In Winter, Spinning Enterprises Do Not Move Because Of Cost Problems.

Recently, at the first ten forum held in Guilin,

The data provided by Wang Tiankai, President of the Federation of industry associations, showed that from 2011 to the first 8 months of 2014, the industrial added value of textile enterprises above designated size increased by 10.7%, 10.8%, 8.3% and 7.4%, respectively. The main indicators of textile enterprises above Designated Size have entered a single digit growth in the first 8 months of 2014, with 8.2% increase in main business revenue and 5.7% increase in exports.

Wang Tiankai said, data change shows that China's textile industry has entered the cycle of rapid growth to medium speed growth, and has begun to adjust the structure deeply and accelerate the pformation and upgrading of new stage.

Realistic pressure

Under the impact of cost increase and RMB appreciation, the pressure on China's textile industry to participate in international competition has increased significantly.

However, China's textile and garment industry's international market share remained stable at around 37%, due to the increase in the value added of export products and the opening up of new market channels by foreign investment and trade activities.

Zhang Yansheng, Secretary General of the national development and Reform Commission, told the economic observer that China's economy has entered a new normal and foreign trade will enter a new normal.

Since 2005, China's textile and garment industry has experienced three major impacts, such as the appreciation of RMB, the rise in wages of migrant workers and the anti-dumping sanctions imposed by the United States and Europe on China. Great changes have taken place. The production enterprises have improved their technological content. It is an inevitable trend to use machines and technologies to replace simple manpower and realize automation.

At present, the appreciation of RMB and the rising cost of labor still have a great impact on China's textile and garment industry.

Wang Tiankai said that in recent years, the cost of production factors in China's textile industry has continuously increased, and the per capita wages have increased at an annual rate of over 10%. The wage level is much higher than that of the developing neighbouring countries. Cotton prices have been higher than the international market for over three years in the past three years, and the cost advantage of the industry in international competition has basically ceased to exist.

This is a personal experience in the textile and garment industry giant Yida group.

Che Ketao, vice chairman and chief executive officer of Yida group, told the Economic Observer newspaper that the difference between cotton prices at home and abroad is more than 30%. The price of domestic cotton will lower our company's profits and slow down our competitiveness.

Over the past few years, the biggest pressure faced by Yida group is the impact of cotton price fluctuations, which is also the biggest policy uncertainty we face.

Yida group is a vertical integration.

The group covers cotton cultivation, spinning, weaving, dyeing and finishing, garment making, accessories, packaging and retailing. It has production bases in China, Malaysia, maurejus, Sri Lanka and Vietnam.

OEM (Foundry) is their main business mode. They supply more than 100 million shirts to world-famous fashion brands such as Ralph Lauren, Tommy Hilfiger and Nike every year.

With the change of international market in recent years, the business strategy is also changing.

Although they are highlighting the high cost of China's domestic market, so far, the ratio of sales to domestic sales has exceeded 12%, compared with almost ten years ago.

At the same time, their market share in the United States is shrinking rapidly, and the sales ratio has dropped from 70% to 40%.

Che Ketao said that the structural change is still very large.

In the past, it was done by OEM and OEM, but next, we should do OBM, that is to say, we should make our own brand.

China's domestic demand and consumption capacity has been growing strongly, and we have great confidence in domestic economy and domestic demand.

Difficulties in pformation

But not all of them.

Enterprises have such confidence, which needs to face more and more pressures and challenges.

Wang Tiankai said that in the face of the prominent contradiction between resources and environment, the Chinese government is more stringent in terms of monitoring standards and tasks for low-carbon and environmental protection.

Although the textile industry has significantly decreased in terms of unit added value, carbon dioxide emission intensity and unit value added water consumption, there is still a certain gap between the absolute level of energy consumption and resource consumption compared with developed countries.

The progress of emission reduction of main pollutants in the industry is relatively slow, and there is still a certain gap between the government's demand for emissions and the government's pressure on the emission reduction. The completion of the task in 2015 is much greater than the total constraint of 10% emission reduction in 2010.

In Wang Tiankai's view, labor cost, raw material cost and environmental protection pressure are the main pressure placed on China's textile and garment enterprises.

He said that speeding up industrial pformation and upgrading, enhancing total factor productivity and sustainable development capacity, effectively breaking the bottleneck of resources and environment, and better participating in international market competition and global industrial division of labor are urgent tasks facing China's textile industry.

More and more textile enterprises have chosen to upgrade technology upgrading as a password to break through the above problems.

"In the future, we will raise the level of science and technology as our main direction of development," said Che Ke Tao.

Although China's labor costs are rising, this is a good thing and not a bad thing.

From the point of view of enterprises, we are not looking at labor costs, but workers' work efficiency.

In fact, in recent years, Yida group has gone abroad to expand, not just to choose cheap labor force, but to consider all aspects.

We can't keep moving because of labor costs, which is not a fundamental solution after all.

In China, Che Ke Tao and Yida group are ready to welcome the new normal.

He said, in fact, China must have this strength to maintain 8% growth, but past facts show that every stimulus plan will leave behind some sequelae and will bring many imbalances.

So, I think the government is doing a good job and maintaining a steady growth of about 7%.

This is a remarkable pformation, because there is a very important task of economic restructuring.

But structural adjustment is not a simple matter for some textile and garment enterprises.

Zhang Yansheng believes that the current structural adjustment is the whole industry of China's textile and garment industry.

This process will be more painful, and quite a lot of enterprises will withdraw from the market.

But for the industry, only part of the enterprises quit, will further enhance competitiveness, so that those with innovative ability to survive and continue to develop.

In Zhang Yansheng's view, the development of Chinese textile and garment enterprises in the past is very good, but it still depends on low price and low cost.

The next 30 years will usher in a golden 30 years, but most of the textile and garment enterprises will be faced with a shortage of workers, lack of orders and lack of technology.