Editor's note: Textile companies, regardless of their size, face the tangling of survival under the pressure of the increasingly tight funding chain. The fluctuations in raw material prices, the increase in the proportion of inventories, the shortening of supply and demand billing periods, tight cash flows, increased risk of market defaults, difficulties in financing, and high costs have become a true reflection of the pressure on the capital chain of textile companies, especially small and medium-sized enterprises.
The capital chain pressure is the most prominent issue in the textile industry's ability to survive.
Looking back to 2011, China’s textile industry is not booming due to the debt crisis in Europe and the United States; it is affected by the difficult transition of cost pressure, the weak downstream demand in the textile market, and slow inventory destocking. Even if individual varieties have a technical correction, the overall situation is still not optimism. In the external environment where the pressure continues to increase, the industry’s main aggregate indicators have taken a new stage of development. However, the market sentiment has steadily declined, the growth rate of major indicators has slowed down, and the market share of major exporting consumer countries has increased. Decline, slow sales of domestic department stores, etc., have all become the data clues for the gradual increase of the difficulty coefficient of the enterprises under the increasingly tense atmosphere of the capital chain.
In 2011, China’s monetary policy was the primary objective of curbing inflation, and the direction of adjustment was “steady†and “austerityâ€. The deposit reserve ratio that has been raised to more than 20% and the strict ** index control of commercial bank systems by the branches and sub-branches of various localities directly lead to the appearance of “money shortageâ€. The prevalence of private lending and the "robbing" interest rates with annual interest rates of up to 100% in informal financial activities are in fact related to the objective reality that the formal banking system is unable to provide services in the context of severe austerity.
With the central bank strictly controlling liquidity, some SMEs have been forced to switch to the more expensive "underground financial" market, and private lending rates in some areas have risen to historical highs of 100% per annum. According to the data from the National Bureau of Statistics, in 2011, the loss of textile enterprises above designated size reached 9.8%, and the growth rate of loss amount was as high as 92.31%; during the same period, the average profit rate of textile enterprises above the designated size was 5.54%, and the profit rate of enterprises below the scale was The level of loss is less than ideal.
Many banks have reduced their enthusiasm for large and medium-sized enterprises, and have generally implemented more than 20% of the benchmark interest rate, which has led to a significant increase in corporate financing costs. For example, according to data from Jiangsu Province, in the first three quarters of 2011, the number of small and micro enterprises newly added to the single-family credit line of less than 5 million yuan in the province accounted for a new proportion, a decrease of 2 percentage points over the same period of the previous year, and the cost of financing increased by 31.4% year-on-year. %.
Against this backdrop, textile companies, regardless of their size, are faced with the struggle to survive under the pressure of the increasingly tight capital chain. The fluctuations in raw material prices, the increase in the proportion of inventories, the shortening of supply and demand billing periods, tight cash flows, increased risk of market defaults, difficulties in financing, and high costs have become a true reflection of the pressure on the capital chain of textile companies, especially small and medium-sized enterprises.
Some companies have been pressured by funds to have to sell goods at low prices in order to compete for the market and in exchange for liquidity, in order to solve the burning needs. Even some companies have reported that the potential for internal tapping is approaching the limit, but the profit margin of the industry sales is low. After deducting expenses, the amount of money earned is less than the interest rate, and it can only be scaled down.
The financial pressure caused by costs continued to increase in 2012.
According to data from the China Federation of Logistics and Purchasing, the purchase price index of major raw materials in February was 54.0%, which was a substantial increase from the previous month by 4.0 percentage points. This index, after falling below 50% for three consecutive months in October last year, was above the critical point in January of this year and jumped above the critical point in February.
The "2012 Preliminary Interim Cotton Storage and Storage Plan" recently issued stipulates that the closing storage price for 2012 will be 20,400 yuan per ton, an increase of 600 yuan per ton over the previous year, and will set a reserve price for domestic cotton use by textile companies in the new cotton year.
At the same time, the continued rise in energy and power costs and labor costs, as well as the pressure of energy conservation and emission reduction, have also gone straight to the “money†issue.
However, it must be noted that factors such as accelerating urbanization, rising residents' income levels, and policy support will boost the domestic demand market to continue to grow steadily. The monetary policy environment in 2012 will also show signs of relaxation. These will all become important supporters of the industry's economic indicators.
The rest is waiting for the industry to take advantage of opportunities...
In 2011, the “money†issue in the mine-relief market was in a downturn in the economy. In 2011, the overall prosperity of the domestic textile market was not high. The business climate of the entire industry chain continued to be sluggish, and the trading volume remained at a low level. As a result, the production and sales ratio of textile companies is difficult to increase, and the inventory backlog has become increasingly fierce. Some companies have been pressured by funds to sell goods at low prices in order to compete for the market and exchange capital.
As a well-known textile and apparel fabrics market in China, the market and direction of Keqiao China Textile City has always been of concern to purchasers of domestic surface materials and textile and garment operators. According to the China Keqiao Textile Index, the overall prosperity index, overall market sentiment index and total production index of the Keqiao market have significantly declined from those of 2010. By December 2011, Keqiao's overall market sentiment index was 1343.96, which was a decrease of 74.87 compared with the same period of 2010; the overall market sentiment index was 1064.28, which was a decrease of 31.72 compared with the same period of 2010, and the total production index was 1685.68, which was lower than the same period of 2010. 102.36.
