For more than half a year, on the road of economic development, our country has continued to be squeezed by both internal and external forces. With the demand-side pressure and cost constraints and other factors continuing to ferment, my country’s textile industry production, export, Major economic indicators such as investment continue to slow down, and industry development has encountered unprecedented difficulties. At present, what are the main issues restricting the development of the textile industry?
Overcapacity is large but not strong
In the process of rapid development of the textile industry, contradictions in the industrial structure have increasingly highlighted the problems of overcapacity and large but not strong industries. 60 years ago, my country had only more than 5 million spindles, accounting for 5% of the global total; 30 years ago, China’s production capacity reached 18 million spindles, accounting for 11% of the world; 10 years ago, China’s production capacity exceeded 120 million spindles, The annual growth rate is close to or even exceeding 10%, and the production capacity reaches more than 50% of the global production capacity. By 2012, as the “4 trillion” economic stimulus faded, the textile industry embarked on the path of reducing production capacity and eliminating backward production capacity. Nowadays, with the trade war and the epidemic, the market operating environment is harsh.
Raw materials are constrained by enemies from both sides
Based on The cost of raw materials accounts for about 70% of the cost of spinning. It is not difficult to see that it comes from the constraints of the raw material market. Therefore, the changes in yarn market prices come more from “cotton”. Comparing the price trends of the yarn market with those of the cotton market, the two remain highly consistent. Years later, the epidemic has created a trend that is different from the past. Since cotton bottomed in March, it has embarked on the road to restore its own valuation, but yarn prices have been declining. Originally, the two prices rose and fell in parallel, but with the outbreak of demand-side restrictions, the price difference between the two has gradually narrowed. Spinning profits cannot be guaranteed, and losses have become commonplace. The continued dependence on raw materials is the direct cause of the industry’s difficulties.
The labor cost advantage no longer exists and competitiveness weakens
Compared with Southeast Asian countries, many companies rushed to Southeast Asia in the early years because the domestic labor cost advantage no longer existed. Going to Southeast Asia was originally to save costs. , which turned out to be expensive in just a few years. Let’s compare the minimum wages in my country and Vietnam. The same thing is that the minimum wages in my country and Vietnam have continued to rise. However, in terms of rising momentum, Vietnam’s growth rate has gradually caught up with my country’s. The difference between Vietnam’s minimum wage and China’s is from 3 times to less than 2 times.
But in terms of the textile sector, the wages of textile workers in my country are still more than three times that of textile workers in Vietnam. Conveniences in terms of water, electricity, land, tariffs, etc., and the cost of raw materials are only about 80% of those in China, which has attracted many large domestic companies to invest and build factories. Although Vietnam once called itself the Little China in the south, its attitude and actions towards work are completely different from ours. The work efficiency in Vietnam is too low. Those who can grind foreign workers will grind, and those who can paddle will paddle. China can do it alone, Vietnam One and a half or even two, more is possible. Production efficiency was low. Even so at that time, the comprehensive cost of investing in and building a factory in Vietnam was still about 15% lower than that in China. The continued rise in production and financial costs is the basic reason for the loss of industry advantages.
Fund restrictions are like a fight between trapped animals
The problem of capital shortage in the textile industry is particularly prominent. Excessive capital gaps and unprotected business operations are problems that plague development. The main manifestation is that the national textile industry is short of funds, which makes it difficult to implement plans and lacks money to buy raw materials.
Under the pressure of risk aversion and payment collection, the inventory of raw materials decreased, and the deterioration of the capital status led to a chain of debt arrears and production decline.
By observing the total interest expenses and losses of industrial enterprises above a certain scale in the textile industry, it can be seen that although interest expenses have gradually shrunk since 2014, those above a certain scale However, the total losses of industrial enterprises are increasing year by year. The more they lose money, the tighter their funds become. This is already the case for large-scale enterprises. How can small and medium-sized enterprises break out of the siege?
When will the demand dilemma return to pre-epidemic levels?
Judging from the overseas demand environment, the epidemic has continued to ferment to this day. In terms of the unemployment rate, overseas countries have affected epidemic prevention from the early resumption of work, and affected the economy by not resuming work. Now they are actively Recovering the economy has made considerable changes. The United States, however, stood up early, saying that the economy is more important than epidemic prevention. At a time when the epidemic situation was still unclear, that is, when signals for economic recovery were issued in mid-April, work resumption began in late April. The resumption of work was coupled with factors such as large-scale demonstrations, and the epidemic continued to recur. The unemployment rate surged from 4.4% to 14.7%.��The situation has now turned around and improved, and the unemployment rate has rebounded. Also looking at India and the EU, their unemployment rates remain high.
Among the international markets, Europe and the United States are the most important foreign trade markets in our country. Starting in April, a package of stimulus policies has been effective after the resumption of work and production, judging from consumer confidence in Europe and the United States. After the urgent resumption of work, the unemployment rate improved in June. Although the U.S. consumer confidence index has improved, it is still low and lower than the usual normal level. The turning point has not yet been reached, but it is already on the road to recovery. The situation in the European Union can be said to be exactly the same, but there is still a long way to go before full recovery.
In addition, judging from the industrial production index, May can be said to be the most addictive trough period. The European and American industrial production index in June The rapid rebound is due to the fact that the United States attaches great importance to the economy, but the epidemic is still severe. This is not a joke, nor is it a pity. There is still a long distance from the establishment of consumer confidence to the return of demand.
Economy: Extensive VS Precision
The domestic textile industry is on the road to an extensive economic system. The quality of domestically sold products is average, but they are large in size and good in quality. It is cheap and eventually flows to the wholesale market. That is to say, during the epidemic, after more companies exported to domestic sales, they downgraded their products and reduced prices for the domestic market to enhance their core competitiveness.
The products sold for export are of high quality, have environmental certification, and are exported to European and American countries. European and American countries process supplied materials and create brands and luxury goods that enter chain stores and supermarkets. Some of them return to China and feature high-end privately customized products.
Overall, a sophisticated economy can create more profits, but we are only in a basic processing link and lack the certification of major international brands, so more profits can be made. Has been taken away. Due to the current economic situation, our country has reached a critical moment of development from the outside in and refinement. The upgrading of the extensive to fine textile industry is a necessary process. The emergence of trade wars and epidemics have accelerated industrial upgrading. During this period, it is bound to be accompanied by the difficult decision of survival of the fittest and elimination of the least.
Taken together, the textile industry is in urgent need of change, but this change cannot be achieved overnight Yes, it needs to be perfected step by step. The road under your feet is distance; the road in your heart is pursuit. </p
