Henan'S Textile Industry Has Rushed Out Of The Financial Crisis.

The textile industry is one of the traditional dominant industries and economic pillar industries in Henan province. The stable and healthy development of the textile industry plays an economic role in ensuring employment, promoting economic growth and maintaining social stability.

However, influenced by the external effects of the financial crisis, the continued appreciation of the renminbi, the lowering of the export tax rebate rate, the rise in prices of raw materials and energy, and the increase of wages and social security funds, the textile industry in Henan is facing an unprecedented grim situation.

Henan textile industry is one of the pillar industries of Henan's economy.

At present, the total number of spindles in the province reaches 14 million 200 thousand, accounting for 14.2% of the total number of spindles in the whole country, ranking third in the country.

In 2008, 1194 Textile Enterprises above Designated Size in Henan province made 2 million 500 thousand tons of yarn per year, ranking the top in the country. In 2007, Henan textile industry had a good production and operation situation, and realized a profit of 8 billion 10 million yuan in the whole year, an increase of 88.5% over the same period last year.

But since 2008, the production and operation situation of the textile industry has changed, although the output has increased, but the efficiency has been reduced.

Economic efficiency began to decline sharply, and the whole industry situation is facing a severe test.

This is manifested in two aspects: 1, the output of main products is increasing and the rate of increase is slowing down.

In the 1-6 month of 2008, the province's textile enterprises above Designated Size produced 1 million 544 thousand tons of cotton yarn, an increase of 35.3% over the same period last year, 1 billion 150 million meters, an increase of 13% over the same period last year, and 170 million garments, an increase of 65.7% over the same period last year.

The cumulative value of industrial added value was 6 billion 130 million yuan, an increase of 153.3% over the same period last year, sales revenue of 47 billion 485 million yuan, an increase of 43.3% over the same period last year, a tax increase of 2 billion 140 million yuan, an increase of 51.2% over the previous year, a profit of 3 billion 310 million yuan, an increase of 48.1% over the same period last year, and an increase of 42 percentage points compared with 90% increase in the same period last year.

By the end of June this year, 1194 Textile Enterprises above Designated Size had increased by 120 over the end of 2007, increasing by 257 at the end of 2006.

Therefore, the increase in production and efficiency is mainly due to the increase in the number of enterprises and the result of investment promotion.

2, the deficit has expanded and the amount of losses has increased.

By the end of June, the average profit margin of 30% of textile enterprises in the province was below 3%, and the average profit margin of 60% enterprises was only 0.73%.

In the province's textile enterprises above Designated Size, there were 124 loss making enterprises, an increase of 8.77% over the previous year, with a deficit of 10.39%, which was 10.15 percentage points higher than the national deficit.

Two. The main problems and causes of Henan textile industry. From a macro perspective, the implementation of the state regulation policy and the promulgation of the new labor contract law have had a great impact on the production and operation of textile enterprises.

1, the increase in the reserve requirement ratio and the tightening of interest rates on loans and loans have restricted the development of enterprises.

In 2007, the central bank carried out 10 bank reserve ratios and 6 interest rate hikes, resulting in a contraction in the size of bank credit and continued slowdown in loan growth.

Take Zhoukou as an example. By the end of June, the total amount of loans of various financial institutions in Zhoukou was 47 billion 194 million yuan, an increase of 5.9 percentage points lower than that of the same period last year.

In total loans of 47 billion 194 million yuan, industrial loans were only 5 billion 490 million yuan (140 million less than the beginning of the year), accounting for only 11.63% of the total loans.

Secondly, credit funds are tilted to the dominant industries and key enterprises. Most of them flow to project construction of pportation, warehousing, power and telecommunications industries and a few key enterprises.

Textile industry is more difficult to finance because of its declining efficiency, sluggish sales and slow capital recovery.

Most of the above 1194 textile enterprises in the province lack financial support and have difficulties in operation.

According to the requirements of the industry management, cotton production in enterprises usually has a reserve of 3 months, but now many enterprises need only a few days to stock the needed cotton.

In addition, the price of raw materials is rising, and the price of products is weak. In order to speed up capital turnover, enterprises can only sell capital or lose money.

Wugang Silver Dragon Textile Co., Ltd. is a textile enterprise with 300 thousand spindles. In the past, its products had been zero inventories. Since July 2007, there has been inventory and production and sales rate has dropped.

Textile enterprises in Zhengzhou increase their losses by 200-400 yuan a month.

Some are unable to pay for water, electricity, gas and co-ordinate funds, and will be forced to stop production.