According to the comprehensive calculation of the China Textile Industry Federation’s entrepreneurial tracking survey data, although the entrepreneur confidence index and industry climate index of China's textile companies are in the expansion range in 2011, they have also shown a trend of slowing down.
Export "money" questions China's manufacturing has fallen into the order minefield affected by the economic downturn. Consumer confidence in the United States, the European Union, Japan, and other markets is low, the global demand for imports has declined, and the performance of imported products has become more affordable. Sensitive, making the weaker international market demand more obvious.
At the same time, due to the impact of comprehensive cost factors, some market orders in the United States, Europe, and the United States were diverted to Southeast Asian countries and other rival countries. At present, Pakistan, Bangladesh, Turkey and other countries are consuming China's textile and garment export "cakes" with far lower cost advantages than China. According to relevant information, at present, labor costs in India, Pakistan, and Vietnam are only equivalent to 38% of the cost of labor in China, and the cost of raw materials only accounts for 70% of domestic consumption. Under the condition that the cost-price advantage has been severely weakened, China's textile enterprises are under greater pressure in terms of funds and other aspects of the international market's order competition. Many companies have also been forced to abandon some long-term orders and large orders, and choose short-term orders and small single-products to speed up the flow of funds and reduce the pressure on export operations.
Over the years, “Made in China†has a solid position in the international market. Even if the last financial crisis raged in 2008, the share of China’s textile and apparel products in the three major markets of the European Union, the United States, and Japan continued to grow. However, in 2011, China’s textile and apparel products fell in the import market share of the three major economies. This is also the first time since the accession to the WTO that the share of textiles and apparel in the three major markets has fallen.
According to the data released by the Office of Textiles and Clothing of the US Department of Commerce (OTEXA), from January to November 2011, the United States imported a total of 23.36 billion square meters of textiles and clothing from China, and reached US$37.89 billion, accounting for 46.8 percent of its total imports and imports respectively. % and 40.2%, representing a decrease of 0.1% and 1 percentage point respectively over the previous year.
According to EU statistics, from January to October 2011, the EU imported textiles and clothing worth 55.08 billion U.S. dollars, accounting for 41.7% of its total imports, representing a decrease of 1.2 percentage points over the previous year.
According to data from Japan's Ministry of Industry, Japan imported 31.59 billion U.S. dollars in textiles and apparel from China in 2011, accounting for 74.9% of its imports, which represents a decrease of 2.2 percentage points over the previous year.
Domestic "money" questions consumer willingness to encounter prices minefield Although the domestic market has been the main support for the development of China's textile industry for many years, and from China's social consumer goods retail classification data, it also shows that China's textile and apparel sales market is booming. However, in 2011, the inflationary pressures that plagued ordinary people are still very high.
National Bureau of Statistics data shows that in 2011, China's consumer price increased by 5.4% year-on-year. Although from July 2011 onwards, subject to several stringent monetary policy adjustments such as the deposit reserve ratio, CPI has entered a downward track. The year-on-year increase has decreased month by month, but it has remained above 4%. The first living experience that inflation brings to us is the rising cost of living. This disrupts the normal rhythm of consumer spending and also inhibits people’s desires.
The key department store monitoring data of the China Business Data Center shows that in 2011, the sales volume of large-scale retail department stores in China only showed single-digit performance, and it also showed a trend of slowing down. It can be seen that under the pressure of high inflation, the people are more sensitive to product prices and consumer choices are more cautious.
The increase in the price of products that consumers feel personally is not only due to the increase in costs in the production process, but also to the circulation of “access feesâ€, “merchant depotsâ€, shopping mall rentals, and various “public relations feesâ€. Pressure will eventually be included in clothing prices. The cost of retail channels in general clothing is about 30% or more. To enter the mall, garment suppliers first pay the entry fee, which depends on the grade and size of the mall, and mainly includes mall poster fees, promotional fees, default fees, storage fees, advertising fees, and other dozens of items. In addition, mall deductions have a greater impact on apparel pricing. The demerit points of shopping malls are related to their geographic location, passenger flow, and the purchasing power of passengers, and they generally float between 15% and 35%.
It can be imagined that under the state of pressure superposition, enterprises survive more and more “poorlyâ€, and the development of brands (especially growth brands) is increasingly “poor†and must be digested with product price increases. The price is stepping on the consumer's price-sensitive area and will inevitably bring about an impact on the sales volume.
The unbalanced flow of macro “money†problems has led to the development of minefields. According to the report of the Central Bank, at the end of 2011, the balance of broad money supply M2 was 85.2 trillion yuan, a year-on-year increase of 13.6%, and the growth rate was 6.1 percentage points lower than the previous year. The balance of ***** increased by 15.8% year-on-year, 4.1% lower than the previous year, and an increase of 7.47 trillion yuan from the beginning of the year. In 2011, the size of the social ** scale was 12.83 trillion yuan, of which bond ** increased significantly.
Looking at the total amount, the overall liquidity in China's real economy is still relatively abundant. However, ample amounts do not equal structural equilibrium. In fact, there is a wide and uneven distribution of liquidity between different industry sectors and different companies. The textile industry originally accounted for a relatively small proportion in the bank's financing system. In 2011, it raised the rate of deposits and interest rates for many times, making the textile industry more and more difficult to finance large and small companies.
