Accelerating Transformation In Textile And Garment Industry

Cotton is one price per day, wages rise, and no one can be recruited. At the 108 Canton Fair, a number of executives interviewed by reporters said that under the superimposed effect of multiple pressures such as rising raw material prices, increasing labor costs and RMB appreciation, enterprises generally faced the test of increasing cost pressure and gradually losing profits.

　　 Facing the "boom", the export pressure of enterprises has increased sharply.

At the 108 Canton Fair, the most important thing for journalists to hear is "rising tone", and labor shortage and rising cost of raw materials are intertwined.

"At the beginning of the year, the labor shortage has been extended so far. Many factories have posted notices of recruitment all the year round. Now that they can recruit more workers, they dare to take one more piece and earn more money. However, due to insufficient recruitment, some Order In the backlog and delay, no one will do it. " Dongguan Dongli plastic products Co., Ltd., said Li Yaoguo, business manager.

As labor costs continue to rise, so does the price of raw materials. foreign trade enterprise It has suffered a lot, especially in the textile and garment industry. "Cotton prices last year were 16 thousand yuan per ton, and this year has reached 24 thousand yuan per ton. Now cotton is one price per day, the price of products is far behind the price range of raw materials, and exports are basically unprofitable. Many textile enterprises are unable to cope with the runaway cotton prices. Because of the rapid changes in cotton prices and the increasing operating costs of enterprises, the textile enterprises with low profit margins are afraid to take orders.

"In addition to cotton prices, a variety of raw materials prices have risen, of which steel prices in September have been adjusted three times a month, up 300 yuan / ton before and after." Hebei Minmetals Import and export Limited by Share Ltd deputy general manager Zhang Su said.

What is most unbearable for enterprises is a substantial appreciation of the renminbi. Chen Quanyou, deputy general manager of overseas market department of Chuang Jia Electronics Co., Ltd., Chaozhou, Guangdong, said that at the beginning of the year, according to the prediction of RMB appreciation of 3% or 5%, the contract was signed and the production plan was arranged. For enterprises with a profit margin of only three or four points, a point of appreciation of the renminbi means that the profits of enterprises will be reduced by one point and the profit rate will be reduced by 25%.

In a "boom" voice, corporate profits are eroded, even with higher profits. Electromechanical products It's also hard to bear. Wang Guiqing, vice president of the China mechanical and electrical chamber of Commerce, said that a considerable part of the profits of the mechanical and electrical export enterprises were 3%, and some enterprises' profits were 6% to 7%. Only a small number of enterprises' profits were around 10%.

　 The dilemma of protecting the market and protecting profits

Facing the pressure of cost pressure, exhibitors increased export prices to varying degrees, but the profits of enterprises did not increase with the increase of prices.

Zhang Su said that since the beginning of the year, many companies have raised nearly 20% of their products, but the high price has not brought more profits.

Du Fei, assistant general manager of Shenzhen yanjialong Industrial Development Co., Ltd. said that although the cost of the product has been raised by seven or eight points this year, the price of the product has been raised by only 3%, and the cost gap has been made up through the internal tapping potential. However, the reality is still brutal, and the export profit is getting thinner and thinner.

"In order to protect the market, under the fierce export competition environment, enterprises have limited price increases. Some enterprises are making a lot of money in small profits, mostly in order to keep their old customers, because once customers are gone, it is hard to find them again." A Shandong textile enterprise suffering from cotton price is responsible for many foreign trade enterprises.

Nevertheless, some orders are being transferred to other countries as the price of Chinese exports rises, making India and other emerging markets benefit from it. Zhang Su said that in the field of Minmetals industry, many orders have begun to transfer to India enterprises, and buyers are trying to find new markets to reduce procurement costs.

In the view of many foreign businessmen, the appreciation of the renminbi is the general trend and inevitable. Many companies worry that the appreciation of the renminbi will make Chinese exports more and more expensive, and the market share will be eroded.

At the same time, with the gradual marketization of resources such as coal, natural gas, electricity and water, the production cost of enterprises will continue to increase. At the same time, labor costs will rise and environmental costs will increase. " Guo Hongjun, director of the comprehensive business department of the China Minmetals Import and Export Chamber of Commerce, believes that the existence of these factors will further enhance the export cost.

　　 Accelerating transformation of growth mode of foreign trade

"Despite the increasing pressure, there are more ways than difficulties!" said Shang Jinsong, chairman of Shandong Shanhai glass products Co., Ltd., "foreign trade enterprises are trying to get rid of their predicament, and plan for the long term, accelerate the transformation of growth mode, and actively enhance their core competitiveness so as to ensure the sustainable growth of foreign trade."

It is an emergency measure for most enterprises to make long lists and short ones. Zhang Su said that in view of the rising costs caused by changes in exchange rates, enterprises should take measures to break the long list into short bills and big bills into small bills, and strive to keep customers, while actively resolving trade risks and enhancing corporate profits.

At the same time, enterprises can also weaken the negative impact of RMB appreciation by signing contracts with foreign merchants, and stipulate that when the appreciation of RMB exceeds a certain extent, the price of products will be raised accordingly. In view of the rising cost of raw materials, the hedging function of futures market will weaken the impact. For the increasingly expensive labor force, many exhibitors increase their equipment and efficiency, and strive to reduce the demand for labor.

"In addition to taking these short-term measures, China's foreign trade enterprises should pay more attention to innovation, research and develop new products, optimize overseas sales channels, enhance core competitiveness, so as to effectively cope with various foreign trade pressures." Li Lei, an International Economic Research Institute of Nankai University, believes that the cost stress test shows that the competitiveness of China's foreign trade enterprises is insufficient and its export structure is not good enough.

