Those who have been working in the textile industry for a lifetime never expected that they would experience the double impact of a once-in-a-century epidemic and a global economic recession. As we all know, my country’s textile industry has always been led by textile exports and is the main force in obtaining foreign exchange. This year marks the final year of the “Thirteenth Five-Year Plan”. We originally wanted to make up for the losses caused by the suspension of production as soon as possible after the domestic epidemic was basically under control. However, the epidemic in Europe and the United States got out of control and the economy began to shut down. It can be said that the domestic textile industry has been hardest hit by the overseas epidemic. For a time, a large number of European and American foreign trade orders were canceled, and the textile foreign trade industry experienced a rare winter. Many companies have shut down due to the suspension of orders, and market turmoil and price drops are becoming a daily “distress” for manufacturers. The words “work suspension and holiday” are constantly popping up on the Internet. How to find opportunities in crises, adjust strategies, achieve industrial upgrading, survive the darkness before dawn, and walk out of a new world has become a top priority for industry colleagues.
The pressure is beyond imagination
The impact of this epidemic on the economy, to be honest, Most people are not mentally prepared. I originally thought that some of the larger well-known textile companies in the industry, with their strong strength and diversified operations, would only have temporary difficulties that would be overcome once they were overcome. But now it seems that there is no end in sight. The companies in operation are linking up one by one, and we can’t wait. You can’t afford to lose even if you get up. At the moment, the first thing companies have to consider is how to survive.
The author learned that a CEO of a textile machinery company in Jiangsu recently visited several well-known textile companies in Shandong, Jiangsu, Shijiazhuang, Hebei and other places. The CEOs of these textile companies are completely different from the two years ago. They used to be confident, chatting and laughing, and full of energy, but now their faces are clouded, they are depressed, and they are unwilling to accept customers. The chairman of Shenzhou was worried that not enough workers would return to work, which would affect order defaults, and he couldn’t sleep for several days in a row. At present, my country has the most complete clothing industry chain in the world. 60% of the world’s finished clothing products are produced in China, and the output value accounts for about 70% of China’s foreign trade surplus. The most closely integrated with this industry chain are international brand OEMs. The bosses of these factories are extremely anxious these days. The boss of a foreign trade company in Keqiao, Shaoxing said that the impact of the overseas epidemic is fatal. European factories have reduced orders and inventory backlogs, and half of the payment may not be recovered. The cash flow of many factories cannot last three months. As the epidemic worsens, the European and American markets are severely depressed and difficult to recover in the short term. In order to survive, many brands are eager to ship goods, and their bosses take the lead in selling products below cost in WeChat Moments.
The epidemic has disrupted normal operations
A 120,000-year-old man in Jiujiang, Jiangxi Spindle Cotton Spinning Factory is a manufacturer of specialty products for foreign trade. Even when the overall cotton spinning industry is at a low point and the Sino-US trade war has occurred, it has not been greatly affected. Most of its products are exported to Europe and the United States, and some to Africa. The profit per ton of yarn is higher than that of its peers. Two thousand yuan, the factory has not suffered a loss for more than ten years. Due to the impact of the epidemic, orders from the United States and Japan have basically disappeared. In particular, due to the obstruction of domestic logistics, the company suffered a huge loss in cotton procurement. It suffered serious losses in the first quarter of this year alone.
At present, production has initially returned to normal. However, after the production capacity gradually recovered, it was hit by two waves: the first wave was when cotton futures were hit by the third circuit breaker in the US stock market. The price of cotton futures fell from 14,300 yuan/ton to 9,930 yuan/ton, and the spot price fell by nearly 3,000 yuan/ton. Years ago, the factory had an inventory of more than 1,500 tons, with an average price of 14,150 yuan/ton. In addition, due to the epidemic, more than 1,000 tons of cotton in Xinjiang could not be brought back, resulting in an average loss of about 3,000 yuan per ton of yarn; the second wave of impact was that the goods could not be shipped and orders were destroyed. Or foreign orders may break contracts, cancel or be blocked by logistics, and there may only be sporadic small orders, which may lengthen the payment collection time by more than three times.
Talking about the experience of cotton procurement, the general manager of the company was filled with emotion. The payment for the cotton in Xinjiang was paid before the year, but after the year, the goods could not be shipped to Xinjiang. They were not allowed to enter at first, but then they were allowed in. The cotton transport driver was quarantined for 14 days and will be quarantined for another 14 days when he returns. After all this hassle and considering the various additional expenses (during the quarantine period) and transportation fees for traveling to Xinjiang, the driver is almost unbearable. The person in charge lamented: The one-size-fits-all management of the epidemic is like a drain on the company’s production rhythm. The epidemic policies of each province are different, and the arrival of personnel has been delayed for nearly a month.
The current orders are from a year ago, but the second half of the year is expected to be difficult. We are considering losing one ton per ton. In addition, several major customers have canceled orders, and temporarily cut production by half. Taking five days off in turns will be unsustainable unless the global epidemic is under control from April to June. The biggest worry is how far the epidemic will develop in the United States. If the U.S. economy goes as predicted by some economists and the intensity of the economic recession is much greater than the financial crisis in 2008, at least one-third of cotton spinning companies may not be able to survive this time.
An overview of the current situation of textile enterprises
Many textile enterprises such as cotton spinning mills are not Directly engage in foreign trade, but rely on well-known group textile enterprises facing the international market for OEM processing. For example, the vanguard and leading enterprises include Wuxi No.1 Cotton, Lutai, Huamao, Sunshine, Ruyi, Ningbo Shenzhou, Huafu, Baiy Long, Deyongjia, Yida, Bosideng, Youngor, Hailan, Shanshan, Semir, Dongdu, etc. all have this characteristic. Recently, the World Trade Organization predicted that this economic recession and unemployment may be more severe than the global financial crisis 12 years ago, and trade is expected to experience a severe decline.