Data Source: Central Bank Information In 2011, China’s macroeconomic policy turned to control inflation, and the central bank continuously reduced its liquidity. After the first announced increase in deposit reserve ratio by 0.5 percentage point from January 20, the reserve ratio has been adjusted to a historic high in the first half of the year. This has controlled the inflationary situation to a certain extent and increased the supply of funds. pressure. Raising the deposit reserve ratio six times, a total of about 2.4 trillion yuan was contracted, and bank credit funds were directly affected. In order to prevent risks, the central bank also increased its assessment of the average daily deposit and loan ratio of banks.
Many banks have reduced their enthusiasm for large and medium-sized enterprises, and have generally implemented more than 20% of the benchmark interest rate, which has led to a significant increase in corporate financing costs. For example, according to data from Jiangsu Province, in the first three quarters of 2011, the number of small and micro enterprises newly added to the single-family credit line of less than 5 million yuan in the province accounted for a new proportion, a decrease of 2 percentage points over the same period of the previous year, and the cost of financing increased by 31.4% year-on-year. %.
Under the “high pressure†of the deposit reserve ratio constraint and the daily average loan-to-deposit ratio, domestic commercial banks’ loanable funds appear to be decreasing. The unprecedented tightening of monetary policy and the strict control of commercial banking systems by local branch offices have directly led to the appearance of “money shortageâ€.
** "Money" Topic Cost Exceeding Profits Exploding Profits In the context of tight credit, banks' bargaining power has increased significantly. Some banks have adopted a strong way of raising interest rates and accepting acceptance ** to issue ** to enterprises, which has significantly increased the ** cost of textile companies. For small and medium-sized enterprises, because of the small scale of operations and some of the reasons for their own operations, it is difficult to succeed in the banking industry, and they are forced to choose the way they work.
It is understood that SMEs have been forced to switch to the more expensive "underground financial" market under strict control of liquidity by the central bank, and private lending rates in some areas have risen to historical highs of 100% per annum.
According to the data from the National Bureau of Statistics, in 2011, the loss of textile enterprises above designated size reached 9.8%, and the growth rate of loss amount was as high as 92.31%; during the same period, the average profit rate of textile enterprises above designated size was 5.54%, and the profit rate of enterprises below the scale was The level of loss is less than ideal.
In 2011, the profit growth of textile enterprises above designated size was not guaranteed. The interest rate kept rising, which made many companies not rich enough to afford it. After the latest interest rate hike, the current one-year benchmark interest rate of the Central Bank has reached 6.56%. According to a large-scale textile company, in 2011 the company's interest rate at the bank ** no longer implements the benchmark interest rate, but rises by 30% to 50%, with a maximum annual interest rate of nearly 10%. The person in charge of the company said with emotion that the internal potential of the company is nearing the limit, but the profit rate of the industry sales is relatively low. After deducting the expenses, the money earned is less than the interest, and the company can only compress the scale. Even if you can borrow money, you can't afford it. **Cost exceeds **return, what ability does the company develop and develop?
Resource "money" questions Many mountains almost equal to the cost of minefields. When enterprises are unable to make money, they include the cost of labor, energy and power costs, and energy-saving and emission reduction.
In the first year of the “Twelfth Five-Year Planâ€, the improvement of people’s livelihood continues to receive attention. The increase in residents' income must outperform the growth rate of GDP and become an important brush in the work reports of many province governments. Let people's "bags of money" swell as soon as possible to become a new direction for the distribution of people's livelihood. According to the National Bureau of Human Resources and Ministry of Health, in 2011, a total of 24 provinces across the country adjusted their minimum wages, with an average increase of 22%. In 2011, the monthly average income of migrant workers in China exceeded the 2,000 yuan mark for the first time, reaching 2,049 yuan, an increase of 359 yuan over 2010, an increase of 21.2%. The increase in the wages of workers is the most direct manifestation of labor-intensive enterprises in terms of rising labor costs. Although many textile companies have actively responded by expanding markets, improving efficiency, and strengthening technological transformation, labor-intensive companies The industry property determines that the issue of labor costs will go hand in hand.
In 2011, the national index on the value of clothing and industrial products rose by 4.2%, while the price index on the purchase of fuel and power rose by 10.8%. The increase in the purchase price index of raw materials was also much higher than the rise in the ex-factory price of industrial products, which severely squeezed the profitability of enterprises.
Starting from June 1, 2011, the prices of electricity for industry and commerce and agriculture in 15 provinces and cities nationwide have risen by about two cents per kWh. On December 1, the National Development and Reform Commission announced that it will increase the price of electricity, and the national sales price will increase by an average of 3 cents per degree. The price of residential electricity will not be raised temporarily. The increase in prices will increase the cost of electricity for enterprises.
Although China's textile industry has made some progress in energy saving and emission reduction in recent years, with the rapid growth of the textile industry and the continuous expansion of the company's scale, as well as national and local standards for energy conservation and emission reduction, China's textile industry has achieved energy conservation and emission reduction. The overall situation is still severe, and it is a long-term task for textile companies to maximize the use of resources and reduce environmental pollution.