The reporter learned from the interview that the 108 foreign trade enterprises that had made the transition earlier had already had the ability to resist and resolve the rising cost. Among them, Haier, GREE and other leading technology companies with better independent brand base have indicated that under the circumstance of large fluctuations in the RMB exchange rate and raw material prices, enterprises can digest the above adverse factors and maintain export growth rate of around 20%. The small and medium-sized private enterprises such as Zhejiang BEIFA Group Co., Ltd., through the innovative operation mode, are more widely involved in the whole industry value chain and gain new competitive advantages. {page_break}

"As the theme of changing the mode of development of foreign trade, enterprises must constantly improve their long-term core competitiveness, focusing on the transformation from focus on quantity price competition to brand benefit competition, from emphasis on processing and manufacturing to independent marketing." Wang Shouwen, director of the Ministry of foreign trade of the Ministry of Commerce, said.

　 Changing the mode of foreign trade growth is a protracted war.

Rising cost and competitiveness

Textile and garment industry: opportunities and solutions in Post Crisis Era

By analyzing the contribution of the OECD and China's textile industry in the past ten years, it can be concluded that the growth of China's textile industry in the OECD market mainly comes from world growth and price competitiveness, and the contribution of market and product advantages is very small. In recent years, due to the rising cost of labor raw materials, the price competitiveness of China has declined significantly in the past ten years. Therefore, in the post crisis era, we must adjust the industry (product) structure, optimize the market structure, and change the traditional competition mode in order to achieve a new round of growth.

Looking back to the first ten years of twenty-first Century, the world economy showed great changes: China's accession to the WTO, the extinction of the multi fibre agreement (MFA), and the outbreak of the global financial crisis. These three things directly affect China's textile industry: as the largest textile exporter, China's accession to the WTO makes it truly cosmopolitan; the demise of the twisted textile trade system, MFA, has made textile trade return to WTO's free trade principle; the global financial crisis has made the world's textile industry vulnerable, and the textile industry has finally played the role of rejuvenating the economic redemption.

Textile trade is the most basic and active part of the world economy, and China's textile industry is also the main promoter of world textile trade. In the past 20 years, the world economy has increased by 1 percentage points, and the world textile and garment exports in the US dollar have increased by 2 percentage points, while China's textile and clothing exports have increased by 4.86 percentage points. Over the past few years, China's textile trade has been increasing faster than the world's textile trade.

In the past ten years, especially the financial crisis, people began to re-examine the role of the textile industry, and also changed people's views on the economic status of textiles. In fact, textile industry is a livelihood industry for all mankind. It is a pillar industry and competitive industry in developed countries and industrialized countries, now or in the developing countries and underdeveloped countries in the past. It is a springboard for industrialization in most countries, carrying the heavy responsibilities of new urban population employment, urban industrial evolution, consumption and market expansion in the process of urbanization.

Modern textile, which provides more than just clothing and consumer goods, can provide all kinds of materials that are fully related to human life, such as home decoration, automotive interior decoration, building roads and water conservancy geotextiles, light high-strength transport vehicles and biomedical materials. Textile has become the basic industry of human beings. In this regard, textile industry is not only a leading industry to promote domestic demand and maintain growth in post crisis era, but also more likely to be an industry that promotes the growth of new markets, emerging industries and emerging industries.

　 In the post crisis era, China's textile industry obviously has huge space.

Multi fibre agreement (MFA) is a distorted trade mechanism. China is the biggest victim of MFA. In fact, MFA not only hindered the development of comparative advantage of a large number of developing countries and underdeveloped countries, but also delayed the upgrading of industrial and economic structure in developed and post industrialized countries. From 1995 to 2004, MFA gradually disappeared under the regulations of the agreement on textiles and clothing (ATC). It can be seen that the growth rate of global textile trade is accelerating during this period. This shows that textile trade liberalization is a prerequisite for the balanced, harmonious and inclusive growth of the global economy.

　　 In the past ten years, especially after the abolition of MFA, China's textile industry has enjoyed a rapid growth in the international market.

Taking the OECD market as an example, this paper analyzes the contribution of China's textile industry in the past ten years. We can divide the growth contribution into four aspects: world growth, product advantage, market advantage and price competitive advantage. We divide the products into SITC26, SITC65 and SITC84, and divide the OECD market into North America (USA, Canada), East Asia (Japan, Korea), EU 15 countries and OECD countries. Through analysis, we can get an analytical structure of export growth factors, which shows that the growth of China's textile industry in the OECD market mainly comes from world growth (which has risen significantly after MFA) and price competitiveness (price competitiveness decline). The contribution of the market and product superiority is very small. The growth of the 15 countries in the EU mainly comes from world growth, and the contribution of product superiority is very large, and the price contribution is negative. ASEAN's price competitiveness is rising, and the contribution of product superiority is negative. All exporting countries have enjoyed the benefits of trade liberalization brought about by the growth of world textile trade. {page_break}

It can be clearly seen that the growth of China's textile trade mainly comes from the growth of Global trade in the process of trade liberalization, followed by price competitiveness. However, due to the rising cost of labor raw materials in recent years, price competitiveness has declined significantly in the past ten years, while the advantages of product structure and market structure have contributed little. This shows that the export growth of China's textile industry has so far depended mainly on scale and price competition.

In the post crisis era, in order to achieve a new round of growth and transform from a big textile country into a powerful country, we must adjust the industry (product) structure, optimize the market structure, and transform the traditional competition mode.