The small textile enterprises of Xinye County, which are more concentrated and larger in quantity, have lost 1/3.

2, energy and raw materials prices continue to rise, labor costs rise, enterprises are overburdened.

Zhumadian coal price rose from 540 yuan last year to 860 yuan, or 59.3%, and electricity price rose 0.025 yuan, or 5%.

According to the labor contract law, the labor cost of enterprises has increased by more than 20%.

Such as the South Zhongtian Textile Co., Ltd., with an annual electricity consumption of 36 million degrees, the electricity price rose by 0.025 yuan, the annual electricity consumption cost increased by 900 thousand yuan, the oil price rose by 0.9 yuan per litre, resulting in the increase of pportation cost. The company's annual pportation of cotton and other raw materials was 18000 tons, the annual freight increased by 1 million 167 thousand yuan; the implementation of the new labor contract law, the worker's salary increased by 100 yuan per person, and the annual increase cost was 2 million 200 thousand yuan.

In the first half of this year, the total cost increased significantly, compared with the same period last year, the profit decreased by 45.2%.

Even so, the labor and employment of the company is still very tense, recruitment difficulties, lack of 300 workers.

3, RMB appreciation, export tax rebate rate reduction, export enterprises in trouble.

Since January 2008, the RMB has appreciated by 4.27%. It is estimated that the annual appreciation will be around 10%. If the renminbi rises by one percentage point, the exchange rate of the textile export enterprises will be one percent. At the same time, the export tax rebate will be reduced from 17% in 2004 to 11%.

According to the calculation, only one year in 2007, the textile enterprises in the province digested the new cost of 2 billion 90 million yuan.

Export tax rebates will be reduced and export enterprises will not be able to support them.

For simple export enterprises, the more exports, the more money they lose.

Take Xinye textile Limited by Share Ltd as an example, in 2005, the export tax rebate rate was 15%, 1 yuan to 8.27 yuan, equivalent to 9.51 yuan; in 2007, the tax rebate rate was 11%, 1 yuan was converted to 6.98 yuan, which was 7.75 yuan; in 2007, compared with 2005, 1 yuan per export, the net profit dropped by 1.8 yuan, the market digested 0.5 yuan, still dropped by 1.8 yuan, according to the company's annual export dollars, the annual profit reduction was more than RMB yuan.

Nanyang Magnolia Home Textile Co., Ltd. cut its export rebate rate by 2 percentage points, affecting millions of yuan in one year.

4, "high levy and low deduction", the cost of enterprises is increasing.

The main raw material of Henan textile enterprises is cotton, which accounts for more than 70% of the total cost of production.

At present, the output tax rate of cotton textile enterprises is 17%, while the cotton purchase tax deductible tax rate is only 13%.

The total annual cotton consumption is 2 million 520 thousand tons (to be verified), the total cost increased by 1 billion 420 million yuan.

5. Imported cotton is quasi tax, and the enterprise tax is heavier.

Since 2008, the sliding duty has been reduced by 1 percentage points, but the price of imported cotton is still higher than the domestic market of 1063 yuan / ton, and the domestic cotton price has been 1000 yuan / ton higher than that of the same period last year.

It is estimated that in 2006-2007 years, the average sliding rate of imported cotton has reached 10% in real terms.

The import cotton is much higher than the domestic cotton price for a long time. It has lost the significance of the sliding tax, but it has played a role in increasing the tax burden of the textile enterprises.

According to the survey, the Xiangcheng Cotton Textile Co., Ltd., the enterprise in the same industry in the province is of the highest level, the equipment domestic first-class, some of the key equipment world-class, spinning scale of 100 thousand spindles.

In 2007, a total of 18000 tons of cotton yarn were produced, with a profit of 16 million yuan and a tax of about 30000000 yuan. The quality of products reached 25% above the Ulster communique, and sales and sales were flourishing. The products had good reputation in the market.

But since 2008, the environment of production and operation has changed a lot. The main raw material cotton has risen by 700-1000 yuan / ton compared with the same period last year, and the wages of workers have increased by 100 yuan per person per month, the electricity price has risen by 0.0306 yuan per ton, and the cost of ton yarn has increased by 500 yuan.

The sharp rise in costs has made production difficult for enterprises.

In the 1-6 month of 2008, the company only realized profit of 10 thousand yuan and was at the edge of losses.

What is more serious is that the sales of products are not smooth now, the prices are not going up, and the sales volume is not up.

Even if the price is reduced, the product will not sell well.

