Together for the future high-quality development of the industry

by Sun Ruizhe President of China

Editors note：

On December 5th， 2019， four conferences including the Sixth Session of the Fourth Executive Council Enlargement Meeting of China National Textile and Apparel Council， 2019 China Textile Innovation Conference， 2019 National Textile Industry Cluster Review Conference， and the Eighth National Conference on Promotion of Management Innovation Achievements in Textile Industry were held in Beijing. During the conferences， Mr. Sun Ruizhe， President of China National Textile and Apparel Council， made a work report entitled “Together for the future high-quality development of the industry”. The report is divided into four parts： The goal of building a textile power in China has been basically completed； The main work carried out by CNTAC in 2019； The new situation and fresh changes in the current industry development； The main work to be done in the next stage by CNTAC. The following is the first part， and the following will be published in the next issue.

Part 1 The goal of building a textile power in China has been basically completed

The performance achieved in building a textile power

China National Textile and Apparel Council（CNTAC） issued the “Outline of Building a Textile Power （2011 - 2020）” （hereinafter referred to as the“Outline”） in 2012 to meet the development needs of building a well-off society in an all-round way. Since the establishment of the goal of a textile power， facing the complex and changing external environment and the new normal in economic development， Chinese textile industry has closely focused on the decisions and plans made by the Party Central Committee as well as the the overall layout of the Five-Sphere Integrated Plan， so as to pursue innovative， coordinated， green， open and shared development with supply-side structural reform as a focus and high-quality development as the direction. It has opened up a new prospect for the development of the industry.

Chinas textile industry has formed the worlds largest and most complete industrial system. In 2018， China textile industrys total fiber processing accounted for more than half of the worlds total； textile and apparel exports accounted for more than one-third of the worlds total. China textile industry has success- fully covered all the world and has made important contributions to the construction of a community with shared future for mankind. The status of the textile industry as a pillar industry of the national economy and an important livelihood industry is even more prominent.

According to the Fourth National Economic Census， as of the end of 2018， the number of corporate entities， total assets， and total operating income of the textile and apparel industry accounted for 9.5%， 4.8%， and 5.4% of all industries， respectively. The number of employee was 11.032 million， accounting for 9.6% of the national industries， which reached 16.12 million plus the people working in wholesale and retail. The proportion of textile and apparel exports in the countrys total exports of goods was 12%； the net foreign exchange earnings of textiles and garments were 250.19 billion USD， accounting for 71.1% of the national trade surplus.

Specifically：

There is a new leap in scientific and technological innovation， which has shifted from “following others” to a harmonious status featured by “following， synchronizing， and leading”. Industry R&D investment and innovation output have increased significantly. In 2018， the R&D investment intensity of textile enterprises above designated size was 0.9%， which was twice the level in 2011. Among them， the chemical fiber industry reached 1.34%， 0.46 percentage points higher than in 2011. The total number of effective invention patents in textile， garments and chemical fibers was 18，854， which was 5.6 times that of 2011； the per capita operating income of textile enterprises above designated size was 758，000 yuan / person， a 46% increase compared with that of 2011. The industry has made major breakthroughs in many fields.

In terms of materials， conventional fibers have taken the lead in the world， while high-performance and highly functional fibers have achieved a change from quantity to quality. Among them， carbon fiber in the civilian field has significant advantages. Highperformance fibers such as high-strength high-modulus polyethylene and meta-aramid have achieved largescale production and reached international advanced levels. Industrial textiles accounted for 28% of total fiber processing， widely used in aerospace， infrastructure and other fields.

In terms of equipment， the level of intelligence， service and greening of textile equipment has been greatly improved， and the overall level and manufacturing capacity are among the highest in the world.

At present， Chinas textile machinery product sales account for about 50% of the worlds total； Chinas textile machinerys domestic market share has reached 80%； the localization rate of key parts and components of the high-end equipment amounts to over 50%； complete digital cotton spinning equipment has also achieved industrial application， and less than 20 people is required for 10，000-spindle spinning. The textile industry has become one of the few industrial sectors in China with closed-loop innovation capabilities throughout the industrial chain. The systematic innovation advantage makes Chinas textile industry increasingly become an important source of global textile technology innovation.

Brand building has reached new heights. The industrys brand awareness， design ability， and creativity have been greatly improved， while leapfrog development has been achieved in terms of quantity， quality， and content. The brand system of manufacturing brands， consumer brands and regional brands is taking shape. Since 2012， “China Fibers Fashion Trends” has released about 150 fiber brands， and “Fabrics China”sees more than 800 shortlisted companies each year.