The epidemic is disrupting global production, life and market rhythms. Consumption has shrunk significantly, and production capacity has��An important choice to try. On March 31, an online live broadcast titled “Director Sells Yarn” was held in the conference room of the Shandong Provincial Department of Industry and Information Technology. On March 14, more than 2,000 woolen textile companies in Dongguan City took the lead and opened live broadcast exhibition halls with the help of e-commerce platforms, and the number of consumers watching was considerable. The multi-dimensional display, strong interaction and authenticity of live broadcast can effectively alleviate the problem. Live broadcast is not only about selling goods, but also can realize various functions such as amplifying the sales ability of high-quality shopping guides, opening up multi-channels, and efficient member management, and helps brands refine their operational capabilities. promote. Facing the difficult situation, various clothing companies are actively seeking countermeasures. Most business owners said that the current primary goal is to survive first and wait for consumption to recover after the epidemic is over.
·Make predictions about foreign trade layout in advance
In order to reduce exports Risks should be placed in multiple baskets in advance to increase innovation. While the West is not bright, the East is bright. While adjusting the direction of exports, it is also developing innovative products, grasping with both hands and being strong with both hands. The export trade to Europe and the United States is temporarily deployed in other countries and regions. Shaoxing Gaogu Import and Export Co., Ltd. is dedicated to innovative research and development, making “Gaogu” products very consistent with overseas brand clothing manufacturers. The company has recently developed a 3D lace fabric, which is particularly popular with foreign customers. Countless people have come to inquire and request samples, and there are also many interested customers. Mass production will be available soon.
Go through difficult times with a positive attitude
·Macro policies have Loose economic and monetary measures were introduced
Not long ago, the G20 countries held a video conference call and announced that they would launch a US$5 trillion economic stimulus plan to respond to the impact of the epidemic on the global society and The negative impact on the economy and finance has, to a certain extent, boosted market sentiment. Interest rate cuts and quantitative easing at the monetary policy level have become the core of the current economic response measures of many countries. Emerging economies are no exception. The central banks of the Philippines, South Africa, Malaysia and other countries successively announced interest rate cuts on March 19. On April 3, the central bank made a targeted RMB 400 billion liquidity cut and lowered the interest rate on excess reserves to support the market. It was also the third RRR cut this year, with a total investment of RMB 1.75 trillion. In mid-to-late April, the re-loan and re-discount amount will be increased by 1 trillion yuan on the basis of the previous 500 billion yuan. In order to support the development of the real economy, promote greater support for small, medium and micro enterprises and reduce financing costs. Hou Bangan, deputy director of the Guangzhou Taxation Bureau of the State Administration of Taxation, said, “After the policy was released, tax refund declarations have been processed for 40 foreign trade companies, and the tax refund amount reached 147 million yuan.”
The Ministry of Finance and the Ministry of Transport issued policies announcing that from 0:00 on March 1 to 24:00 on June 30, port construction fees for import and export goods will be exempted. The Ministry of Commerce, in conjunction with the China Export and Credit Insurance Corporation, provides insurance for companies that suffer losses due to importers’ commercial, political and other risks in the process of operating export business.
·Domestic and foreign markets are developing simultaneously, waiting for the recovery of the international market
From the perspective of stable operation of textile enterprises, upgrading of industrial structure and balanced economic development, due to the worsening spread of the epidemic in textile export destinations and the increase in “breakpoints” in the international industrial chain, it is necessary to improve the layout of the textile industry chain in Southeast Asia during the temporary loss of the European and American markets. Open up the domestic industrial chain and supply chain and improve global rapid response and adaptability. Focus more on the maintenance and expansion of customer channels for foreign trade. When necessary, retreat to advance, explore the domestic demand-side consumer market, and wait for the recovery of the international market.
·Strong confidence and overcome difficulties
For employment and logistics , market and other factors that currently restrict textile production, it is necessary to think in multiple dimensions, make full use of multiple sales channels, diversified consumption areas, tap the potential of internal and external markets, and increase production capacity utilization in an orderly manner.
Textile enterprises must build confidence, trust the central government, trust the government, and have firm confidence in winning the battle against the epidemic and resuming work and production. It is expected that the market will not improve in the first half of this year. Be prepared for a long battle.
The COVID-19 epidemic is a disaster for mankind, but it is also an opportunity for the transformation and upgrading of the global industrial chain. China should seize the opportunity of the shutdown of some industries and economic recession in Europe and the United States, accelerate the “introduction of investment to replenish the chain”, and ensure the healthy development of industrial chain clusters. When foreign markets recover, international cooperation will be further strengthened, the scale and development quality of industrial clusters will be expanded, and the cycle of the global industrial chain will be driven.
The foundation for my country’s long-term macroeconomic growth will not change. Domestic macroeconomic policies will focus more on stabilizing growth and preventing risks, and will place a higher priority on improving the policy environment for small and medium-sized private enterprises. In response to the impact of the epidemic, the state has begun to introduce various support policies to help companies gradually ease their operating pressure.
The China Textile Federation has proposed policy suggestions to relevant government departments to ease the capital turnover pressure of enterprises as soon as possible, further reduce the burden on enterprises, and continue to ensure the resumption of work and production, and recommends studying and deploying plans in advance after the epidemic. Policy plans to activate domestic consumption and stabilize the competitiveness of export products. As long as colleagues work together, rely on all employees, and overcome all difficulties, we will definitely be able to usher in a new future. </p
