Textile and Apparel Industry: What to Force "Twelve Five Years"

If the "Tenth Five-Year Plan" is the most important period for China's textile and garment industry to be an opportunity for development, the comparative advantages of the industry will be fully released, and the embryonic form of China's textile and garment giants will emerge. Then enter the "post-quota era" of the "Eleventh Five-Year Plan", China's textile industry. The garment industry seems to have become “big fate”: the impact of the international financial crisis, rising labor costs, soaring raw material prices, and volatile external trading environment. However, even under such circumstances, the whole industry still achieved rapid development.

Du Yuzhou, president of the China Textile Industry Association, commented that the "Eleventh Five-Year Plan" is the best five years for the development of China's textile and clothing industry. However, what is more important is that during the “12th Five-Year Plan” period, the whole industry should be more cautious in achieving the goal of “a strong textile nation”.

At the "2011 Annual Meeting of China Textile Roundtable Forum" that was concluded not long ago, leaders of industry associations and entrepreneurs of textile and clothing made experience in the development of the "Eleventh Five-Year Plan" industry, and made predictions and analysis of development in the next five years. .

The value contribution rate of the textile and apparel industry has increased significantly

If the Chinese textile and apparel industry in the past was more dependent on factors such as “demographic dividends” and simple processing trade, then in recent years, the entire industry has gradually become sober in “labor pains” and began to choose “to adjust structure and transfer methods”. The road to upgrade has changed from relying on the contribution of quantity to the contribution of value.

According to the statistics of the China Textile Industry Association, in the growth of export trade of the entire industry, the contribution rate of its value increase has increased from 12.47% in the late period of the “Tenth Five-Year Plan” period to 55.51% in the “Eleventh Five-Year Plan”, and the contribution rate of quantitative growth has been “ The period of the Tenth Five-Year Plan period was 87.53%, and it dropped to 44.49% by the “Eleventh Five-Year Plan” period. Exports of all kinds of textile fabrics increased by 128% during the “10th Five-Year Plan” period, of which the volume growth contribution rate was 74.25%, the value growth contribution rate was 25.75%, and the first four years of the “Eleventh Five-Year” export growth was 35.36%. The contribution of quantitative growth dropped from 74.25% to 27.47%, and the value contribution rate increased from 25.75% to 72.53%.

Du Yuzhou, president of the China Textile Industry Association, believes that this shift is very important for the industry, which reflects the industry's ability to respond to the market and to counteract risks.

At the same time, during the “Eleventh Five-Year Plan” period, the Chinese textile and garment industry overcame many difficulties and achieved historic development. For example, for five years, the average annual growth rate of clothing wholesale and retail sales above designated size has been 6 to 8 percentage points higher than the average growth rate of consumer goods in the entire society; during the “Eleventh Five-Year Plan” period, textile and apparel exports have increased by 82.3%, and the trade surplus has increased by 91.8. %.

Du Yuzhou analyzed that one of the reasons why the textile and clothing industry achieved such good results during the “Eleventh Five-Year Plan” period was that the “Eleventh Five-Year Plan” was the fastest in the industry's technological progress.

According to report, during the “Eleventh Five-Year Plan” period, the investment in R&D expenditures of large and medium-sized textile enterprises and the output value of new products of enterprises above designated size have increased by nearly 2 times; 22 scientific and technological achievements in the industry have won National Science and Technology Awards, among which “Annual Production 45,000 tons of viscose staple fiber engineering system integration research, "high-performance short-flow embedded composite spinning technology and industrialization," two won the first prize of the National Science and Technology Progress Award. Currently, about one-third of all key enterprises in the industry have reached international advanced level. The labor productivity of the above-scale enterprises has doubled compared to 2005.

It is worth mentioning that during the "Eleventh Five-Year Plan" period, the performance of sub-sectors under the big textile industry is also commendable. According to Duan Xiaoping, president of the China Chemical Fiber Industry Association, the chemical fiber industry has highlighted four aspects in the past five years: First, the total volume has maintained a rapid increase, with an average annual growth rate of nearly 11%. Second, the degree of industrial concentration has further increased. Third, the industry has made breakthroughs in the field of high-tech fiber. Carbon fiber, high-strength polyethylene, and other fibers that were previously only developed countries can produce, and now basically domestically achieved industrial production. Fourth, technological progress has achieved remarkable results.

