The textile industry has encountered the coldest winter ever

National Meteorological Observatory news, the arrival of La Nina, this winter will be more severe than usual! So some people say "may be frozen and crying." Not only that, but also affected by La Nina, the textile industry may also be frozen and crying. As a traditional labor-intensive export industry, China's textile workwear industry accounts for a large proportion of China's export trade. However, since 2015, due to the slowdown of global economic growth, exchange rate fluctuations, and high domestic cost of creation, China’s textile workwear exports have continued to decline, and the situation is extremely bad. Therefore, the information of major textile workwear enterprises has been closed down. Endless.

The phrase "business is getting harder and harder to do" has almost become the mantra of the bosses. "More than half of the private enterprises are struggling... When there are difficulties in previous years, but they have never been so sad," they told the bosses.

It’s not uncommon for the boss to run the road repeatedly.

Lack of money has become the most difficult problem at the moment. If there is no money, the company will fall. Not long ago, the news of the bankruptcy of "Xidelong" and the bankruptcy and reorganization of Jinjiang Yuchao Footwear Company, people have lamented, what happened to Jinjiang shoe factory in recent years? For more than 20 years, with the shortcut of “OEM starting → switching to domestic sales → signing spokespersons, advertising and building brands → store expansion → listing”, Jinjiang has become “China Textile Industry Base” and “Chalk Capital”. However, under this round of industry adjustment, Jinjiang has clearly reached the crossroads of transformation.

For Jinjiang enterprises, the main means of financing are banks, private lending and listing financing. However, these three channels are not only resistant but also raging. Most of the companies that run the road are the capital chain break due to the inability to repay the debt due. In today's environment, most banks maintain the loan balance at the most, and will not add new loans to the footwear industry. Enterprises have a certain scale to win bank loans, and more small and micro enterprises can only turn to private lending, but interest rates rise with the bank's contraction, and annual interest rates are as high as 30%. In the current downturn in the footwear industry and the shrinking profits, The risk of this type of financing can be imagined. "Which capital chain breaks first, whoever dies first" has become a spell in the textile industry. The volume of orders has fallen sharply, and labor costs have remained high. The phenomenon of bank debt collection caused by joint lending and coalition insurance has been high, and the textile chemical fiber industry has been in a difficult position. Following the bankruptcy or suspension of production of more than 20 large and medium-sized textile chemical fiber companies in 2015, several companies have emerged in debt crisis this year.

Liucheng company is laying off staff

In fact, not only a large number of small textile companies are dying, but even large textile companies listed on the A-share market are experiencing a decline in profits or even losses. According to Wind data, among the 36 textile companies listed on the A-share market, 10 of them were at a loss in the first half of the year, and the loss ratio exceeded 25%. In 2010, only one textile company lost money. In the first half of 2016, the net profit of listed textile companies also continued to decline for the first three years, and net profit fell more than 10%.

In the context of falling profits and even losses of listed companies; the textile industry, which is a typical representative of labor-intensive industries, has opened a mode of layoffs. According to statistics, 21 of the 36 textile companies listed in the A-share market in 2015 were laid off, and layoffs accounted for nearly 60% of the total; and such layoffs began in 2013.

The global market suffers from "cold flow"

"The weak economic environment and rising labor costs should be the main reason for the progress of the textile workwear industry in recent years. This is also the two factors that I feel the most." Zhang Haibing, general manager of Shanghai Aiyuan Textile Co., Ltd. In an interview with the reporter, he said. Fu Wei, general manager of the trade department of Ningbo Huagudu Fashion Co., Ltd. said that in 2015, orders for export to the European market fell sharply compared to 2014, and orders for export to the Russian market were simply gone.

According to customs statistics, in 2015, the cumulative trade volume of China's textile workwear was US$309.51 billion, down 4.8% year-on-year. Of this total, exports were US$283.9 billion, down 4.9% year-on-year; imports were US$25.61 billion, down 3.5% year-on-year; cumulative trade surplus was US$258.29 billion, down 5% year-on-year. Industry insiders pointed out that there are many reasons for the decline in textile workwear exports. The weak external demand cannot be ignored: the EU economy has always been in a downturn, the economic progress of EU member states is not balanced, the unemployment rate in Greece and other countries continues to be high, and consumer demand is limited; In recent years, the Japanese import market has declined, and the industrial transfer rate has accelerated. The share of Chinese products in Japan has continued to decline. The ASEAN market has not been able to rise again in the past few years, and the market has fallen sharply. The US market has remained relatively stable.

Internal factors are highlighted

Insiders pointed out that the decline in the export of textile workwear industry is different from that in 2009. In 2009, due to the sudden global financial crisis, the volume of trade contracted sharply. In 2015, the decline in exports was more due to the disappearance of China’s traditional export advantages. The structural decline caused by the superposition of internal and external adverse environments. Zhang Haibing said that the rise in labor costs is almost a common problem on the verge of all textile workwear companies in China, and it is also the most difficult problem facing labor-intensive industries. Due to rising labor costs, many orders have begun to shift to Southeast Asia. “Technology and governance in Southeast Asian countries are relatively lagging behind China. Our company mainly produces medium and high-end workwear products, so the impact is not too big, but some of my friends’ companies have seen a 20% to 30% decline in orders last year.”

After the introduction of the new Labor Law in 2008, China’s labor costs more than doubled in just five years. Since the textile workwear industry is a typical labor-intensive enterprise, the increase in labor costs has brought unimaginable pressure on business operations. Especially in recent years, due to the surge in domestic costs, many foreign-funded enterprises have been transferred to South Asia and Southeast Asia on a large scale. The most famous ones include Adidas, Nike, Uniqlo, and Muji.