Textile industry development in 2019: textile industry expansion slowed down, industry investment mo

The growth rate of textile industry continues to decline, and the industry investment is more rational. At present, the industry has sufficient capacity and the utilization rate continues to rise. In the long run, the trend of domestic capacity transfer to overseas will continue.



In recent years, the textile industry has maintained a trend of expansion, but the growth rate has slowed down significantly, and the industry investment has become more rational. In 2017, the total investment in fixed assets in textile industry reached 693.614 billion yuan, an increase of 5.9%, a decline of 4.8 percentage points compared with 2016; in the first half of 2018, the total investment in fixed assets increased by 0.8%, a slowdown of 6.3 percentage points compared with the same period last year. At present, there are new stages of changes in the form of production organization, factor comparative advantage, market competition pattern and resource and environment constraints of textile industry. Restricted by the adjustment of industrial structure, blind expansion can be curbed. It is expected that the overall investment of textile industry will be more rational in 2019, and the growth rate of industry scale will remain at a low level.



In recent years, the growth rate of added value of textile industry has accelerated to decline. In 2017, the value added of textile industry above scale increased by 4% year on year, and the growth rate fell by 1.5 percentage points. In the first half of 2018, the value added of textile industry above scale increased by 1.1% year on year, and the growth rate fell by 3.4 percentage points. In terms of the production of cloth and yarn, the production of cloth and yarn in 2017 increased by 69.560 billion meters and 405.0 million tons respectively, while the production of cloth and yarn in the first half of 2018 increased by 26.720 billion meters and 16.738 million tons respectively, but the growth rate declined compared with the same period in 2017. At the end of June 2018, the final inventory value of finished products of Enterprises above the scale of textile industry (whose main business income is more than 20 million) was 138.45 billion yuan, which is still at a high level. In 2017, the productivity utilization rate of textile industry was 80.2%, up 4.2 percentage points from the same period last year. In the first half of 2018, the productivity utilization rate of textile industry further increased to 81.1%. It is expected that the growth rate of added value of textile industry will shrink further in 2019, but the production capacity is still sufficient, and with the renewal of technology and equipment, the utilization rate of production capacity is expected to further improve.



There is a tendency for domestic production capacity to shift overseas. At present, many domestic listed textile companies have begun to expand their overseas production capacity, including Lutai A, Bailong Oriental and Tianhong Textile, the leading enterprises in the industry. As early as 2006, Tianhong Textile began to distribute overseas production capacity in Vietnam, which reached 1.25 million spinning capacity in 2017. Blum Oriental Textile Project in Vietnam was put into operation in 2012. At the end of 2017, Blum Oriental Overseas Capacity accounted for about 42% of the company's total capacity. Lutai A has established production bases in Vietnam, Cambodia and Myanmar, among which 30 million yarn-dyed fabric projects in Vietnam in 2017 have been put into operation. Considering that China's labor costs continue to rise, the cost advantage of manufacturing industry is gradually weakened, and labor costs in Southeast Asia, South Asia and other countries are cheaper, in the long run, the trend of domestic capacity transfer overseas will continue.  



Domestic textile and apparel demand growth rebounded weakly, but the adverse impact of downward economic growth on the end demand of the textile industry will continue. It is expected that the industry demand will maintain a low growth rate in 2019.



In recent years, domestic textile and apparel industry demand growth has rebounded weakly and retail sales have been steadily improving. It is expected that the industry demand will maintain a low growth rate in 2019. With the development of urbanization and the increase of disposable income per capita, the total retail sales of social consumer goods in China are increasing continuously. In 2017, the total retail sales of social consumer goods totaled 36.62 trillion yuan, which increased by 10.2% year on year. Since 2011, the demand growth rate of textile and apparel (including shoes and hats, needles and textiles) has been declining for six consecutive years, and the growth trend is obvious. However, in 2017, the demand growth rate has stabilized. The retail sales volume of apparel, shoes and hats, needles and textiles of Enterprises above the quota in China was 1.46 trillion yuan, up 7.8% year on year, and the growth rate increased by 0.8 percentage points year on year, but still lower than that of social consumer goods in the same period. Total sales grew by 2.4 percentage points. From January to June 2018, the retail sales volume of clothing, shoes, hats, needles and textiles of Enterprises above quota was 665.09 billion yuan, an increase of 9.2% over the same period of 2017, while the total retail sales volume of goods above quota increased by 7.2% over the same period of 2017. Compared with other consumer goods, the performance of textile and apparel consumer goods has increased steadily since this year. In view of the downward pressure of China's economic growth, it is expected that the industry demand will maintain a low growth rate in 2019.



