Facing Challenges to the Textile Industry to Highlight New Opportunities for Development

The Fifth Plenary Session of the 18th CPC Central Committee put forward the five development concepts of innovation, coordination, green, openness, and sharing for the first time, depicting a new blueprint for the development of China during the “13th Five-Year Plan” and even longer period. The textile industry is also in a special historical period. It is standing at a new starting point and facing new challenges, but it also has new opportunities. Under the goal of "two hundred years", the textile industry will further strengthen the "three major positionings", "two major characteristics" and "six major roles" of the textile industry and achieve a new leap in the textile industry.


New starting point: China's textile industry at the intersection of history


At present, China's textile industry is in a special period of historical intersection, and it is standing on a new starting point with "speed change, structural optimization, and power conversion" as its important features. The concrete manifestation is that scale benefits have been growing steadily and the speed of development has shifted from high speed to medium speed. High-speed; structural adjustment features are obvious, comprehensive optimization has become the theme of the industry development; the process of industrial transformation and upgrading is accelerating, and the driving force of development has shifted from element-driven to innovation-driven.


Change in speed - Steady growth in economies of scale, speed of development from high speed to medium speed


Since 2010, the growth rate of major economic indicators such as total fiber processing, operating income, total profits, exports, and industrial added value of the textile industry in China's textile industry has dropped significantly, showing a medium-to-high-speed growth. Although the growth rate has slowed down, the development status is better than the overall economic situation in the country. On the whole, the value-added growth of textile industry is faster than GDP growth.


From 2009 to 2014, the fixed assets investment of the above-scale enterprises in the textile industry kept growing, but the growth rate declined. From January to October 2015, the total investment was 978.185 billion yuan, a year-on-year increase of 15%; from 2009 to 2014, the proportion of fixed assets investment of large-scale enterprises in the textile industry in the total social investment increased steadily, from January to October 2015. The proportion reached 2.19%.


Structural Optimization - Significant structural adjustment features, and overall optimization has become the subject of industry development


At present, the market plays a decisive role in the allocation of resources, stimulating the industry's all-dimensional, multi-dimensional and in-depth structural adjustment, and the industrial structure is moving toward rationalization.


In terms of raw material structure, in 2014, the proportion of chemical fiber accounted for 82.2% of the total fiber processing in China, which was 12.2 percentage points higher than that in 2010. In terms of product structure, in 2014, the processing ratio of the three major end-use fibers for apparel, home textiles, and industrial use was 46.8:28.6:24.6, of which the share of industrial textile fibers increased by 4.6 percentage points over 2010. In terms of regional structure, in the western region, the proportion of the company's main business income to the entire industry rose from 16.8% in 2010 to 22.5%, while overseas investment showed an upward trend. In terms of industrial organization structure, the industry’s advantageous resources have been accelerating toward leading enterprises, while a number of small, specialized, sophisticated, and special companies have increased and developed healthily. In terms of consumption structure, the growth of physical retail channels has slowed down and e-commerce has grown significantly. In terms of export structure, the market is diversified. In 2013, ASEAN overtook Japan as the third largest market for China's textile and apparel exports. In 2014, the European Union, the United States, ASEAN, and Japan accounted for 55.11% of China's total exports of textiles and garments. Knitwear exports grew rapidly. Exports of knitted garments and accessories exceeded woven fabrics in 2006. In 2013, the export of knitted fabrics and garments exceeded US$100 billion; the proportion of general trade continued to increase, reaching 76.18% in 2014, an increase of 1.75 percentage points over 2010.


In addition, according to the research of Ping An Securities, about 70% of the 80 listed companies in the textile and apparel segment developed across borders, and the cross-border development of corporate capital markets performed well. Diversification has provided a pool of funds for expanding and strengthening the main industry, but it should be alert to the tendency of capital operations to cause hollowing out of the physical industry. The industry encourages enterprises to base themselves on industry, and extends naturally to the “Internet Plus” lifestyle and cultural creativity.


Power Conversion - Accelerating the Transformation Process and Driving Forces of Development from Factor-driven to Innovation-driven


Since the “Twelfth Five-Year Plan”, the process of industrial transformation and upgrading has been accelerated, and the driving force of development has shifted from the factor-driven to the innovation-driven.


In terms of technological innovation, a number of high-tech fiber complete sets of technologies and equipment have made breakthroughs and broke the monopoly of foreign technology. Key technologies for chemical fiber, textile, printing and dyeing, and industrial textiles have made progress. Key technological breakthroughs and integrated innovation have helped boost traditional textile products to high-end. Development, continuous, automated, and high-speed new textile equipment have been widely used. Breakthroughs have been made in the development of intelligent textile equipment and applications have begun. The rapid industrialization of high-tech materials technology has gradually broken the monopoly of foreign technology.