Industry chain "money" cash flow tight alert book surface minefield under tight pressure of the capital chain, the increase in the proportion of inventory and capital, supply and demand side account period, cash flow, market default risk and other issues make the lack of money companies Dangerous situation. In the past, fabric suppliers could give companies a one-month billing period. Today, they are "one-handed, single-handed delivery," and they must pay 30% deposits more than ten days in advance. In 2011, the upstream and downstream funds of the textile industry were tight – fabric suppliers had to pay cash for cotton, and garment manufacturers had to pay cash for fabrics. Problems such as tight cash flow and shortened billing periods of supply and demand have become an important manifestation of the tightness of the industry's capital chain.
In 2012, the pressure of difficulty in the beginning of PMI showed signs of greater pressure. Although the central bank announced that since February 24, 2012, the deposit reserve ratio of depository financial institutions was cut by 0.5%. According to the estimate of the deposit balance of 80.13 trillion yuan at the end of January, this adjustment will release about 400 billion yuan in funds. It also strengthened the signalling of loose monetary policy. However, in 2012, the performance of China's textile industry's opening data still showed signs of greater pressure.
According to the data from the China Federation of Logistics and Purchasing, in January 2012, the national PMI data was 50.5, which was 0.2% higher than that in December of last year. Both the textile and apparel industry's PMI showed a decrease from the previous month, with declines of 6.4 and 4.3 respectively. The textile industry PMI was 36.7, close to the historic low of 28.1 in the 2009 financial crisis.
Global economic growth pressures still exist: slowdown in world economic recovery, increased risk of recession in major advanced economies, weak growth in international trade and investment, turbulence in the international financial market, and ups and downs in the sovereign debt crisis... These developments in the world economy in 2011 The context features will continue in 2012.
In 2012, the world will still recover at “two speedsâ€, but the deep recession in Europe may lead to a significant drop in global growth in the first half of the year. Weak growth in employment during the recovery of developed countries and the growth rate of emerging and developing economies are likely to slow further, triggering new trade, investment, and financial protectionism. The possibility of a "hard landing" in some important emerging economies cannot be completely ruled out. In addition, there are geopolitical crises, disaster risks, and other global economic growth.
According to the forecast data of Standard Chartered Bank, the global economic growth rate in 2012 may be only 2.2%. Under this kind of economic development environment, the chances of getting excited about the exhausted end consumer market will inevitably be low. China's textile and apparel exports will continue to be hit by both sides of low demand and increased competition.
The pressure on the capital chain of the international market has increased and in the environment, the international market is also facing the problem of increasing pressure on the capital chain. It is understood that due to the further intensification of the banking industry's borrowing, European companies have normal sources of reduction, and the case of breach of contract due to capital chain breaks is rising dramatically. Rating agency Standard & Poor’s expects that the default rate of European companies will increase from 4.8% in 2011 to 6.1% in 2012; if the recession deepens, the default rate of companies may rise to 8.4%.
Banks tightened their intentions to protect themselves, and in the event of difficulties in fundraising, in order to meet new capital adequacy requirements, banks have cut down high-risk businesses. The banking industry is constantly tightening up, and it is increasingly reluctant to give ** an extension, which may force more companies into desperation. On the one hand, it is unfavorable for promoting economic recovery in Europe. On the other hand, it also increases the market risk of related foreign trade companies in China.
Input-type inflation pressure can not be overlooked In the past few years, developed countries have injected a lot of liquidity in order to cope with the economic downturn. The US’s quantitative easing monetary policy has caused the US dollar to continue to fall, pushing up the overall rise in international commodity prices, and the increase has long exceeded 2007. More than 10% during the peak period. At the same time, huge amounts of money are driven by speculative factors and hedging factors, and a large influx into the commodity market has also led to the continued rise in the prices of international bulk commodities, and it is characterized by high levels of volatility.
Since the beginning of this year, the purchase price index of Chinese enterprises has seen a significant upward trend, indicating that imported inflationary pressures cannot be ignored. According to the data from the China Federation of Logistics and Purchasing, in February, China's enterprise purchase price index rebounded by 2.9 percentage points in January and rose sharply again by 4 percentage points to 54%, the highest since October of last year. The general increase in commodity prices is the main reason why the purchase price index continues to rise. Since February, the Reuters CRB index, which reflects changes in the average price of bulk commodities, has risen by 3.5%, of which crude oil has surged 8.6%. All this reminds us that we need to be alert to inflationary pressures to continue to increase, and that companies' cost-end risk control should continue to be strengthened.
Cost pressures still demand "money" from companies
The continued increase in cost pressures is also one of the major risks facing companies in 2012. According to data from the China Federation of Logistics and Purchasing, in February, the purchase price index of major raw materials was 54.0%, which was a substantial increase from the previous month by 4.0 percentage points. This index, after falling below 50% for three consecutive months in October last year, was above the critical point in January of this year and jumped above the critical point in February.
Recently, the “2012 Preliminary Interim Cotton Storage and Storage Plan†was promulgated, and it was clarified that the 2012 closing price was 20,400 yuan/ton, which was 600 yuan/ton higher than the previous year. Although the current domestic and foreign cotton spreads continue to widen, the release of domestic storage and storage prices has set a floor price for textile companies to use for domestic cotton in the new cotton year.
