After The Outbreak, Will China'S Textile Industry Play A Leading Role In The World?

According to relevant reports, the US government has shouted the manufacturing industry back to stabilize employment because of the soaring unemployment rate and the shortage of medical resources. At the worst of the epidemic, more than 16 million people in the United States applied for government assistance in three weeks. The governor of New York once picked up a N95 mask and said that the mask was not complicated enough to import from China. The epidemic has exposed the problem of manufacturing in the United States, which has hurt the heart of the Trump administration.

Can the US manufacturing industry really return smoothly? As the important representative of the manufacturing industry, will China's leading position in the world be shaken?

Can the US manufacturing industry backflow smoothly?

In fact, the US dominated the manufacturing industry in the Obama era, but few companies who returned to the United States laughed. As a benchmark enterprise for the manufacturing industry to return to the US, Foxconn launched the US factory plan in 2017. 3 years later, the factory was empty. General Motors is not optimistic, and decisively closed four US factories.

The US economy has been affected by the epidemic and has dropped significantly. According to the latest data, in April, the US Manufacturing Purchasing Managers Index dropped to 36.1%, while the European manufacturing PMI dropped to 33.6%; in addition to China, most countries PMI fell below 40%. In April, the purchasing managers' index of China's manufacturing industry was 50.8%, indicating that the momentum of China's economic growth is improving. There are many indications that as one of the most important consumer markets in the world, China's economy is most likely to take the lead in the rebound. Manufacturing in China is obviously more rational than that in Europe and America, where the epidemic is still serious and the economy is depressed.

In the past decades, the United States has been implementing the policy of de industrialization, vigorously developing the information industry and finance, many industries have been broken down, and it is very difficult to restore the manufacturing industry. The main reasons are: first, the lack of entrepreneurs, the lack of senior management and young workers. Second, the strength of the trade union system and the tension between the employers and employees in the US will be difficult to solve in the short term.

It is very pragmatic for enterprises to make decisions. Now, even if there are enterprises considering repatriation of the US, or foreign companies wishing to invest in the US, the lack of supply chain support is a major factor limiting the large-scale investment of manufacturing industry in the United States.

In addition, after the impact of the epidemic, the global economy has been hit hard. For most enterprises, cost reduction is the primary task. It is difficult to carry out such a major decision as relocation, and even in the past two years, the investment in manufacturing industry will be greatly reduced.

How to reshape the textile industry?

What are the new trends in the textile industry this year under the impact of the epidemic?

Under the epidemic, investing in an industry will pay more attention to the ability of a country to control its major events and its ability to restore its economy, and so does the textile industry. The epidemic is spreading all over the world. Flights in Europe and the United States are closed, the country is closed to the city and the economy is closed.

Globally, China is the most powerful country for epidemic prevention and control, while the number of infected countries in Europe and the United States has remained high. The epidemic situation once again shows China's institutional advantages, the high rate of resumption of work and the high rate of production, and the government's measures to promote consumption have achieved obvious results. The outbreak caused countries to stop production and stop production, while China took the lead in the world to successfully resume production and recovery in large scale. As of April 25th, the recovery rate of large and medium manufacturing enterprises was 99.7%. The Chinese government has achieved remarkable results in promoting consumption. During the May 1 holiday, China's consumption situation exceeded expectations, and there was a wave of compensatory consumption growth. On -5 May 1st, the average retail sales of key retail enterprises increased by 32.1% over the Ching Ming holidays, showing an accelerating trend. From May 1st to 5, the total amount of online transactions of the UnionPay exceeded 1 trillion and 570 billion yuan, and the average daily transaction amount was 313 billion 100 million yuan, which has reached 97% of the average daily turnover of May 1 holiday last year.

The impact of the epidemic may lead to more capital flows to China with stronger management capability.

What is the "killer weapon" of China's textile industry?

First of all, China's textile industry has the advantage of cost-effective. The rise of China's textile industry mainly depends on the low cost mode. However, with the decline of the demographic dividend advantage, high-quality management, technical personnel, complete industrial chain matching, and preferential policies for investment in the Midwest are becoming an irreplaceable advantage.

Secondly, the textile industry is a cost sensitive industry, especially the spinning industry. The global textile industry has also experienced the transfer from Europe to Asia, and the transfer process in Asia. In recent years, with the increase of production costs, there has been a shift to Southeast Asia and Africa. Among the Southeast Asian countries, Vietnam's epidemic prevention is brightest, plus Vietnam's tax related advantages, and we need to keep vigilant against Vietnam's competitors in the global migration of the textile industry.

Cao Dewang, chairman of Fuyao Group, said that if China wants to have a long-term prosperity of traditional industries, it is necessary to retain these manufacturing enterprises, otherwise China's economy can not achieve independence. In recent years, especially after the outbreak, the government has successively introduced support policies for small and medium-sized enterprises, such as delaying repayment of loans, reducing interest rates, returning social insurance, etc. these policies can reduce the cost of production and operation of enterprises and continue to enhance the competitiveness of the manufacturing industry.

Finally, it is more important to improve the investment and production environment of the textile industry and enhance the support for the textile industry. Especially under the epidemic situation, small and medium-sized enterprises have reduced orders, cut down production and shut down work, and even failed. These large and medium-sized enterprises actually created most of the foreign exchange in China, and accounted for more than half of China's textile production. In 2019, the total export volume of textiles and clothing in China amounted to 271 billion 836 million US dollars. The most difficult part of the epidemic is export-oriented enterprises. They should give them some financial support to help enterprises tide over difficulties. Once an enterprise fails, it will be difficult to recover. We do not want to see the mess after the outbreak. We need more SMEs to create more foreign exchange for our country.

At present, the main advantages of China's textile industry in the international market are still in the middle and low end products. The proportion of high value-added products is not high. Most of the high-grade fabrics still rely on imports, and the key links such as weaving, dyeing and finishing are still dominated by developed countries such as Italy, Germany and Japan. In the high-end, high value-added products, there are still many places to upgrade and excavate in China's textile industry. We hope that in a special period, enterprises can sink down and study hard, create core competitiveness of products, and the future market will be more extensive.