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How Can Cotton Textile Industry Overcome Difficulties?

2012/7/6 10:51:00 49

Textile IndustryCotton And Cotton Prices

cotton

Textile industry

It plays an important role in the development of China's national economy. It spanning two major agricultural and industrial fields, involving cotton production, ginning, spinning, weaving, printing and dyeing, clothing and terminal consumption, has become one of the pillar industries of China's national economic development.


In recent years, China's cotton textile industry has developed rapidly.

As of 2011, the number of ring spinning, rotor spinning and loom in China reached 120 million, 2 million 320 thousand and 1 million 260 thousand respectively, and the spinning production capacity reached 50% of the total output of the world.

Industrial Enterprises above Designated Size realize industrial output value of 5 trillion and 478 billion 650 million yuan, an increase of 26.8% over the same period last year.

It has further consolidated the position of China's cotton textile power.

Although the cotton textile industry is developing at a high speed, the "three mountains" on its head are getting heavier and heavier. The cotton textile industry with high speed needs urgent burden reduction.


Structural imbalance: adjustment of quota system for Industry


From the perspective of domestic supply, China's

cotton

The planting is mainly distributed in the two major catchment areas of the Yangtze River and the Yellow River, and the Xinjiang producing areas. The output of the Xinjiang area accounts for 45% of the total output of the country. The output of the the Yellow River basin accounts for 25% of the total output of the country, and the Yangtze River Basin accounts for about 10%.


The cotton planting area is too centralized, which has a bad effect on the cotton textile industry.

Because the yield and quality of cotton are affected by weather factors, cotton planting is too centralized, which means putting eggs in a basket. If the climatic conditions are unfavorable for a year, the output and quality of cotton will be affected, so the cotton textile industry will be greatly affected.

The most typical example is that before and after 2010, due to extreme weather, cotton production in Xinjiang was greatly affected, and the national cotton textile industry suddenly cried out.


Although there are three major cotton producing areas in China, only cotton production in the Xinjiang producing area has formed a certain scale. The planting in other producing areas is lack of unified planning, which is greatly influenced by the price factors of last year. The planting area largely depends on the wishes of cotton growers and is not conducive to the overall stability of the cotton textile industry.


In terms of imports, the quota system is adopted in China's cotton imports.

According to the WTO agreement, China will import 894 thousand tons of cotton per year and 1% preferential duty, and 5% to 40% of the imported cotton imported from quotas.

The Levy of sliding tax is equivalent to setting the bottom line for the import cotton price. The purpose is to reduce the impact of imported cotton on domestic cotton market and ensure the cotton farmers' income.

However, there is a gap of nearly 3 million tons between China's cotton production and textile industry demand.

Cotton price

High and low, there are more than 2 million tons of cotton rigid demand through the payment of high sliding tax imports.


Quota system and sliding tax to some extent impede enterprises to use the market means for resource allocation, resulting in the high cost of China's cotton textile industry.

At present, Australia's cotton is 18000 yuan / ton, and India's cotton is more than 16000 yuan / ton. However, due to the quota system, enterprises can't import by themselves, while China's new cotton needs 21400 yuan to get the same quality cotton.


Looking forward to the analysis of the cotton textile industry research group of the foresight Industry Research Institute, to solve the current situation that cotton production is in short supply, we should first increase internal supply, start with cotton planting, and increase domestic cotton output.

Our country has a vast territory, putting eggs in multiple baskets, which can effectively reduce risks.

Especially in the two major producing areas of the Yangtze River and the the Yellow River River Basin, it is necessary to scale and standardize the cotton planting as soon as possible. The relevant departments should take effective measures to ensure the cotton planting area.

Secondly, I hope that the government can understand the current market situation as soon as possible, make corresponding adjustments to the import quota system and sliding tax, and give it to our national cotton textile industry as soon as possible.


It is difficult for enterprises to retain people and financing is difficult.


The new generation of migrant workers is exerting great influence on the labor-intensive manufacturing industry, and the textile industry is a typical example.

The survey shows that in 2011, the average wage of textile industry increased by more than 15%, but more than 80% of enterprises still had employment shortage.

According to the enterprise, the current generation of migrant workers is mostly the only child, whose family structure and growth environment are very different from those of the past.

Because the noise and smell of textile factories are heavy and the labor intensity is large, the salary is not high, which makes it difficult for enterprises to recruit workers and to keep them hard.


In addition, the rise of the western economy has aggravated the "labor shortage" of manufacturing in the eastern developed areas to a certain extent.

With the economic growth in the central and western regions of China, and the capacity pfer from some parts of the eastern region to the past, the employment demand of enterprises has increased significantly, which will inevitably lead to the withdrawal of labor force from the eastern coastal areas to the central and western regions, and even the emergence of "looting" in the central and eastern regions.

In addition to the economic rise, the labor force outflow in the central and western regions has caused the social security problems of the left behind personnel, as well as the high cost of living in the eastern developed areas and the aggravation of the pressure of living.


In order to retain labor, some enterprises choose welfare to keep people.

The general manager of a company said, "last year, the company distributed electric vehicles to every employee, and there were various small benefits in the month.

It is expected that corporate salaries will rise this year to retain staff.

It's not easy to stay, but to stay is victory. "


Forward industry research institute cotton textile industry research group said that with the rise of labor costs and the shortage of labor problems, some enterprises have built production bases to the relatively difficult areas such as the central and western regions, and even some enterprises have chosen to build factories in Burma, Kampuchea and Vietnam with relatively abundant labor force and relatively low labor costs.

This method also has a certain reference significance, whether it is suitable for the situation of the enterprise itself, and the factors such as the supplier position, the traffic logistics condition and so on.


Since 2011, financing difficulty has become another mountain in the top of the cotton textile industry.

In the survey of more than 500 enterprises in the textile industry federation statistical center of China, nearly 40% enterprises have more than 10 percentage points of financing interest rate than the bank benchmark interest rate. The textile industry lending rates in Shandong and other places generally float more than 30%, and quite a lot of enterprises are forced to accept the acceptance bill business.


The high loan interest rate leads to the continuous increase of the financing cost of small and medium-sized enterprises.

In addition, some banks charge management fees, consulting fees, quota establishment fees, loan commitment fees, loan arrangement fees, risk deposits and so on in a disguised form, increase the cost under the table, and ask for the loan amount to be used to purchase the financial products designated by banks, so as to increase the loan cost in disguised form, and increase the loan cost of the small and medium-sized enterprises by more than 30% compared to 2010.


Financing difficulties, for the banking industry, and even for the national economy, are nothing short of "chill out of the fire" and "fishing for money". Although the high interest rate can bring immediate benefits to the banking industry, but in the long term development, it has posed a great hidden danger to itself.

First of all, high interest rates will inevitably kill a group of cotton textile enterprises. The collapse of these enterprises will result in their loans being unable to recourse, which is the most direct loss to the banking industry. Secondly, the high interest rate has affected the operation of some enterprises, which will have an adverse effect on the whole cotton textile industry, which will eventually lead to the development of the banking industry. Thirdly, as an important pillar industry of the country's economy, the recession of the cotton textile industry will have a bad effect on the whole country's economy.


Looking forward to the analysis of the cotton textile industry research group of the foresight Industry Research Institute, the government needs to pay attention to the difficulties of cotton textile industry in real time and coordinate the relationship between banks and cotton textile enterprises.

Banks need to take a long view, not to be strong, but to lower their status, readjust their relationship with the cotton textile industry, solve the problem of financing difficulties in the cotton textile industry, and finally achieve a long-term win-win situation.

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