It can be seen that in 2012, domestic textile companies will still be under pressure from higher raw material costs. At the same time, the continued increase in energy and power costs and labor costs will continue to increase the cost burden of enterprises. All cost pressures are greedily reaching out to companies to “money.â€
The capital chain pressure is the most prominent issue in the textile industry's ability to survive.
Looking back to 2011, China’s textile industry is not booming due to the debt crisis in Europe and the United States; it is affected by the difficult transition of cost pressure, the weak downstream demand in the textile market, and slow inventory destocking. Even if individual varieties have a technical correction, the overall situation is still not optimism. In the external environment where the pressure continues to increase, the industry’s main aggregate indicators have taken a new stage of development. However, the market sentiment has steadily declined, the growth rate of major indicators has slowed down, and the market share of major exporting consumer countries has increased. Decline, slow sales of domestic department stores, etc., have all become the data clues for the gradual increase of the difficulty coefficient of the enterprises under the increasingly tense atmosphere of the capital chain.
In 2011, China’s monetary policy was the primary objective of curbing inflation, and the direction of adjustment was “steady†and “austerityâ€. The deposit reserve ratio that has been raised to more than 20% and the strict ** index control of commercial bank systems by the branches and sub-branches of various localities directly lead to the appearance of “money shortageâ€. The prevalence of private lending and the "robbing" interest rates with annual interest rates of up to 100% in informal financial activities are in fact related to the objective reality that the formal banking system is unable to provide services in the context of severe austerity.
With the central bank strictly controlling liquidity, some SMEs have been forced to switch to the more expensive "underground financial" market, and private lending rates in some areas have risen to historical highs of 100% per annum. According to the data from the National Bureau of Statistics, in 2011, the loss of textile enterprises above designated size reached 9.8%, and the growth rate of loss amount was as high as 92.31%; during the same period, the average profit rate of textile enterprises above the designated size was 5.54%, and the profit rate of enterprises below the scale was The level of loss is less than ideal.
Many banks have reduced their enthusiasm for large and medium-sized enterprises, and have generally implemented more than 20% of the benchmark interest rate, which has led to a significant increase in corporate financing costs. For example, according to data from Jiangsu Province, in the first three quarters of 2011, the number of small and micro enterprises newly added to the single-family credit line of less than 5 million yuan in the province accounted for a new proportion, a decrease of 2 percentage points over the same period of the previous year, and the cost of financing increased by 31.4% year-on-year. %.
Against this backdrop, textile companies, regardless of their size, are faced with the struggle to survive under the pressure of the increasingly tight capital chain. The fluctuations in raw material prices, the increase in the proportion of inventories, the shortening of supply and demand billing periods, tight cash flows, increased risk of market defaults, difficulties in financing, and high costs have become a true reflection of the pressure on the capital chain of textile companies, especially small and medium-sized enterprises.
Some companies have been pressured by funds to have to sell goods at low prices in order to compete for the market and in exchange for liquidity, in order to solve the burning needs. Even some companies have reported that the potential for internal tapping is approaching the limit, but the profit margin of the industry sales is low. After deducting expenses, the amount of money earned is less than the interest rate, and it can only be scaled down.
The financial pressure caused by costs continued to increase in 2012.
According to data from the China Federation of Logistics and Purchasing, the purchase price index of major raw materials in February was 54.0%, which was a substantial increase from the previous month by 4.0 percentage points. This index, after falling below 50% for three consecutive months in October last year, was above the critical point in January of this year and jumped above the critical point in February.
The "2012 Preliminary Interim Cotton Storage and Storage Plan" recently issued stipulates that the closing storage price for 2012 will be 20,400 yuan per ton, an increase of 600 yuan per ton over the previous year, and will set a reserve price for domestic cotton use by textile companies in the new cotton year.
At the same time, the continued rise in energy and power costs and labor costs, as well as the pressure of energy conservation and emission reduction, have also gone straight to the “money†issue.
However, it must be noted that factors such as accelerating urbanization, rising residents' income levels, and policy support will boost the domestic demand market to continue to grow steadily. The monetary policy environment in 2012 will also show signs of relaxation. These will all become important supporters of the industry's economic indicators.
The rest is waiting for the industry to take advantage of opportunities...
In 2011, the “money†issue in the mine-relief market was in a downturn in the economy. In 2011, the overall prosperity of the domestic textile market was not high. The business climate of the entire industry chain continued to be sluggish, and the trading volume remained at a low level. As a result, the production and sales ratio of textile companies is difficult to increase, and the inventory backlog has become increasingly fierce. Some companies have been pressured by funds to sell goods at low prices in order to compete for the market and exchange capital.
As a well-known textile and apparel fabrics market in China, the market and direction of Keqiao China Textile City has always been of concern to purchasers of domestic surface materials and textile and garment operators. According to the China Keqiao Textile Index, the overall prosperity index, overall market sentiment index and total production index of the Keqiao market have significantly declined from those of 2010. By December 2011, Keqiao's overall market sentiment index was 1343.96, which was a decrease of 74.87 compared with the same period of 2010; the overall market sentiment index was 1064.28, which was a decrease of 31.72 compared with the same period of 2010, and the total production index was 1685.68, which was lower than the same period of 2010. 102.36.