Textiles export end is warming up, but Sino-US trade frictions will adversely affect exports < br />.


China's textile and apparel exports have shown a negative growth trend since 2015, which was improved in 2017. Textile yarns, fabrics and products valued in US dollars in 2017 totaled US$109.771 billion, an increase of 4.5% over the same period last year; textile yarns, fabrics and products totaled US$58.330 billion from January to June 2018, a cumulative increase of 10.20% over the same period last year. Since this year, exports have continued a better growth trend in 2017. At present, the overall trend of textile exports has warmed up, reversing the decline in 2015 and 2016.



However, the ongoing Sino-US trade frictions in recent years will have a negative impact on textile exports. In 2018, the Trump government imposed ldquo; a package of tariffs on many products in China. After China's response to the US tax increase, on July 10, 2018, the Trump government threatened China 2.A 10% tariff is levied on $100 billion of goods, including all kinds of textile yarns, fabrics and manufactured goods for industrial use. Only terminal goods such as clothing and home textiles are not included. Later, the Trump government announced that it would impose 10% tariff on September 24, 2018 and 25% tariff on January 1, 2019, which would create some uncertainty about the trade environment of textiles in China. According to the statistics of China Textile Import and Export Chamber of Commerce, in 2017, China exported 45.64 billion US dollars in textile clothing and raw materials to the United States, accounting for 16.9% of the total export value of textile clothing. This tax list will affect China's export value of textile clothing to the United States of America, accounting for about 10.3 billion US dollars, 22.6% of China's export value of textile clothing and raw materials to the United States, and 3.81% of China's



According to the People's Daily on December 2, 2018, State Councilor and Foreign Minister Wang Yi said that China and the United States agreed to stop imposing new tariffs on each other. The U.S. government imposed a 10% tariff on China's $200 billion products, which was originally scheduled to rise to 25% on January 1, 2019. Now it has decided to remain at 10% on January 1, 2019. Both sides have decided not to impose new tariffs on new products. Considering the 10% tariff increase in 2019, it is still not conducive to the export of textile industry.



Since the end of April 2018, the mid-price of the US dollar against the RMB has started to rise. The devaluation of RMB, to a certain extent, cushions the impact of the trade war on textile and garment export enterprises, and is good for the textile and garment industry which depends on exports. If the devaluation trend of RMB exchange rate continues, textile and garment enterprises will get more export orders, increase enterprise income and raise gross interest rate of export enterprises.



Domestic cotton output upward pressure is greater, and with the digestion of national cotton storage stocks, the gap between supply and demand of cotton in China may continue to expand in the future. The cotton price in the medium and long term has an upward trend, which will bring certain pressure to the profitability of cotton spinning enterprises.



China's cotton planting area continued to decline, the domestic cotton output upward pressure is greater, the future gap between supply and demand of cotton in China may continue to expand. In 2017, the domestic cotton planting area was 3.23 million hectares, which was 120,000 hectares less than the previous year. The annual cotton yield was 4.19 million tons, which increased slightly compared with the previous year. The overall trend of cotton yield was weak. As of September 30, 2018, the end of the year's cotton rotation, a total of 4312,000 tons are planned to be discharged from the warehouse, and 2.56 million tons are actually traded. With the rotation of national cotton storage and the decrease of stock year by year, the gap between supply and demand of cotton in China may continue to expand in the future.



China's cotton prices have risen since 2016 and remained stable in 2017. Since mid-May 2018, spot prices of 328 cotton have been rising all the way, with a peak of 16 per ton on June 19, 2018.402.00 yuan, up 9% from May to June. However, in the short term, due to the new cotton market, unit yield improvement, and poor trading expectations and other comprehensive factors, the spot cotton market is depressed, the short-term upward pressure is greater. Considering that the gap between supply and demand of cotton may continue to expand, in the medium and long term, China's cotton price has an upward trend. For textile enterprises with cotton as the main raw material, the purchase cost of raw materials accounts for a higher proportion of the total cost of enterprises, and the rising price of raw materials forms a certain pressure on the cost of cotton textile enterprises.