China’s textile industry: the recovery of the road too long looking forward to the four major content

As China’s largest employment sector to absorb one of the revitalization of the textile industry planning as early as 12 in mid and late 2008 had been drafted and submitted to the State Council reported to the trial. Obviously, once the iron and steel, automobile planning for the revitalization of the two major industries, the textile industry will also be followed by raising the veil.

Despite the forthcoming, but in an interview with Sohu Finance found that many people in the industry looked forward to the planning as well as the view that policy rain slightly slow, the effect remains to be seen, but also hope to have more detailed, interoperability stronger measures introduced .

As overseas dependence reach 30% of the labor-intensive traditional industries, China’s textile industry in the financial tsunami has become “disastrous.”

Data show that in 2008 January-November, large-scale textile enterprises realized a total profit of 104.2 billion yuan, up 1.77 percent decline in growth rate over the same period in 2007 dropped 38.76 percentage points. In which a loss of loss-making enterprises amounted to 22.75 billion yuan, an increase of 99.85%, 2 / 3 in a loss of business losses or marginal. This is China’s textile industry for the first time in 10 years of negative growth, the textile industry in 2008 full-year 2007 profit will be flat or even negative growth, while in 2007 the industry profit growth as high as 37.79 percent.

“Although we can not say that the current loss of the textile industry has been plunged into a comprehensive, but the situation is very bad.” China Textile Industry Association vice-president Gao Yong told the media recently.

Due to the rapid decline in profits, the textile industry growth rate of fixed asset investment also showed a gradually declining trend. 2008 January to November, China’s textile industry for more than five million of investment in fixed assets actually completed 247.23 billion yuan, increased by only 8.8 percent year-on-year growth rate fell sharply over the same period by 22.2 percentage points; plans to invest 537.8 billion yuan, increased by only 2.2 % year-on-year growth rate down 16.8 percentage points; the whole industry of new projects 5647, representing a year-on-year reduction of 370.

Profits fell sharply and the market rapidly to enable textile enterprises never felt the “cold.” Zhejiang Shaoxing Rongchang apparel import and export manager of the company, Mr. Wang told Sohu finance, doing business for so many years, he had never encountered before, like so many difficulties in 2008, “the first half of orders is also relatively stable, but the beginning of August, as rising raw material the appreciation of the RMB, increasing labor costs, the impact of national policies and international economic recession, orders dropped significantly. I do not peer around quite a lot of the past, some still in a loss. ”

It is understood that nearly 200,000 textile enterprises of all sizes have absorbed more than 20 million people to seek employment. Obviously, if there is a general loss of the textile industry and the closure will be brought about not only the industry’s recession, will also bring about large-scale unemployment.

“Therefore, we are very much looking forward to the next phase of national policy, with these policies, we might be able to stand up again.” Mr. Wang said.

Worth looking forward to the four major content

For such a stimulating employment 20,000,000 an important industry, the management will certainly not stand by with folded arms. In mid-December 2008, China’s textile industries to revive plans to surface.

Involved in policy formulation, according to the sources, the proposed plan to revitalize the textile industry to establish the structural adjustment, technological innovation and industrial upgrading, such as special funds to support the development of enterprises. The special funds from the national organization of independent innovation and industrial restructuring in the allocation of project funds.

In addition, the revitalization plan also includes: Continue to increase the export tax rebate rate to 17%; the expansion of the credit scale, especially small and medium-sized funds to resolve the difficulties, it is recommended the use of discount loans; support enterprise merger and reorganization, and actively expand exports, to consolidate and develop the international market.

It is planning to revitalize the textile industry in light of the “Eleventh Five-Year” development plan, by the National Development and Reform Commission, Ministry of Information Industry and the relevant departments and the China Textile Industry Association in drafting the formulation, the time span from 2009 to 2011.

According to the plan recommends that the state should allocate special funds to support the enterprise restructuring and industrial upgrading, and to establish a long-term mechanism, the annual establishment of a special fund for this purpose.

The special funds, how much? How should be distributed? In this regard, Sohu interview with the first textile Financial Network chief analyst Wang forward. He pointed out that funds would not be significant scale up to more than two billion yuan will be. “The key is a large number of textile industry enterprises, small-scale, layout, scattered, head of each business, the funds on a few.”

“So, the short term, a limited role; long term, however, perhaps the industry will play a catalytic role. In accordance with past experience of similar funds will be mainly by large state-owned key enterprises, and more basic hopeless enterprise. “Wang said forward.

In response, Foreign Trade and Economic Institute of International Economic and Trade University, Professor Sang Baichuan said that as industrial upgrading funds and technical funds, should be accurate support.

He said that it is necessary to establish a set of evaluation of an assessment mechanism to ensure that procedural fairness under the premise of technical strong, good conditions for industrial upgrading the backbone of textile enterprises funds tilt At the same time, with growth potential as part of dynamic small and medium-sized support to growing the market leader, so that part of the funds truly play the role of “skillfully deflected the question and” the role of truly successful textile enterprises to promote transformation and upgrading.

If it is said that a special fund might not scruple to all-round, then continue to increase the export tax rebate rate to 17% is a comprehensive benefit, and this standard means that China’s textile and garment export adopt a “zero tariff” to encourage policy.

At present, the textile and garment export tax rebate rate is 14%. According to industry estimates, the export tax rebate rate for every 1 percentage point increase would increase the profits of four billion yuan industry. In that case, if the 3 percentage point increase, it means that the industry can be increased 12.0 billion profit.

There is no doubt that this is the textile and garment industry, especially export-oriented textile enterprises will have a major positive. But there are also people in the trade believe that the current situation, even the “zero tariff” would not resolve the problem, as demand has shrunk, while the premise of increasing profits is to have orders.

Studies indicate that in 2008 January-November, exports of clothing and accessories than the same period last year dropped 19.1 percentage points. January-November exports of textiles and garments increased by only 8.0% over the same period dropped 11.66 percentage points. And if taking into account the factors of changes in currency exchange rates to the yuan-denominated the first 11 months of the textile and garment export is a 1.49 percent decline.

“From January last year till now, China’s textile export growth has been 10 months to fall, showing a worsening trend in exports is being further expanded. Because of the serious oversupply of capacity, so as to reduce external demand, the enterprise can only be resolved through each other to keep the prices down to snatch market . “Wang said forward.

The long road to recovery

Although from the current plan to disclose the contents of the revitalization of view, support for large, but the industry is not convinced that this will make the textile industry out of the haze.

Golden State quarterly reports on the securities industry that, due to decline in export growth and domestic slowdown in the coming for a long period of time will continue to affect the business operation of the recovery on the one hand, the future depends on Europe and the United States to stabilize the economy, on the other hand, dependent on the domestic market improved, therefore, medium and long term, a relatively long road to recovery.

Similarly, forward Wang also pointed out that investment in the textile industry from the recent change of view, to cut interest rates, value-added tax policies such as the attractiveness of the transition is not too great. Raising the export tax rebate on the premise that produce good businesses to overseas orders. And value-added tax transformation is the introduction of new equipment will help enterprises, but medium-sized enterprises may not even following the introduction of capital equipment are not.