The Ministry of Industry and Information Technology has announced 46 textile and apparel creative design pilot demonstration parks （platforms）， which have incubated a large number of textile and apparel brands. Outstanding consumer brands such as Anta， Li Ning， Bosideng， Aimer， and Peacebird have begun to come onto the international stage， and a large number of Chinese designer brands have emerged. A variety of outstanding manufacturing companies such as Shenzhou， Shenghong， Hengli， Hengyi， Weiqiao， Ruyi， Luthai， Chenfeng， Sunvim， Loftex， Yueyue， and Hongliu have become industry models for global manufacturing brands. Regional brands are developing rapidly. Keqiao， Dalang， Humen， Puyuan， Shengze， Changshu， Xiqiao， Dieshiqiao， Xingcheng， Binzhou， Jimo， Shishi， Zhili， Xucun， etc. have become popular landmarks and become new business cards for regional development.

The 10 “regional brand pilot zones” identified by CNTAC cover 10，685 companies， and the R&D investment intensity exceeds 1%； 20.2% of the companies have established a brand cultivation management system， and 30.7% have participated in brand professional training； social responsibility construction has been carried out in 9 regions， while 18.6% enterprises in 3 regions have established social responsibility management systems.

Textile intangible cultural heritage has achieved creative transformation and innovative development in the industry. The international influence and radiation of platforms such as Intertextile Shanghai Apparel Fabrics， Intertextile Shanghai Home Textiles， CHIC， and China Fashion Week have been significantly enhanced. The rapid development of industry brand construction has played an increasingly important role in building cultural confidence and improving Chinas fashion discourse power.

Sustainable development has entered a new phase. Social responsibility has become the consensus of industry development. Sustainable development practices are accelerating， and the market for responsible consumption has taken shape. From the supply of raw materials， design and R&D to processing and manufacturing， the entire manufacturing system is accelerating its transformation towards an ecological and green direction. An industrial system for recycling， sorting and reusing waste textiles is taking shape.Since 2016， in the construction of the green manufacturing system carried out by the Ministry of Industry and Information Technology， among the textile industry， 89 types of green products， 69 green factories， and 4 green supply chains have been selected.

As the industry continues to adjust its industrial structure and eliminate outdated production capacity， the total amount of pollutant emissions has decreased significantly. Since the “Twelfth Five-Year Program”period， the water consumption per unit product in the dyeing and printing industry has decreased by 36%， the comprehensive energy consumption per unit product has decreased by 40%， the water reuse rate has reached 40%， and the backward production capacity has been eliminated by 11.6 billion meters.

Technological innovation has reached new heights. Advanced technologies such as energy conservation & emission reduction， and resource recycling have enjoyed rapid promotion and application in the industry. A series of key technologies for clean production， such as low-temperature rapid pretreatment， cold-pad-batch dyeing， and non-aqueous dyeing， have achieved breakthroughs and industrialized production. Since 2016， a total of 24 green manufacturing groups and industry standards have been formulated and revised； the products of 27 chemical fiber companies have passed the “green fiber” logo certification. Sustainable practice has laid a solid foundation for the sustainable development of the industry， and the industry is playing an increasingly important role in building a beautiful China.

Talent construction is characterized by fresh highlights. The supporting factors for the development of the industry have begun to change from the quantity of labor to the quality. Positive progress has been made in the construction of industry talent teams. The education system has been improved， and the training model that pays equal attention to higher education and vocational education with Industry-UniversityResearch collaboration has been put in place.

From top-level design to specific measures， from content coverage to crowd coverage， from teacher team building to student training methods， they are all more systematic； the pace of international cooperation of talents is constantly accelerating， and the scale of two-way study abroad is continuously expanding； teaching tools， teaching management， and teaching content is speeding the digitized transformation.

The talent team is more reasonable， and a textile industry talent team of moderate size， reasonable structure， excellent quality， and vitality has initially formed. The supply of high-level talents in the industry has improved. In 2018， the R&D personnel of textile enterprises above designated size （excluding textile machinery） was 133，000 full-time equivalent， an increase of 61.3% over 2011. A number of outstanding entrepreneurs， scientists， designers， and skilled personnel with the spirit of the times， international perspectives， and professional capabilities have emerged in the industry， playing an important role in demonstration and leadership in the industry.

On the whole， most indicators of Chinas textile industry have reached or even led the worlds advanced level. The goal of the textile power planned by the “Outline” has basically been achieved. Chinas textile industry has become a well-deserved textile power， and the industry is showing strong vigor and vitality in the process of the great rejuvenation of the Chinese nation.

The pressures in the development of Chinas textile industry

The future is bright， but the road never runs smooth. Since 2019， affected by such factors as trade disputes and geopolitics， the growth of the world economy has slowed significantly， and international demand has been sluggish. The IMF lowered the global economic growth four times during the year. The World Economic Outlook， released in October， lowered the global economic growth rate to 3.0% in 2019. Facing the severe external environment and the pressure of real transformation， the development of the industry is in a difficult period.