In July this year, 25% of the production was closed down. Recently, enterprises held more than middle-level cadres' meetings. They clearly indicated that 50 thousand ingots had been shut down from August 1st, and workers had been on holiday, and the scale of discontinued production reached 50%.

This is a good enterprise in the textile industry of the whole province. The enterprise mechanism is good, the ranks of cadres and workers are stable, the equipment is advanced, the management level is high, the product quality is good and the grade is high.

The same is true of the enterprise, and the difficulties of other enterprises can be imagined.

In 2008, the economic crisis that affected the world first spread to the textile industry. After the US economic recession, China increased its trade protection measures to a certain extent, thereby weakening the competitiveness of Chinese textiles in the world. Data show that the overall profit margin of China's textile industry is 3.9%, coupled with the reduction of export tax rebates, and the appreciation of the renminbi will inevitably further reduce the profit margins of textile enterprises.

Three. The way to break through the difficulties of Henan's textile industry is that the power to pull economic growth is generally recognized as the "three carriages" - export, investment and consumption. In recent years, China's economic growth has been mainly dependent on exports and investment. The dependence on external demand for the economy has been as high as 70%. Under the background of the global economic recession and the impeded export growth, it has become realistic and urgent to start the domestic market demand to seek new impetus to economic growth.

1, promote consumption through livelihood investment.

At present, the central government has clearly proposed the policy guidance for increasing residents' income and expanding consumption. The government departments at all levels are also fully implementing the policies of the central government to improve the incomes of residents, especially farmers and urban and rural low-income groups. The orientation of people's livelihood has increasingly become the major drama of governments at all levels. Expanding domestic demand is undoubtedly the direction and key point of Henan's textile industry.

According to the relevant data, the per capita textile consumption in China's urban areas has increased from 7.5 kg in 2000 to 14.6 in 2007, and the proportion of textile industry's domestic sales has increased from 60% in 2000 to 70% at present.

In contrast, the per capita consumption level in developed countries is 30 to 40 kg, which is more than two times the current level in China.

This means that the market potential of China's textile domestic demand is still huge, and the total consumption of the 1 billion 300 million population determines that the domestic demand market must rely on the domestic textile industry. Henan is the largest population province in the country, and its energy can be imagined by increasing consumption level and increasing demand.

At the same time, we must tap the vast rural market. The rural areas not only provide the market and labor force for the textile industry, but also combine investment direction, expand domestic demand with the actual interests of the masses, combine with the actual needs of the masses, and try every means to raise the income of the masses and increase the employment opportunities for the masses.

If farmers have jobs and incomes, the desire for consumption can grow, and there will be a bigger market for textile and clothing products.

The expanding domestic demand market policy will play an important role in the development of the textile industry and will become the fundamental driving force for the textile industry to go out of its current predicament and achieve further improvement.

2, promote consumption with independent brands.

It is impossible for textiles to have no market. The key is to continuously develop new products, increase new varieties, improve the quality of products, open up new markets, diversify the market and enhance competitiveness.

That is to say, in the future development of textile industry, we must invest our energy and limited capital in technology and brand, that is, we can adjust the investment structure, industrial structure and resource structure to achieve the pformation of growth mode.

Speeding up independent innovation and promoting the construction of independent brands is an important measure to promote domestic demand and maintain steady and rapid economic growth. It is also an effective way to change the way of development and enhance the stamina of enterprises and economic development.

To enhance the industrial innovation capability as the core, to raise the contribution rate of science and technology and brand is the two motive force to solve the bottleneck problem of development and to build a strong textile province.

3, seize the opportunity to undertake the gradient pfer smoothly.

The middle part of Henan is the pition zone of the East and west economy, and it is also the important point of the pfer of the coastal economy to the West.

With the adjustment of economic structure, the development of China's textile industry is shifting from the eastern coast to the central and western regions. In this pfer, Henan's important position is very prominent, so we must make full use of the advantages of many parties.

First of all, it has a brilliant foundation for textile industry; secondly, it has a large and skilled textile industry team; third has many textile machinery manufacturing enterprises; the forth has profound textile culture, and has formed a nationwide sales network.

Relying on these advantageous advantages, Henan textile enterprises will have a bright future.

4, adjust measures to local conditions, group development.

Take Zhengzhou as an example. Once upon a time, Zhengzhou was once one of the six major textile bases in the country. The state invested more than 50 yuan 50 years ago. In Zhengzhou, 6 national (6, 1, 2, 3, 4, 5, 6) national cotton mills were established. These cotton mills have been accumulated as national profits tax in recent years.