Talent training has been further strengthened to provide intellectual support for the industry. Since the “Twelfth Five-Year Plan”, the scale of R&D personnel in the industry has continuously expanded The multi-level human resources cultivation system has been further improved, professional education, vocational education, and on-the-job education have developed rapidly, and a multi-level human resources cultivation system has been gradually established and improved. Enterprises increase investment in the training and introduction of high-end talents, and cultivate a batch of professional skills talents suitable for enterprises through orientation training, commission training, short-term training and self-run universities. In terms of brand building, brand awareness, innovation, and scale of the entire industry have increased significantly.


New Leaps: Understanding the Environment and Grasping Opportunities


Faced with the pressures and challenges brought about by the slowing down of globalization, flattening of costs, decentralization of purchases, and the aging of the population, the textile industry needs to recognize the environment and meet the challenges; identify the direction, grasp supply-side reform, industry intelligence, and new-type cities and towns Development opportunities brought about by regionalization and regional cooperation; taking the market-oriented, innovation-driven, structural optimization, and green development as the basic approaches; and using smart manufacturing, capital markets, and cultural creativity as the three major players to advance the optimization and reconstruction of the textile industry chain , Extend the links to achieve synergy and integration within the industry and industry, form a large textile, build a large platform, and create a large ecosystem.


Challenges Declining expectations for economic growth, slowing growth in emerging markets, and slowing global trade growth have become core features of the new normality of the global economy, affecting industry development.


The slowdown in globalization has led to a weak growth in international commodity trade. The globalization dividend is being diluted with the rapid increase of regional trade agreements, and the fragmentation of the global trading system is becoming increasingly prominent.


The flattening of costs brought about changes in the industrial competition landscape. Due to factors such as the technological revolution, capital costs, and raw material prices, the global textile manufacturing cost tends to flatten, which changes the industrial competition landscape.


The aging of the population has caused a structural shortage of labor in the industry. In 2014, the average per capita wages of fisheries, animal husbandry, and subsectoral fisheries and construction industries were lower than that of manufacturing industries. The industry’s wage gap and social employment orientation brought about a shortage of employment to some extent.


At the macro level of opportunities, supply-side reforms will increase total factor productivity. From focusing on “troika” to focusing on the supply and effective use of production factors, the state will be encouraged to do a good job in policy addition and improve policy supply; do a good job of subtracting production capacity and eliminate backward production capacity ; Do a good job of innovation and multiplication, exert the multiplier effect of innovation on development, and improve product service supply capacity; do a good job of cost division, eliminate institutional barriers, and reduce the company's institutional transaction costs.


At the industry level, the supply-side reforms will guide demand and create demand at the same time, from stimulating demand expansion to precisely matching demand, and resolving the structural problem of insufficient supply, thus promoting the industry to accelerate the building of a modern industrial technology system.


Industry intelligence brings opportunities for industrial transformation and upgrading. Under the background of the implementation of the "Made in China 2025" strategy and the "Internet Plus" action plan, intelligence will bring tremendous opportunities for the transformation and upgrading of the textile industry. At present, a large number of enterprises in the industry have introduced intelligent equipment and intelligent operations to help achieve energy conservation, resource conservation, labor savings, and production of high stability and high quality products.


New urbanization brings huge room for growth in the industry. The increase in the urbanization rate and the narrowing gap between urban and rural areas will drive the expansion of domestic textile consumer demand. The diversified, personalized and fashionable demands have become the mainstream and will also accelerate the acceleration of the consumption structure. According to the "13th Five-Year Plan," the proposed goal, by 2020, there will be 100 million migrant workers and other permanent residents living in cities and towns. This part of the population will drive more than 160 billion yuan in apparel consumption.


During the “Thirteenth Five-Year Plan” period, the growth in consumer demand for industrial textiles is expected to maintain an annual average of more than 8%. By 2020, the proportion of bag dust removal from coal-fired power plants will increase from the current 25% to more than 40%; the replacement rate of medical textiles imported products will reach 15% to 20%; the market penetration rate of domestic adult care products will be less than 2% from the current level. Increase to 10%.


Regional cooperation brings benefits to industrial transfer cooperation. The “One Belt, One Road” initiative, the coordinated development of Beijing-Tianjin-Hebei, and the implementation of the three major strategies of the Yangtze River Economic Belt and the signing of bilateral multilateral free trade agreements will greatly expand the development space of the textile industry and enhance the technological resources, innovation resources, and marketing resources of industry enterprises. The ability to manage resources and manufacture resources, promote regional restructuring and industry "going out."


New Blueprints: Innovation, Coordination, Green, Openness, Sharing


Under the "two hundred years" goal, we will further strengthen the "three major positionings", "two major characteristics" and "six major roles" of the textile industry. The three major positions: that is, the traditional pillar industry of the national economy, an important civilian production industry, and the creation of an internationally advantageous new industry; two characteristics: the integration of science and technology with fashion, clothing consumption, and industrial use; To play its role in beautifying people's lives, stimulating related industries, stimulating domestic demand growth, building ecological civilization, enhancing cultural confidence, and promoting social harmony. Through "innovative development", "coordinated development", "green development", "open development" and "sharing development", we will enhance the industry's strength, shape the charm of the industry, enhance the internal strength of the industry, and achieve a "new leap forward" in the textile industry.


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