Five Factors Have Constrained The Development Of Cotton Textile Industry
This year, cotton prices continue to rise as the mills are showing sales booming in recent years, a rare sight. However, this unexpected market conditions did not allow companies gave all sorts of seemingly hot market, companies have not thought practical benefits as well, the surface of the red-hot in this behind the deep-seated contradictions in the industry has not been reversed, limiting the industry upgrade the development of raw materials, capital and other issues become more prominent in the business before.
Structural adjustment, eliminating the backward, industrial upgrading has become a consensus among the cotton spinning business, but upgrading is not a simple slogan, enterprises in the upgrade process, what are the problems to overcome? Should be how to create a better market and policy environment?
Recently, the China Cotton Textile Association Council on the third nine, the cotton textile companies from around the country representatives of blunt talk about the business in the adjustment problems encountered upgrade and made some constructive comments .
Five disturbing factors
There is no doubt this year’s trade situation better than last year, but the good foundation is not stable, has no fundamental improvement. Vice President of China Textile Industry Association, China Textile Industry Association Wen-Ying Xu said: “In the industry is facing some uncertain factors.”
First, raw materials and labor prices, crude oil, cotton prices continued high volatility, driven chemical fiber, textile raw material prices, domestic labor, energy, power and other factor prices also had a rising trend in cotton textile mill cost pressures increased significantly.
Second, financial credit, although domestic monetary policy in 2010 will remain “moderately easy”, but domestic inflation is expected to strengthen as the recent central bank has twice raised the deposit reserve ratio announced by 0.5 percentage points, tightening monetary policy to fine-tune the trends have appeared, the problem of financing cotton textile enterprises may be more prominent.
Third in the export environment, trade protectionism, anti-dumping, countervailing measures increased significantly, countries will be directed at China, rely on low-cost, and the number of competitive enterprises at risk.
The fourth is the pressure of RMB appreciation, along with rapidly rising U.S. dollar liquidity, growing pressure on RMB appreciation will further increase the difficulty of the export sector.
Finally, recruitment is difficult, after the Spring Festival widespread coastal areas of labor shortages, the cotton textile industry labor intensity is an indisputable fact, wages are low, and to recruit them failed to keep, forcing enterprises to improve their wages, which will be the troubled cotton the important issue of business running.
Cotton lot
Cotton textile industry, cotton has always been a most important factor in the development, supply shortage, quota distribution, cotton transport, subsidies and other issues out of Xinjiang is the focus of business in general.
“Enterprises in hi-tech, running materials, engage in marketing people are the backbone of the elite. Most people do not understand how to take money can not buy cotton, and now the situation actually existed.” Enterprises in Fujian, a frustration that President Chen . The company in September last year, several thousand tons of cotton on the reservation, the money has gone to fight, so far there are 3,000 tons of pressure in Xinjiang reserve library. “There are more than 2000 tons intent behind the cotton, I am not money or the.”
A cotton spinning company in Texas is huge amounts of money to spend 230 million yuan purchase of cotton, since there are more than 10,000 tons of cotton can not be out of Xinjiang. “For only half the amount of cotton inventory.” Enterprise executives complain that there is no recourse but to high-priced car transport, rail transport compared to, motor without subsidies, “but considering the line of customers waiting for delivery, we can only so, really hard. ”
It is understood that a lot of fabric production for export, in order to ensure the quality, mostly with imported cotton, and Cotton, but not with ordinary cotton, “are mainly worried about the three wire problems for fear of claims.” Many enterprise leaders distressed to talk to reporters.
The Cotton Transport has become a shortage of cotton spinning enterprises an important factor. Funds held in the company can not move there, many business owners in Xinjiang railway station waiting day and night, only quietly tears.
According to report, Xinjiang railway transportation capacity is a bottleneck restricting the cotton from Xinjiang, Xinjiang has a large chemical company production capacity is exacerbated tensions. Xinjiang Railway transport problems facing the short term can not fundamentally resolve the situation, the majority of cotton spinning enterprise calls for the authorities to adopt corresponding policies, cf rail subsidies on cotton in Xinjiang Automotive out of subsidies given to freight.
A large cotton textile enterprises in Jiangsu is also a headache for the cotton shortage. The companies recently began for the U.S. men’s company, a leading provider of yarn, while the other requirement used in all U.S. cotton. As the company previously did very little export quota limited, raw materials became the company most scratching problems.
Cotton supply has exacerbated tensions in the substantial increase in cotton prices, according to statistics, cotton prices in September last year has gone up since more than two percent, the parties continued to call the case, the company has also not received list, There entrepreneur said: “this continues, our price advantage will cease to exist, and stability of cotton prices is the current pressing problems.” Many enterprises have recommended payment of the relevant departments as soon as the quota and keep still rising cotton prices, guaranteed textile enterprises cotton needs.
Funding problem is even worse
Large sums of money betting on raw materials, so that funds have been a shortage of cotton spinning enterprises to even worse. “Advancing technological innovation, resolutely eliminate backward equipments” is cotton industry, industrial upgrading, the main way, which no doubt requires all financial support.
Xinjiang has 50 years of history, a state-owned cotton company, last year’s self-financing the implementation of technical innovation with many years of loss-making business to profitability. The face of future development, the company head said frankly: “TUFS is difficult to implement, as a state-owned enterprises, their burden, profits are low, taxes are very heavy, technical innovation is not in place, banks do not loan, we can only small been piecemeal reform. “This enterprise was once the 50 national tax, but the profit is ranked 500 after. High taxes for businesses unable to strengthen their own technological transformation, and naturally can not improve product competitiveness.
The enterprise leaders called the textile industry as a livelihood, the banks should be considered in technical transformation funds to provide subsidized loans to enterprises.
Country is a moderately easy monetary policy, cotton textile enterprises are bank loans for enterprises not feel relaxed. Owned enterprises, said bluntly: “We had never experienced a moderately easy monetary conditions.” Financing difficulties, high taxes have already restricted the development of cotton spinning enterprises to upgrade their common problems.
Cotton textile mills of high value-added tax levy lower corporate deduction problem has been criticized. “What is the value-added tax, value added, and taxes reasonable. For low-profit enterprises to bear the tax burden should not be borne by the enterprises, which do not meet the economic development law.” There are entrepreneurs, analysts say.
According to national statistics from related departments ranked in the tax industry, the textile industry among the best.
Cotton textile enterprises have been called into the procurement of cotton output tax be uniform. Although this is not to solve the problem overnight, but the companies still hope that the unreasonable taxes can lead to relevant state departments concerned, and as soon as possible to find solutions.
The pressure for RMB appreciation, there is business to consider proposals to further enhance the export tax rebate rate.
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