The Textile Industry Looks Forward To The Dawn Before Dawn

The textile industry looks forward to the dawn before dawn

The textile industry is currently in the most difficult period of internal and external troubles. Some people are optimistic about it as the darkness before dawn. I don’t know how many companies have fallen silently in the dark, and how many companies are looking forward to the early darkness. Tianming.

Since August 1st, the export tax rebate rate for some textiles and clothing has increased from 11% to 13%. This good news has undoubtedly made some textile companies see the dawn.

Since last year, the textile industry has been plagued by many unfavorable factors – the appreciation of the renminbi, the reduction of export tax rebates, the increase in raw materials prices, the implementation of the new labor contract law, environmental restrictions, and the US subprime mortgage crisis to reduce international market demand.

These unfavorable factors have caused the textile industry to face a serious crisis of survival. According to the statistics released recently, the accumulated losses of the textile industry from January to May 2008 reached 9.958 billion yuan, a substantial increase of 2.972 billion yuan over the same period of last year, an increase of 42.54% year-on-year. In the first two months of this year, the growth rate of losses was 37.20%. The growth rate of losses from January to November last year was only 14.34%. Under the influence of drastic changes in the internal and external environment, the speed of the overall decline in the textile industry is indeed accelerating.

According to the investigation by the Textile Chamber of Commerce, many companies in passive adjustment have been hit by the external environmental pressure. In particular, in some small and medium-sized enterprises, the phenomenon of production cuts, layoffs, and work stoppages has occurred frequently.

Although many textile companies prefer to regard the predicament in front of them as "the darkness before dawn." In their view, the impact of this round of the US subprime mortgage crisis should gradually dissipate within a year or two. At that time, the Sino-US textile agreement has expired, and China's textile and apparel exports will surely see a bright future. However, we should also clearly understand that the darkness in front of us is long and needs to be “smashed”. The company that can “persist” to the last can see the dawn. In the process, a considerable number of small and medium-sized enterprises will still fade out forever. Competition stage.

The increase in the export tax rebate rate for textiles is clearly a timely aid from the government when SMEs face unprecedented difficulties. Perhaps gave some companies the hope of survival.

For export-oriented enterprises, the export tax rebate rate is adjusted by one percentage point, which is equivalent to directly increasing the amount of 1% of the total export value of enterprises to corporate profits. Not only that, but it can also effectively reduce the competitive pressure brought by the “export to domestic sales” to the domestic market.

However, what is worrying is that due to the lack of branding in China's textile and apparel, the added value is low, resulting in the lack of independent pricing power for exports. Increase the export tax rebate rate, foreign buyers will take the opportunity to reduce prices, and ultimately may make the profits of enterprises to increase export tax rebates to be occupied by foreign buyers. Therefore, in order to truly weather the darkness of the textile industry, technological innovation and industrial upgrading are the ultimate way out for the textile and garment industry.

Just as Vice Minister of Commerce Gao Hucheng said in an interview with media reporters recently that the stability policy has become the consensus of the relevant departments, but enterprises must also adjust their situation to speed up the adjustment.

At present, what textile companies need to do is still honing their own expectations, improving their ability to innovate independently, and welcoming the dawn before dawn.