Serious Overcapacity In Textile Industry Leads To Business Difficulties.

Textile City, Shaoxing, another leading enterprise, Zhejiang longitudinal and horizontal group capital chain rupture collapse.

Insiders pointed out that most of the textile enterprises in China were too much in pursuit of scale, and the improvement of their ability was the main reason for the breakup of capital chain in the financial crisis.

In addition, the serious overcapacity of the homogenization of the textile industry has also led to the recent industrial downturn.

Following the closure of the three largest Chinese PTA company in Asia, which ended in late September, recently, another leading enterprise in the textile city of Zhejiang, Shaoxing, was broken up by capital chain. The initial capital verification showed that the group was insolvent and the deficit was 23 billion, and the chairman of the company was under surveillance.

According to statistics, since 2008, some of the textile industry accounts for relatively large areas, such as Zhejiang Shaoxing, Jiangsu Zhangjiagang Tong Qiao Town, Guangdong Dongguan and so on, the economy has been seriously affected, Hualian three Xin, Jiang long holdings, Jin Xiong Textile Group, Wuhuan spandex and other leading enterprises have been shut down and are on the verge of collapse.

Experts pointed out that behind this series of events, there is a commonality, that is, textile enterprises have indeed been in an unprecedented predicament.

Experts said that many textile enterprises in China are too much in pursuit of scale instead of strengthening their ability. They rely on bank loans to maintain the surface scenery of enterprises. Such an unhealthy business structure is bound to be devastated if they encounter similar problems, such as the sharp deterioration of the domestic and international economic situation in 2008, the downturn of the industry, and the tightening of state money.

Although in order to support the struggling textile industry, the government has used almost all the policy tools including raising export rebate rate, adjusting processing trade policy, reducing taxes and cutting interest rates, but the industry boom has not been significantly improved.

Experts stressed that when local governments are trying to save the enterprises that are on the verge of collapse, they need to cure the symptoms and cure them. We must recognize that the essence of the current textile industry's dilemma is the serious surplus of homogeneous production capacity. The global financial crisis is only aggravating and deteriorating, and this result is coming ahead of schedule.

Therefore, in solving the urgent need of enterprises, slowing down the rapid cooling of industries or the impact of business failures, we must lay the foundation for long-term development, and resolutely eliminate a number of competitive enterprises and prevent new potential crises in the future.

Statistics released by the National Bureau of statistics in December 10th showed that China's producer price index (PPI) in November increased by 2% over the same period last year.

The sharp jump in the PPI year-on-year growth rate is a lagging reflection of the economic downturn. Deflation is often accompanied by a large fluctuation of PPI. At present, deflation risks need to be closely watched.

In addition, the industry expects that the growth rate of industrial added value, which can best reflect the indicators of enterprise operation, will probably slow down to 5% in November, the lowest year-on-year growth rate in 14 years.

The growth of industrial added value will set a new low, which means that the macro economy will enter "severe winter".

After a sample survey of related enterprises, it is considered that in the background of the sharp decline in demand, the unsalable product and the backlog of inventory, the output of 2009 will also end for a period of 10 years and enter a full-scale stage.

Yang Jing: editor in charge