Production maintained a low growth rate. According to the National Bureau of Statistics， from January to October， the industrial added value of textile enterprises above designated size increased by 2.4% year on year， which was a slowdown of 0.6 percentage point from the same period of last year. In all links of the industrial chain， except for the chemical fiber industry and the filament weaving industry， where the added value maintained a relatively rapid growth， the rest of the growth slowed down. The added value of the chemical fiber industry from January to October increased by 11.5% year on year， a growth rate of 3.3 percentage points higher than the same period of the previous year； the added value of the filament weaving industry increased by 16.2% year on year， which was 9.2 percentage points higher than the same period of the previous year.

End products are under great pressure. From January to October， the added value of industrial and apparel industries increased by 7.2% and 1.0% respectively year on year， and the growth rates slowed down by 1.2 and 3.8 percentage points from the same period of the previous year， respectively. The added value of the home textile industry even showed negative growth. From January to October， it decreased by 1.0% year on year， and decreased by 5.3 percentage points compared with the same period of the previous year. The growth rate of the added value of the textile machinery industry continued to decline， with a year- on-year decrease of 6.0% from January to October， and the growth rate slowed sharply by 17.4 percentage points compared with the same period of last year. With increasing downward pressure， the space for corporate transformation and upgrading has been squeezed to a certain extent， especially for SMEs.

Domestic sales growth has slowed down. According to data from the National Bureau of Statistics， from January to October， the retail sales of clothing， shoes， hats， knitwear and textile above the national limit was 1062.4 billion RMB， a year-on-year increase of 2.8%， and the growth rate was slower by 5.6 percentage points compared with the same period of the previous year， which was 4.9 percentage points lower than that of the total retail sales of consumer goods. Online retailing still maintains a good growth momentum， but since June there have been signs of slowing down month by month. From January to October， the retail sales of online clothing products nationwide increased by 7.1% year on year， and the growth rates slowed down by 15.4 and 14.3 percentage points from the same period of the previous year and the first half of this year， respectively. The domestic consumption potential needs to be further tapped， and the development of traditional retail and online integration need to be upgraded.

The export market is under pressure. Affected by the weakening of the international economic recovery and changes in the trading environment， export pressure in 2019 increased significantly compared with the same period of the previous year， and the adjustment of product structure and market structure accelerated. From January to October， Chinas textile and apparel export value was 232.31 billion USD， a year-on-year decrease of 2.2%. From the perspective of product structure， from January to October， the value of textile exports increased by 0.8% year on year， while the value of apparel exports fell by 4.5% year on year. In terms of export markets， the scale of exports to developed countries has declined， while exports to emerging markets have been more active. From January to October， Chinas exports of textiles and apparel to the United States， the European Union， and Japan witnessed respective year-onyear decreased by 4.5%， 5.0%， and 5.5%； the total exports to the countries and regions along the “Belt and Road” increased by 1.3%； and exports to Africa increased by 6.6% year on year. With the normalization of trade frictions， active structural adjustment is a must for the companies.

The industry suffered sluggish investment. Since 2019， affected by insufficient domestic and foreign demand， the textile industrys willingness to invest has been sluggish， and the decline in investment growth has gradually been severer since June. According to data from the National Bureau of Statistics， from January to October， China textile industry s investment in fixed assets fell by 7.0% year on year. Among them， the fixed assets investment in textile industry decreased by 8.5% year on year， a yearon-year decrease of 0.5% in apparel industry， and a year-on-year decrease of 18.6% in chemical fiber manufacturing industry.

In terms of different regions， 5 provinces and cities including Tianjin showed a good trend of positive investment in the entire industrial chain. Guangdong and Shandong provinces saw rapid declines in fixed asset investment in apparel industry. The textile and chemical fiber industries in Xinjiang Uygur Autonomous Region suffered respectively year-on-year decreases by 45.5% and 52.3% affected by industrial policy adjustments.

The economic operation has fluctuated slightly. Since 2019， the profit pressure of textile companies has increased， and it has become more difficult to improve the quality of operations. According to data from the National Bureau of Statistics， from January to October， the operating income of 34，000 textile enterprises above designated size in the country achieved 4，027.104 billion RMB， a yearon-year increase of 0.2%， which was a slowdown of 3 percentage points from the first half of this year. The total profit reached 168.81 billion RMB， down 8.7% year on year and 4.7 percentage points lower than that in the first half of this year. From January to September， the operating profit margin of textile enterprises above designated size was 4.2%， which was 0.4 percentage point lower than the same period of the previous year， and the profitability of the enterprise decreased compared with the same period of the previous year. The cost pressure of enterprises is relatively large， and the operation fluctuation needs to be taken seriously.

In general， under the complex situation of significantly increased risk challenges at home and abroad， the downward pressure on the textile industry has increased since 2019， but the industry still plays an active role in steady growth and stable expectations.