Apparel / Textiles & Accessories

Huacheng Import and Export Data Observation reports that domestic textile enterprises have relocated their production capacity. On the one hand, the textile and garment industry, as a reservoir for the employment of medium and low-skilled labor, carries a large number of jobs, which is important for ensuring the employment of residents, market players, and industry chains. Stability is important.

According to the Huacheng Import and Export Data Observation Report, the textile and garment industry accounts for 8.4% of the employees, which is higher than the 4.3% of the operating income. At the same time, the relocation of industries will lead to the relocation of jobs, or the rapid shrinking of industries and the tide of bankruptcy, then the risk of domestic unemployment and poverty will also increase.

On the other hand, from the perspective of industrial development, with economic development, the outflow of labor-intensive industries with low added value is an inevitable trend. In the long run, there are two development paths for the textile industry: one is to transfer to the consumer market side, and the other is to transfer to the raw material side.

According to the transfer law of the global textile industry, the first to second industrial transfer is accompanied by the transfer of the world economic center, while the third to fifth industrial transfer is the result of the in-depth social division of labor, and does not cause the substantial transfer of the economic center.

Watson & Band Import and Export Data Observation reported that when the textile industry moved from the United Kingdom to the United States, the GDP of the United States gradually surpassed that of the United Kingdom, and when it was transferred from the United States to Japan, the Four Asian Tigers and China, although the economy of the importing region developed rapidly, it was still a long way off. and does not exceed the output area. The latter few important industrial transfers are more related to the extension of the value chain of the international industry, so more attention should be paid to the transformation and upgrading of the industrial structure in the export area and the import area.

The textile and apparel industry chain is long, the upstream involves the production of natural fibers (such as cotton, hemp, wool) and chemical fibers, the midstream includes spinning, weaving, printing and dyeing and other processing steps, and the downstream includes final products such as clothing, home textiles, and industrial textiles. Production.

Clothing and home textile processing industries belong to the downstream of the industrial chain, with low gross profit. Under the background of industrial relocation, downstream labor-intensive and low-value-added clothing production is slowly being squeezed out.

According to Huacheng Import and Export Data Observation Report, for chemical fibers and fabrics, in 2018, yarn and fabric exports accounted for 30% of global trade, and chemical fiber exports accounted for 40% of global trade. In fact, China is one of the few economies that is a net exporter of clothing, fabrics and chemical fibers; downstream producers such as Vietnam and Cambodia all rely on imported fabrics.

For textile machinery, since 2000, China has been a net importer of textile machinery in most years. However, in recent years, the share of China's loom exports has continued to rise, accounting for 27% of the global loom trade from 2% in 2000 to 27% in 2018. This shows that with the increase in technology intensity and R&D intensity, China's textile machinery has become internationally competitive.

In terms of export share, China has entered the first echelon of textile machinery, and its share has surpassed that of traditional exporters such as Germany and Japan.

Therefore, despite the relocation of labor-intensive and low-value-added garment production, the status of chemical fibers and fabrics in the middle and upper reaches is relatively stable, and the proportion of high-value-added capital goods such as textile machinery in global trade continues to increase.

China's value chain status is gradually upgrading from low-end to high-end, and the textile and garment industry has shown a trend of industrial upgrading in the face of adversity. This is not an opportunity for the domestic textile industry.

Where is the road of China's textile and garment industry?

According to Huacheng Import and Export Data Observation Report, the domestic textile industry is dominated by private enterprises and small and medium-sized enterprises. Leading enterprises have capital and technological advantages. Transferring production capacity overseas can obtain local cost advantages. However, the threshold for overseas deployment is relatively high, and the initial investment quota and cross-border management of personnel bring difficulties to small and medium-sized enterprises.

Textile companies that have transferred production capacity to Southeast Asia have also encountered some difficulties.

First of all, the industrial chain in Southeast Asia is not mature, and it can only make OEM products. Some companies need to purchase raw materials in China, transport them to the destination country, and then process them into garments for export. The logistics costs incurred offset the labor force and production power to a certain extent. cost advantage.

Secondly, the quality of local workers in Southeast Asian countries is generally not high, and the production efficiency is low. Some business owners said that the production efficiency of domestic factories is about 2.5 times that of overseas factories, which almost completely disappears the labor cost advantage of a single worker.

Finally, language barriers are also problems that Chinese companies must face. Some Chinese companies do not understand the language when they set up factories in Southeast Asian countries, and they have to ask for translations for everything, which incurs a lot of manpower and time costs.

The future development direction of labor-intensive industries is still towards the raw material side and the consumer side.

In the global value chain, the brand and sales are mainly controlled by the United States, Europe and a few Japanese and Korean companies. Japan and South Korea are in the leading position in the production of advanced fabrics, and Australia has the right to speak in high-quality wool and other raw materials. While China, Southeast Asia and South Asian countries are mainly located at the lower end of the value chain.

China's future development direction is to increase the added value of products (such as the research and development of fibers and textile materials), to extend the sales of high-quality raw materials and brands at both ends of the industrial chain, and to transfer the low value-added parts of the industry to neighboring countries.

Compared with Southeast Asian countries, my country's textile and garment industry has a relatively complete and complete industrial chain, as well as a vast land area. It also has an important production base for some high-quality raw materials such as cotton and wool. my country has high-quality textile technical workers, high production efficiency, and the chemical industry is developing rapidly, and it is relatively easy to transfer to high-end raw materials.

In addition, my country has a huge consumer market. With the upgrading of residents' consumption and the development of domestic brands, it will help the textile and garment industry and the transfer of brand design. At present, the accumulation of some domestic brands with good reputation has achieved results.

Due to the huge advantages of textile and garment volume and industrial chain support, the position of China's textile and garment industry in global trade is still difficult to shake. Taking Vietnam as an example, the spinning capacity is gradually shifting to Vietnam, but the main export destination of Vietnamese cotton yarn is still the Chinese market. , and imported synthetic yarns are mainly from China. From this point of view, Vietnam's textile industry is more like a supplement to China's industry.

Therefore, although the textile and garment industry has shifted, the current status of my country's manufacturing and processing power is still difficult to shake in the short term.

Although facing the pressure of rising labor costs, our current supporting infrastructure and labor quality still have great advantages, and the production quality and efficiency are still higher than those of Southeast Asian and South Asian countries. Industrial upgrading, the migration of my country's industries to value-added high-end manufacturing is an inevitable trend.