Situation and Problems of China's Textile Industry in the First Half of the Year

Business Club, September 10: From the beginning of 2010, China’s textile industry’s production, domestic sales, and exports all showed rapid growth in data performance. However, with the continuous appreciation of the With adjustments and other uncertainties, the textile industry is currently under pressure. While seeing the rapid recovery of the textile industry, we must also be alert to the uncertainties that we face in the second half of the year.

Basic information <br> <br> from the beginning of 2010, China's textile industry's production, domestic sales, export performance on the data showed a rapid recovery in growth momentum, however, with the continued appreciation of ***, export With the emergence of tax rebate adjustments and other uncertainties, the textile industry is currently under pressure. While seeing the rapid recovery of the textile industry, we must also be alert to the uncertainties that we face in the second half of the year.

1. The industrial added value dropped.

In the first half of the year, the added value of the textile industry increased by 12.2%, which was 4 percentage points higher than the same period of last year and 1.2 percentage points lower than that in the first quarter. In June, the textile industry increased by 9.8% year-on-year, down 2.2 percentage points from the previous month.

2. The price of cotton continues to be high, and textile companies are most worried about the lack of procurement channels and resources.

Domestic cotton and cotton yarn prices continued to rise. In June, the price of domestic cotton price index (328) was 18,309 yuan/ton, which was 838 yuan/ton higher than that in May, up 42.6% year-on-year. Qianqing market pure cotton yarn price was 28,500 yuan/ton, which was RMB 1,000/ton higher than that in May, up 60.1% year-on-year. Although cotton yarn prices rose faster than cotton in 2010, and sales were better, the benefits of textile companies were not affected much. However, cotton resources have been reduced, procurement has no channels, and resources have not been completed. Textile companies are most concerned about this situation.

3. The export situation continues to improve.

In the first half of the year, the value of export delivery increased by 16.3% year-on-year, an acceleration of 2.4 percentage points from the first quarter and an increase of 7.1% over the same period of 2008. In June, the value of export delivery increased by 19%, a 1 percentage point increase over May.

According to customs statistics, in the first half of the year, the country’s imports and exports of goods trade all achieved rapid growth, and the growth rate of imports exceeded the growth rate of exports. In June, the monthly export value and the total value of imports and exports hit a record high.

In June 2010, exports of textiles and garments continued to grow rapidly, and the growth rate of textile exports still exceeded that of clothing. Exports of textiles and garments totaled 18.67 billion U.S. dollars, an increase of 33.4% year-on-year. Among them, the textile export value was 7.09 billion U.S. dollars, an increase of 44%, and the apparel export value was 11.57 billion U.S. dollars, an increase of 27.7%.

In the first half of the year, the cumulative value of textile and apparel exports was 88.88 billion U.S. dollars, an increase of 22% year-on-year, of which textile export value was 35.65 billion U.S. dollars, up 32.3%, and apparel export value was 53.23 billion U.S. dollars, up 16%.

4. Profits rose faster and faster.

From January to May this year, the textile industry realized a profit of 70.1 billion yuan, an increase of 58.7%, an increase of 57.7 percentage points year-on-year; of which the textile industry achieved a profit of 41.8 billion yuan, an increase of 63.8%, and the garment and its manufacturing industries realized a profit of 20.2 billion yuan. 26.4%.

5. Investment growth is stable.

In the first half of 2010, the manufacturing industry for textiles and textiles, footwear and hats increased by 21% and 22.9%, respectively, which was 0.8% and 0.6% faster than the first quarter.

Main issues 1. The impact of the low base in 2009.

In the first half of 2010, China’s textile industry’s production, domestic sales, and exports all showed rapid growth in data performance. However, it’s worth noting that the low base in 2009 will, to a certain extent, cause major indicators for the beginning of 2010. The overestimation and the operating environment faced by the industry in 2010 are even more complicated, and there are many external factors of profit reduction.

2. Expected pressure on exchange rate changes.

The Ministry of Commerce has warned that it expects a slight appreciation in the year of ***. As far as the textile industry is concerned, the appreciation of *** has hit SMEs more, while the impact on large companies with stable customers and bargaining power is relatively small. At present, 80% of the domestic textile and garment export volume is settled in U.S. dollars, and the magnitude of the renminbi appreciation will have a serious impact on domestic textile and apparel exports. Excessive appreciation will greatly dilute the export profits of most of the OEMs or even lose profits, affecting the export enthusiasm of enterprises.

3. Raw material price increases to increase corporate cost pressures.

At present, the price of cotton has reached the highest level in history. There is a time lag when the upstream costs are transmitted to the downstream. It is expected that the textile companies will experience even greater cost pressure in the second half of the year. The price of cotton has gradually increased since October 2009 and it has reached 14,833 yuan/ton by the end of the year. As of June 30, 2010, the domestic 328 cotton spot index was 18,309 yuan / ton, 42.6% higher than the same period in 2009. The current upward trend in cotton continues.

4. The possible impact of policy adjustments.

A series of policy adjustments for export tax rebates may also involve the textile industry. On June 22, the Ministry of Commerce and the State Administration of Taxation promulgated the "Notice on Canceling Tax Refunds on Certain Goods Exports." From July 15th onwards, six major categories of 406 tax and commodity export tax rebates will be abolished. The industry is very worried that the future adjustment of export tax rebates will involve the textile industry.