Trend Analysis of Chinese Textile Machinery Exports in 2010: Cons of Cheap Exports

Data show that as of October 2010, China's total output value of textile machinery was 73.881 billion yuan, and the export value was 1.269 billion US dollars, accounting for only 13% of the current production value. So, what exactly is the development of China's textile industry? What are the reasons that have affected China's textile machinery export trend?

Increased production volume - gratifying achievements in the textile machinery industry

In the first three quarters of 2010, China's textile machinery industry achieved a total industrial output value of 57.661 billion yuan, a year-on-year increase of 48.58%, reaching the highest level in the same period in history; the industrial sales value of 56.62 billion yuan, an increase of 46.17%; total profit of 3.418 billion yuan, year-on-year The increase was 1.72 times, which was an increase of 62.85% over the same period with the highest profit rate in the same period of 2007; the completion of exports was 1.242 billion US dollars, an increase of 44.82% year-on-year. The profitability of the textile machinery industry has been fully enhanced and it has returned to its best before the financial crisis. According to data released by the National Bureau of Statistics, orders for Italian textile machinery increased by 41% in the first quarter of 2010, with orders from China increasing by 110% to 70 million euros, and India's growth by 78% to 23 million euros. In the first quarter of this year, German textile machinery orders increased by 130%. It is expected that German textile machinery sales this year will increase by 30% to 35% over 2009.

As a traditional advantageous industry that accounts for an important share of China’s total exports, exports of textile products have grown fastest in the past five years, with the largest number of exports. From the perspective of growth rate, in 2006, the first year of the “Eleventh Five-Year Plan”, the export of textile machinery products exceeded the one-billion-dollar mark and reached 1.237 billion U.S. dollars. It was the export volume of 500 million U.S. dollars during the “10th Five-Year Plan” period. More than twice. In 2007, it continued to grow at more than US$1.5 billion. Despite the international financial crisis, the annual exports from 2008 to 2009 dropped from US$1.567 billion to US$1.211 billion. However, by 2010, China's textile machinery exports have risen again. From January to October, exports reached 1.396 billion US dollars. It is expected that the export volume this year will exceed US$1.6 billion.

According to Meng Tian, ​​deputy general manager of Hengtian Heavy Industries (formerly Zhengfang Machinery), “These figures reflect the alarming increase in exports of textile machinery products during the 11th Five-Year Plan period. On the other hand, during the “Eleventh Five-Year Plan” period, export of textile machinery products It also broke through the single bottleneck of export products and developed in the direction of a rich product category.

Among all export products, knitting equipment has become the highest export product in the player industry, followed by printing and dyeing equipment and spare parts, completely breaking the traditional pattern of taking the spinning frame as the main body. During the "11th Five-Year Plan" period, the most significant feature of China's textile machinery exports is that it is no longer relying solely on cotton spinning machines to leave the world alone. There is no doubt that the transfer of the global textile industry to Asia has provided a huge market opportunity for China's textile machinery exports.

The establishment of economic and trade ties between China and ASEAN countries not only creates opportunities for the development of China's textile machinery industry, but also creates conditions for China's outstanding textile enterprises to implement the "going out" strategy. On January 1, 2010, China and the ten ASEAN countries (Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei, Vietnam, Laos, Myanmar, and Cambodia) signed a free trade agreement and established a free trade zone, as most of these countries For the countries with large demand for textile machinery, establishing contact with them has stimulated the growth of China's textile machinery spare parts exports. On the other hand, countries in the free trade zone issued a series of laws and regulations, preferential policies and their risk assessments, which provided protection for investors and facilitated the requirements and guidelines of ASEAN countries for the quality of traded goods.

Gao Xiang, vice president of China National Textile and Apparel Industry Association, said: “More and more Chinese companies are investing and setting up factories in ASEAN, setting up joint ventures, setting up professional markets, setting up maintenance and training bases, etc. For example: Rainbow Textile Group has been in Vietnam for three years in total. Invested and constructed 350,000 spindles, all of which are complete sets of cotton spinning equipment produced by China's Hengtian Group's textile machinery enterprises.Furthermore, with the gradual recovery of the global economy, the production trend of textile enterprises has gradually rebounded and the pace of exports has been accelerated. China's textile industry has always been committed to the adjustment and upgrading of industrial structure, and the huge impact of the global financial crisis has made this adjustment and upgrade requirements more urgent.The rising domestic labor costs also force companies to increase labor productivity through new technologies and new equipment. Therefore, even if it is affected by the financial crisis, the total investment in China's cotton textile industry will continue to grow in 2009, and the industry’s advanced equipment ownership rate will continue to increase.Automatic doffing, blowing, automatic winder, shuttleless Looms have different degrees of growth."