Yang Shibin, president of the China Knitting Industry Association, compared the development of the knitting industry during the “11th Five-Year Plan” period to the speed of the Chinese railways. He believes that the core reason lies in the structure. From the perspective of market structure, about 70% of the original knitwear products relied on the international market and 30% sold domestically. However, at the end of the “Eleventh Five-Year Plan”, domestic sales accounted for about 55%. From the perspective of the production structure, the total amount of knitted fiber processing has been exceeded. 13 million, accounting for 1/3 of the textile processing of textiles and garments; from the performance point of view, the knitted garments currently accounted for by the amount accounted for 55% of the garments in the entire industry, accounting for about 65% of the production.

Comparative advantage escalates from simple labor to complex labor

Du Yuzhou said that during the “12th Five-Year Plan” period, the manufacturing industry must establish a modern industrial system and improve the core competitiveness of the industry. However, the comparative advantages of China's textile and garment industry still exist, but the whole industry must promote the upgrading of comparative advantages, that is, the shift from simple labor to complex labor. Judging from the status quo, most workers in the industry have now risen to knowledge workers and their creativity has greatly increased.

According to the statistics of China Textile Industry Association, the average number of employees in each industry fell from 272 in 2005 to 202 in 2010. Employment decreased by 25.7%, and sales per company increased from 5505 yuan per capita to 7524. Yuan, an increase of 36%. In the industry, companies with an average profit rate of more than 3.97% have an average of 291 employees in 2005 and 235 employees in 2010. In enterprises with an average profit rate of less than 3.97%, the average enterprise is in 2005. The number of employees is 264. In 2010, it was 184. From these data, the value of the creation of labor profits in the industry has increased, and the number of people has decreased. This shows that there are relatively many creative workers in the industry.

Yang Shibin believes that during the “12th Five-Year Plan” period, the industrial capital of the knitting industry will show a trend of financialization. With the accumulation of corporate wealth and the enhancement of capabilities, there will be a diversification trend in investment, and the investment will shift from the prior cost priority to the dual priority of cost and market; in addition, the internal structure of the industrial enterprise will involve the issue of “succession”, that is, there will be many The second generation of entrepreneurs, and in this transition, there will be many unexpected things.

Yang Shibin also stated that there will be a trend of “big business” in the industry; industrial clustering will be further strengthened; industrial collaboration will be smoother. For internal companies, first of all, labor productivity will increase. "I don't think that all companies in the knitting industry will form their own brands. A larger number of companies need to improve their labor productivity to make themselves faster." Next, he suggested that companies should The focus of attention on domestic sales, full attention to sales network and network sales. "The potential for online sales in the future is very large, and this may also be crucial to the development of the company."

According to Zhou Haijiang, president of Hongdou Group, in 2010, the operating income of “Red Bean” was 28.2 billion, which was an increase of 26% compared with 22.3 billion in 2009. “The key to our development is the transformation from production and operation to creation and operation. For example, we originally set up more factories, but now we must set up R&D institutions and run a chain of monopoly network system, including the brand series of Hongdou Men’s Clothing, through both ends. After the extension, the middle production was completely outsourced, and only a small part of it was self-employed. 80% were all external processing, and over 800 external processing companies were integrated, which greatly integrated social resources.”

Zhou Haijiang believes that the biggest challenge for the industry in 2011 or even in the future will be inflation, and this round of “inflation” is rigid again. The reason is that the transfer of effective labor in rural areas is nearing its end, and the more developed countries such as Japan, South Korea and Singapore have also experienced this stage.

In the face of “inflation,” Zhou Haijiang’s proposal is “employee wages have to rise faster” and “there is more material for reserves”.

Xu Jianmin, general manager of Sanyang Textile Co., Ltd. believes that funds are most important for the future development of the company. Because of the large number of small and medium-sized enterprises in the domestic textile and garment industry, funds are a test for every company in the current situation.

Duan Xiaoping also believes that funds are very important for the development of industries and enterprises in 2011. He said that in 2011, liquidity in the chemical fiber industry may be relatively tight. "Because many raw material prices and product prices have risen, which requires more liquidity to support the normal operation of the enterprise, we are now in a period of monetary tightening."