates and private lending risks, and tight liquidity.
Finally look at the international market. Affected by such factors as the slow recovery of the global economy and the European sovereign debt crisis, the demand for the textile and apparel international market in 2011 was low. In Pakistan, Vietnam and other developing countries, relying on lower price advantages, caused the loss of orders in China to a certain extent. According to the survey, about 15% of small processing enterprises in the eastern part of the cluster area are currently in the state of suspension or semi-production.
“The loss of orders from export processing SMEs in China is related to domestic costs and policy factors. It is also a result of the adjustment of the international textile industry's division of labor and structure. However, if such orders are transferred too quickly, it will result in a further expansion of the company's shutdown area.†Wang Tiankai said.
prediction--
The difficulties faced by small and medium-sized processing enterprises below the scale will become even more prominent. The internal and external environments facing the textile industry in 2012 are still very complicated. In particular, the situation in the first half of the year may be severe. On the one hand, it is expected that the growth in international market demand will remain weak, and the lack of demand, competitive pressures, and trade frictions faced by export companies will become more prominent. On the other hand, the textile industry may face greater difficulties in the event that raw material prices fluctuate, prices of labor and other factors rise, and the financing environment for SMEs has not substantially improved.
Wang Tiankai predicts that the growth rate of the textile industry in 2012 will slow down compared with the previous year, in which the decline in the growth rate of industry exports and benefits will be more pronounced, and the difficulties faced by small and medium-sized processing enterprises below the scale will become more prominent. In spite of this, he is still optimistic about the prospects of the industry.
“The basic attributes of textiles and clothing as a necessities of life determine that there will be no significant contraction in domestic and foreign market demand,†Wang Tiankai analyzed. From January to November last year, domestic output value of textile enterprises above the designated size reached 4,010.11 billion yuan, up 30.3% year-on-year. The domestic sales value accounted for 82.9% of the total output value, an increase of 1.8 percentage points over the same period of last year. The contribution of domestic demand to the textile industry is continuing to expand. "As inflation pressures are gradually eased, domestic demand for textiles and clothing is still steadily expanding and continues to be the primary support for the development of the textile industry."
At the same time, the market reversal mechanism formed by the tightening external environment will also bring about a new round of industry reshuffling and promote the textile industry to accelerate adjustments and upgrades.
On the one hand, small and medium-sized micro enterprises and export-oriented processing companies in the coastal areas will face greater pressure. “In October 2011, the State Council issued a series of policies and measures to expand the financing channels for small and micro enterprises. However, the effect of implementation is still not obvious in the textile industry.†Wang Tiankai believes that the characteristics of the textile industry with small assets and limited profits are difficult to occur. With fundamental changes, a series of systems and mechanisms to serve SMEs financing will be a long-term gradual process. The risk of corporate capital chain still needs high attention.
On the other hand, under the influence of economic downward pressure, the total contradiction of the industry will be prominent and the international trade friction may increase. “The more difficult times, the more the textile industry must strengthen industry self-discipline, standardize market order and trade behavior, and prevent excessive competition. At the same time, enterprises should also accelerate structural adjustment, solidly improve internal strength, and strive to develop new products, new channels, and new products. Market, the winter to welcome the spring." Wang Tiankai said.
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