According to the comprehensive calculation of the China Textile Industry Federation’s entrepreneurial tracking survey data, although the entrepreneur confidence index and industry climate index of China's textile companies are in the expansion range in 2011, they have also shown a trend of slowing down.
Export "money" questions China's manufacturing has fallen into the order minefield affected by the economic downturn. Consumer confidence in the United States, the European Union, Japan, and other markets is low, the global demand for imports has declined, and the performance of imported products has become more affordable. Sensitive, making the weaker international market demand more obvious.
At the same time, due to the impact of comprehensive cost factors, some market orders in the United States, Europe, and the United States were diverted to Southeast Asian countries and other rival countries. At present, Pakistan, Bangladesh, Turkey and other countries are consuming China's textile and garment export "cakes" with far lower cost advantages than China. According to relevant information, at present, labor costs in India, Pakistan, and Vietnam are only equivalent to 38% of the cost of labor in China, and the cost of raw materials only accounts for 70% of domestic consumption. Under the condition that the cost-price advantage has been severely weakened, China's textile enterprises are under greater pressure in terms of funds and other aspects of the international market's order competition. Many companies have also been forced to abandon some long-term orders and large orders, and choose short-term orders and small single-products to speed up the flow of funds and reduce the pressure on export operations.
Over the years, “Made in China†has a solid position in the international market. Even if the last financial crisis raged in 2008, the share of China’s textile and apparel products in the three major markets of the European Union, the United States, and Japan continued to grow. However, in 2011, China’s textile and apparel products fell in the import market share of the three major economies. This is also the first time since the accession to the WTO that the share of textiles and apparel in the three major markets has fallen.
According to the data released by the Office of Textiles and Clothing of the US Department of Commerce (OTEXA), from January to November 2011, the United States imported a total of 23.36 billion square meters of textiles and clothing from China, and reached US$37.89 billion, accounting for 46.8 percent of its total imports and imports respectively. % and 40.2%, representing a decrease of 0.1% and 1 percentage point respectively over the previous year.
According to EU statistics, from January to October 2011, the EU imported textiles and clothing worth 55.08 billion U.S. dollars, accounting for 41.7% of its total imports, representing a decrease of 1.2 percentage points over the previous year.
According to data from Japan's Ministry of Industry, Japan imported 31.59 billion U.S. dollars in textiles and apparel from China in 2011, accounting for 74.9% of its imports, which represents a decrease of 2.2 percentage points over the previous year.
Domestic "money" questions consumer willingness to encounter prices minefield Although the domestic market has been the main support for the development of China's textile industry for many years, and from China's social consumer goods retail classification data, it also shows that China's textile and apparel sales market is booming. However, in 2011, the inflationary pressures that plagued ordinary people are still very high.
National Bureau of Statistics data shows that in 2011, China's consumer price increased by 5.4% year-on-year. Although from July 2011 onwards, subject to several stringent monetary policy adjustments such as the deposit reserve ratio, CPI has entered a downward track. The year-on-year increase has decreased month by month, but it has remained above 4%. The first living experience that inflation brings to us is the rising cost of living. This disrupts the normal rhythm of consumer spending and also inhibits people’s desires.
The key department store monitoring data of the China Business Data Center shows that in 2011, the sales volume of large-scale retail department stores in China only showed single-digit performance, and it also showed a trend of slowing down. It can be seen that under the pressure of high inflation, the people are more sensitive to product prices and consumer choices are more cautious.
The increase in the price of products that consumers feel personally is not only due to the increase in costs in the production process, but also to the circulation of “access feesâ€, “merchant depotsâ€, shopping mall rentals, and various “public relations feesâ€. Pressure will eventually be included in clothing prices. The cost of retail channels in general clothing is about 30% or more. To enter the mall, garment suppliers first pay the entry fee, which depends on the grade and size of the mall, and mainly includes mall poster fees, promotional fees, default fees, storage fees, advertising fees, and other dozens of items. In addition, mall deductions have a greater impact on apparel pricing. The demerit points of shopping malls are related to their geographic location, passenger flow, and the purchasing power of passengers, and they generally float between 15% and 35%.
It can be imagined that under the state of pressure superposition, enterprises survive more and more “poorlyâ€, and the development of brands (especially growth brands) is increasingly “poor†and must be digested with product price increases. The price is stepping on the consumer's price-sensitive area and will inevitably bring about an impact on the sales volume.
The unbalanced flow of macro “money†problems has led to the development of minefields. According to the report of the Central Bank, at the end of 2011, the balance of broad money supply M2 was 85.2 trillion yuan, a year-on-year increase of 13.6%, and the growth rate was 6.1 percentage points lower than the previous year. The balance of ***** increased by 15.8% year-on-year, 4.1% lower than the previous year, and an increase of 7.47 trillion yuan from the beginning of the year. In 2011, the size of the social ** scale was 12.83 trillion yuan, of which bond ** increased significantly.
Looking at the total amount, the overall liquidity in China's real economy is still relatively abundant. However, ample amounts do not equal structural equilibrium. In fact, there is a wide and uneven distribution of liquidity between different industry sectors and different companies. The textile industry originally accounted for a relatively small proportion in the bank's financing system. In 2011, it raised the rate of deposits and interest rates for many times, making the textile industry more and more difficult to finance large and small companies.
