The textile industry faces difficulties and prospects

First, the textile industry's dilemma "survival" China is saying goodbye to the "world factory"

Business News Agency September 5th Since the end of 2007, with the acceleration of the appreciation of the renminbi and the high domestic CPI, and the increase in labor costs brought about by the implementation of the new Labor Contract Law, Chinese manufacturing companies are facing a An unprecedented dilemma. According to a company survey compiled by the American Chamber of Commerce in Shanghai, the competitive advantage of mainland China is weakening, mainly due to rising costs. At the time of the 30th anniversary of China's reform and opening up, we have to face up to such a proposition: the so-called labor comparative advantage is gradually losing. At the crossroads of transformation, the question we must think about is: Where is China's new competitive advantage?

Textile industry: "survival" in the predicament

The Canton Fair has been regarded as a barometer of import and export trade. However, the 103rd Canton Fair, which just ended, was referred to by the media as the “declining” Canton Fair. The report said that the biggest loser of the Canton Fair this year is the textile and clothing exhibition area. Merchant Mark from South America, Chile, imports a large amount of daily necessities such as clothes, shoes and hats to China every year. However, his procurement scope is not limited to China, because things in Vietnam, Bangladesh and other countries seem to be cheaper. It is almost impossible for Chinese clothing prices to be as cheap as before.

Second, the export situation of China's textile and garment enterprises

"The export situation of China's textile and garment enterprises is unprecedentedly severe!" Fu Qingmin, deputy general manager of Shandong Binzhou Yaguang Towel Co., Ltd., who just returned from the Canton Fair, is very worried about the prospects of the textile industry. He said: "Some foreign customers have begun to shift their purchasing destinations to lower-cost neighboring countries such as Bangladesh, India, and Vietnam. If China's relevant policies continue to be tight, some textile companies in China will fall into losses or even close down."

More than 90% of the products of the Matte Towel Company are exported overseas, and the export towel volume ranked first in the country in 2007. As the first leading enterprise in China's towel export, the situation of Yaguang Towel Company truly reflects the current dilemma faced by Chinese textile enterprises.

An Italian buyer buys clothes in front of a booth of a textile company located in the Canton Fair.

The attractiveness of Chinese textiles is decreasing

China's textile and apparel products, which have long been competitive in price, have not regained their glory in the Canton Fair. Foreign customers have become more critical of Chinese products. As early as the traditional ordering period after the Spring Festival, the matt towel company encountered a situation where the price increase was blocked.

According to Liu Shubin, deputy general manager of Yaguang Towel Co., Ltd., although the quality of Yaguang products is superior, when the RMB exchange rate and export policies are affected, the cost of enterprises has risen greatly. Before the Canton Fair, due to the company's proposed price increase of 4%, the three original long-term partners in Australia went away. Last year, the sales of these three partners accounted for 40% of the company's market in Australia. Liu Shubin said: "In the towel export enterprises, if Yaguang proposes that the price increase request is rejected, it is more difficult for other companies to raise prices."

The information that Fu Qingmin brought back from the Canton Fair is that despite the great resistance to the price increase of export products, foreign customers have slightly increased the purchase price of some orders under careful trade-off comparison. There are many factors that encourage foreign customers to recognize small price increases, but the impact of RMB appreciation on export companies is an important reason. Last year, Yaguang's marketing revenue was 2.3 billion yuan, an increase of 600 million yuan over the previous year, but the profit was only 1.6 billion yuan, a decrease of 10 million yuan over the previous year. This is also the operating status of a leading enterprise in the industry. The survival of similar enterprises at the low end of the product can be imagined.

Fu Qingmin believes that the reason why foreign customers are difficult to give up their Chinese textile and apparel products is that the neighboring countries have poor industrial support and product quality is difficult to guarantee. It is difficult to replace China's high-end textile and apparel products in the short term. At present, there is still a gap between the level of textile industry in neighboring countries and China. However, the current low-end products are clearly shifting to these countries.

In the long run, with the maturity of textile technology in neighboring countries and the improvement of industrial support, China's textile and garment industry will face more difficulties. Fu Qingmin believes that due to the appreciation of the renminbi, the export costs of enterprises have increased, and foreign customers have begun to transfer to low-cost countries such as Bangladesh, India, Pakistan, and Vietnam. This has now become the beginning of a strategic shift.

A senior executive of the Textile Import and Export Trade Association recently talked about the textile industry in public, saying that "10 companies are difficult to get." This statement reflects to some extent the predicament that the Chinese textile industry is currently facing. According to the latest statistics, in February, China's textile and apparel exports amounted to 10.28 billion US dollars, a year-on-year decrease of 11.07%. From January to February, the cumulative export volume of textiles and apparels achieved a growth rate of 8.19%, down 30.9% from the same period in 2007.

Located in Shengze Town, Wujiang City, the southernmost lake basin of Jiangsu Province, it is a famous land of fish and rice, and is one of the four major silk capitals of China, which is the same as Suzhou, Hangzhou and Huzhou. Since the reform and opening up, Shengze Silk Industry has introduced tens of thousands of sets of production equipment with advanced level at home and abroad after several rounds of large-scale technological transformation. The Chinese Oriental Silk Market in the town is one of the largest professional textile textile markets in China. In 2002, the transaction volume was 14.8 billion yuan. Shengze Town has become the main production base, export base and product distribution center of China's silk textile industry.

However, the reporter recently learned in an interview with Shengze Town that since the end of 2007, a large number of private textile and chemical fiber enterprises in Shengze Town have closed down, especially indirect spinning enterprises. The production capacity of the indirect spinning enterprises in the town has been reduced from the original 2 million tons to 200,000 tons, leaving only one tenth.