Low price problems - the drawbacks of the textile industry

During the "Eleventh Five-Year Plan" period, although the export value of China's textile machinery products showed a trend of rapid growth, the problems that have plagued China's textile machinery enterprises for many years - export prices have been low but have not been resolved. At one time, low prices were the biggest competitive advantage for China's textile machinery products to seize the international market. However, blindly through the price reduction to win the market, ultimately reducing the company's profits, can not promote the healthy development of the textile machinery industry. Cotton spinning machine is a typical case. In the past ten years, its export price has not increased, but has dropped by 50%. In the early 90s of last century, the price of spinning frames in our country was more than 90 US dollars per spindle, which has now dropped to about 50 US dollars per spindle. At present, China's textile machinery exports have an average profit margin of only 2%-3%, while European companies have at least 8%-15%.

The reason why the price of export products is deteriorating is due to the following reasons:

1. Product homogeneity competition is the mastermind of the vicious cycle of low-cost sales. Zhang Jiancheng, general manager of Qingdao Jingjia Textile Machinery Equipment Co., Ltd., said: “The meager profits formed by low-price competition have a direct impact on the improvement of technology and the development of new products, which in turn leads to a situation in which the quality of many manufacturers is not closed. The host company stated that because spinning frame technology and manufacturing speed cannot keep up with the development of the mainframe, many of the accessories required by customers are imported, which incurs an increase in costs. Under the same export price, the company lost a lot of profits. ”

2. With the price of textile products falling all the way, the prices of raw materials for textile materials such as metal materials have continuously risen and broke the psychological defense line of machinery manufacturing companies again and again. In addition, high cotton prices also have a certain impact on the development of the textile machinery industry. Although current yarn prices still have a certain margin of profit, the pressure will soon appear. Therefore, the utilization rate of raw materials of the machines, such as the combing machine's cotton pick-up rate, will become a decisive factor affecting the investment of textile enterprises.

How to improve - The textile industry's "Twelfth Five-year Plan" development proposal

Textile industry is one of the important industries of China's national economy. It has played an important role in expanding employment, increasing farmers' income, accumulating funds, exporting foreign exchange, prospering markets, raising the level of urbanization, stimulating related industries, and promoting regional economic development. In view of the saturation of the domestic textile machinery market, the development of the international market was once considered one of the development roads by the Chinese textile machinery industry. Then, during the "12th Five-Year Plan" period, how should the country further promote the development of the domestic textile machinery industry and increase the international competitiveness of domestically-produced textile machinery so as to realize the transition from the textile machinery industry to the textile machinery industry?

The first is to insist on independent innovation. Mr. Yan Huachun, a villager in Jiulong Town, Jiaozhou City, Shandong Province, engaged in the processing of textile machinery. He said: “Enterprises should pay attention to the improvement of product technology and the development of new products. China imports a large number of advanced and efficient textile machinery equipment from abroad every year, which not only wastes a lot of The cost of capital, but also the high profit margins of the high-end market. To improve the efficiency and integration of products is also the basis for improving international competitiveness. Especially after the establishment of ASEAN, China should seize the opportunity and improve steadily."

The second is to optimize the layout of industrial regions. Give full play to the basic role of market allocation of resources, actively promote the gradient transfer of the textile industry, promote the convergence of the industrial chain between the eastern coast and the central and western regions, and gradually form an industrial gradient pattern of east-west interaction, division of labor and cooperation, complementary advantages and coordinated development, and upgrade the textile industry in China. The overall competitiveness.

The third is to strengthen brand building. According to Zeng Ping, general manager of Qingdao Dingsheng Wood Machinery Co., Ltd., “Efforts are made to create independent brands and actively promote international operations. In the face of the economic globalization, we have fully utilized two resources and two markets, actively participated in the international division of labor, and developed transnational production. Management, promote the upgrading of industrial structure, expand the industry development space, and truly realize the transition from a “closed economy” to an “open economy.”

Fourth, based on the expansion of domestic demand, we will gradually adjust the proportion of domestic demand for textile fiber processing and the proportion of exports. While satisfying the increasing clothing consumption of the people, it also focuses on the development of home textiles and enterprise textile products with huge market potential, and improves the industrial structure of home textiles and enterprises with a small proportion of textile products.