Data Source: Central Bank Information In 2011, China’s macroeconomic policy turned to control inflation, and the central bank continuously reduced its liquidity. After the first announced increase in deposit reserve ratio by 0.5 percentage point from January 20, the reserve ratio has been adjusted to a historic high in the first half of the year. This has controlled the inflationary situation to a certain extent and increased the supply of funds. pressure. Raising the deposit reserve ratio six times, a total of about 2.4 trillion yuan was contracted, and bank credit funds were directly affected. In order to prevent risks, the central bank also increased its assessment of the average daily deposit and loan ratio of banks.
Many banks have reduced their enthusiasm for large and medium-sized enterprises, and have generally implemented more than 20% of the benchmark interest rate, which has led to a significant increase in corporate financing costs. For example, according to data from Jiangsu Province, in the first three quarters of 2011, the number of small and micro enterprises newly added to the single-family credit line of less than 5 million yuan in the province accounted for a new proportion, a decrease of 2 percentage points over the same period of the previous year, and the cost of financing increased by 31.4% year-on-year. %.
Under the “high pressure†of the deposit reserve ratio constraint and the daily average loan-to-deposit ratio, domestic commercial banks’ loanable funds appear to be decreasing. The unprecedented tightening of monetary policy and the strict control of commercial banking systems by local branch offices have directly led to the appearance of “money shortageâ€.
** "Money" Topic Cost Exceeding Profits Exploding Profits In the context of tight credit, banks' bargaining power has increased significantly. Some banks have adopted a strong way of raising interest rates and accepting acceptance ** to issue ** to enterprises, which has significantly increased the ** cost of textile companies. For small and medium-sized enterprises, because of the small scale of operations and some of the reasons for their own operations, it is difficult to succeed in the banking industry, and they are forced to choose the way they work.
It is understood that SMEs have been forced to switch to the more expensive "underground financial" market under strict control of liquidity by the central bank, and private lending rates in some areas have risen to historical highs of 100% per annum.
According to the data from the National Bureau of Statistics, in 2011, the loss of textile enterprises above designated size reached 9.8%, and the growth rate of loss amount was as high as 92.31%; during the same period, the average profit rate of textile enterprises above designated size was 5.54%, and the profit rate of enterprises below the scale was The level of loss is less than ideal.
In 2011, the profit growth of textile enterprises above designated size was not guaranteed. The interest rate kept rising, which made many companies not rich enough to afford it. After the latest interest rate hike, the current one-year benchmark interest rate of the Central Bank has reached 6.56%. According to a large-scale textile company, in 2011 the company's interest rate at the bank ** no longer implements the benchmark interest rate, but rises by 30% to 50%, with a maximum annual interest rate of nearly 10%. The person in charge of the company said with emotion that the internal potential of the company is nearing the limit, but the profit rate of the industry sales is relatively low. After deducting the expenses, the money earned is less than the interest, and the company can only compress the scale. Even if you can borrow money, you can't afford it. **Cost exceeds **return, what ability does the company develop and develop?
Resource "money" questions Many mountains almost equal to the cost of minefields. When enterprises are unable to make money, they include the cost of labor, energy and power costs, and energy-saving and emission reduction.
In the first year of the “Twelfth Five-Year Planâ€, the improvement of people’s livelihood continues to receive attention. The increase in residents' income must outperform the growth rate of GDP and become an important brush in the work reports of many province governments. Let people's "bags of money" swell as soon as possible to become a new direction for the distribution of people's livelihood. According to the National Bureau of Human Resources and Ministry of Health, in 2011, a total of 24 provinces across the country adjusted their minimum wages, with an average increase of 22%. In 2011, the monthly average income of migrant workers in China exceeded the 2,000 yuan mark for the first time, reaching 2,049 yuan, an increase of 359 yuan over 2010, an increase of 21.2%. The increase in the wages of workers is the most direct manifestation of labor-intensive enterprises in terms of rising labor costs. Although many textile companies have actively responded by expanding markets, improving efficiency, and strengthening technological transformation, labor-intensive companies The industry property determines that the issue of labor costs will go hand in hand.
In 2011, the national index on the value of clothing and industrial products rose by 4.2%, while the price index on the purchase of fuel and power rose by 10.8%. The increase in the purchase price index of raw materials was also much higher than the rise in the ex-factory price of industrial products, which severely squeezed the profitability of enterprises.
Starting from June 1, 2011, the prices of electricity for industry and commerce and agriculture in 15 provinces and cities nationwide have risen by about two cents per kWh. On December 1, the National Development and Reform Commission announced that it will increase the price of electricity, and the national sales price will increase by an average of 3 cents per degree. The price of residential electricity will not be raised temporarily. The increase in prices will increase the cost of electricity for enterprises.
Although China's textile industry has made some progress in energy saving and emission reduction in recent years, with the rapid growth of the textile industry and the continuous expansion of the company's scale, as well as national and local standards for energy conservation and emission reduction, China's textile industry has achieved energy conservation and emission reduction. The overall situation is still severe, and it is a long-term task for textile companies to maximize the use of resources and reduce environmental pollution.
Industry chain "money" cash flow tight alert book surface minefield under tight pressure of the capital chain, the increase in the proportion of inventory and capital, supply and demand side account period, cash flow, market default risk and other issues make the lack of money companies Dangerous situation. In the past, fabric suppliers could give companies a one-month billing period. Today, they are "one-handed, single-handed delivery," and they must pay 30% deposits more than ten days in advance. In 2011, the upstream and downstream funds of the textile industry were tight – fabric suppliers had to pay cash for cotton, and garment manufacturers had to pay cash for fabrics. Problems such as tight cash flow and shortened billing periods of supply and demand have become an important manifestation of the tightness of the industry's capital chain.
In 2012, the pressure of difficulty in the beginning of PMI showed signs of greater pressure. Although the central bank announced that since February 24, 2012, the deposit reserve ratio of depository financial institutions was cut by 0.5%. According to the estimate of the deposit balance of 80.13 trillion yuan at the end of January, this adjustment will release about 400 billion yuan in funds. It also strengthened the signalling of loose monetary policy. However, in 2012, the performance of China's textile industry's opening data still showed signs of greater pressure.
According to the data from the China Federation of Logistics and Purchasing, in January 2012, the national PMI data was 50.5, which was 0.2% higher than that in December of last year. Both the textile and apparel industry's PMI showed a decrease from the previous month, with declines of 6.4 and 4.3 respectively. The textile industry PMI was 36.7, close to the historic low of 28.1 in the 2009 financial crisis.
Global economic growth pressures still exist: slowdown in world economic recovery, increased risk of recession in major advanced economies, weak growth in international trade and investment, turbulence in the international financial market, and ups and downs in the sovereign debt crisis... These developments in the world economy in 2011 The context features will continue in 2012.
In 2012, the world will still recover at “two speedsâ€, but the deep recession in Europe may lead to a significant drop in global growth in the first half of the year. Weak growth in employment during the recovery of developed countries and the growth rate of emerging and developing economies are likely to slow further, triggering new trade, investment, and financial protectionism. The possibility of a "hard landing" in some important emerging economies cannot be completely ruled out. In addition, there are geopolitical crises, disaster risks, and other global economic growth.
According to the forecast data of Standard Chartered Bank, the global economic growth rate in 2012 may be only 2.2%. Under this kind of economic development environment, the chances of getting excited about the exhausted end consumer market will inevitably be low. China's textile and apparel exports will continue to be hit by both sides of low demand and increased competition.
The pressure on the capital chain of the international market has increased and in the environment, the international market is also facing the problem of increasing pressure on the capital chain. It is understood that due to the further intensification of the banking industry's borrowing, European companies have normal sources of reduction, and the case of breach of contract due to capital chain breaks is rising dramatically. Rating agency Standard & Poor’s expects that the default rate of European companies will increase from 4.8% in 2011 to 6.1% in 2012; if the recession deepens, the default rate of companies may rise to 8.4%.
Banks tightened their intentions to protect themselves, and in the event of difficulties in fundraising, in order to meet new capital adequacy requirements, banks have cut down high-risk businesses. The banking industry is constantly tightening up, and it is increasingly reluctant to give ** an extension, which may force more companies into desperation. On the one hand, it is unfavorable for promoting economic recovery in Europe. On the other hand, it also increases the market risk of related foreign trade companies in China.
Input-type inflation pressure can not be overlooked In the past few years, developed countries have injected a lot of liquidity in order to cope with the economic downturn. The US’s quantitative easing monetary policy has caused the US dollar to continue to fall, pushing up the overall rise in international commodity prices, and the increase has long exceeded 2007. More than 10% during the peak period. At the same time, huge amounts of money are driven by speculative factors and hedging factors, and a large influx into the commodity market has also led to the continued rise in the prices of international bulk commodities, and it is characterized by high levels of volatility.
Since the beginning of this year, the purchase price index of Chinese enterprises has seen a significant upward trend, indicating that imported inflationary pressures cannot be ignored. According to the data from the China Federation of Logistics and Purchasing, in February, China's enterprise purchase price index rebounded by 2.9 percentage points in January and rose sharply again by 4 percentage points to 54%, the highest since October of last year. The general increase in commodity prices is the main reason why the purchase price index continues to rise. Since February, the Reuters CRB index, which reflects changes in the average price of bulk commodities, has risen by 3.5%, of which crude oil has surged 8.6%. All this reminds us that we need to be alert to inflationary pressures to continue to increase, and that companies' cost-end risk control should continue to be strengthened.
Cost pressures still demand "money" from companies
The continued increase in cost pressures is also one of the major risks facing companies in 2012. According to data from the China Federation of Logistics and Purchasing, in February, the purchase price index of major raw materials was 54.0%, which was a substantial increase from the previous month by 4.0 percentage points. This index, after falling below 50% for three consecutive months in October last year, was above the critical point in January of this year and jumped above the critical point in February.
Recently, the “2012 Preliminary Interim Cotton Storage and Storage Plan†was promulgated, and it was clarified that the 2012 closing price was 20,400 yuan/ton, which was 600 yuan/ton higher than the previous year. Although the current domestic and foreign cotton spreads continue to widen, the release of domestic storage and storage prices has set a floor price for textile companies to use for domestic cotton in the new cotton year.
It can be seen that in 2012, domestic textile companies will still be under pressure from higher raw material costs. At the same time, the continued increase in energy and power costs and labor costs will continue to increase the cost burden of enterprises. All cost pressures are greedily reaching out to companies to “money.â€
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