“It is really difficult to do textile business now, and the profits are getting lower and lower. Even the cloth produced by some weaving factories in peripheral areas is sold directly at the price of raw materials, making it difficult to do a profitable business now. .” A textile boss who runs a weaving factory complained.
This year, the deepest feeling among textile people about the industry is “involution”. If a piece of fabric here dares to reduce profits by 3, someone nearby dares to reduce it by a piece, and another factory will If you don’t dare to make profits, then there may be manufacturers who will accept losses in order to sell goods. There is no winner in the end. Why is China’s textile industry so complicated?
Overcapacity, encountering the “Volume King” again
Since the rectification of water-jet looms in Jiangsu and Zhejiang in 2018, loom production capacity has begun to transfer to peripheral areas. Textile industrial parks in peripheral areas have been built one by one, and the growth rate of production capacity has exceeded expected.
However, production capacity has increased, but demand has decreased instead of increasing. This year is already the third year of the COVID-19 epidemic. With the exception of China, almost all other major economies in the world have been “flattened”, causing serious impact. Not to mention the serious sequelae and social problems brought about by the new crown epidemic, from the perspective of labor force and statistical data, millions of people in the United States lose their ability to work due to the epidemic every year, and companies have to hire more employees in order to operate normally. , the output is not as good as before, which directly increases the company’s labor costs. Social output has decreased, the global economy has encountered difficulties, and the demand for textiles has naturally decreased.
At the same time, some “Volume Kings” also came to compete. In recent years, it has become a trend for major polyester manufacturers to invest in weaving factories. Compared with the in-rolling of ordinary textile companies, major polyester manufacturers were once the winners in the in-rolling of the polyester market, and their yarns If it is your own, the venue will be larger, more standardized and digital, and the cost will naturally be lower.
What China Textile has encountered this year is that its production capacity has increased, but demand has shrunk, and the upstream “roller king” has personally gone out to open the coils together.
Old European and American updates
At this time, some friends said, why don’t European and American countries use such curls? In fact, they have not always been like this.
One of the reasons why China’s textile market is so huge is that there are indeed a very large number of companies. Thousands of companies are there, and competition depends entirely on self-restraint. It’s okay when the market is good, but when the market goes bad, of course it’s more important to survive, and vicious competition is inevitable.
European and American countries have been involved in disputes since the 19th century or even earlier, and it was even more exaggerated at that time. They were not involved in disputes with other factories, but with slave owners. In the end, it was really unsustainable. The United States fought the Civil War and Europe fought two world wars.
After the Cold War, because of the existence of the Soviet Union, European and American countries also began to protect workers’ welfare. Just like Che Guevara said, After we leave, they will build schools and hospitals for you and raise your wages. This is not because of them. Conscience finds out that it is not because they have become good people, but because we have been here.
At the same time, only a few giants were left in the factories that were originally rolled out, and the market was cleared. At this time, there was no need to roll back again.
But there is also a problem, that is, this model is more suitable for the existing market, but it will be insufficiently competitive in a rapidly growing market. Therefore, in emerging industries such as new energy, photovoltaics, and the Internet, Europe’s competitiveness is obviously not as good as ours.
Problems caused by rapid development
In addition, the deeper problem involved in China’s textile industry is that China is developing too fast. It has only been 40 years since the reform and opening up. China has gone through a journey that took European and American countries over hundreds of years. This is a remarkable achievement.
Development can solve some problems and cover up some problems, but…��Many problems have also been left over from the rapid development, and they are getting bigger and bigger as time goes by. The earliest batch of textile bosses in China came slowly from the era of involution and experienced price wars and vicious competition.
In the process of development, a major problem that China has encountered is that there is no money in the society. Without money, the interest rate is high. The interest rate of some private loans can reach more than ten percent, various mortgage guarantees, and even triangular debts have been derived from this. Crisis is such a thing. Therefore, the older generation of textile workers often focused on quick money. It was not that they did not want to lay a solid foundation and start slowly, but that many companies that made long-term investments could not survive under the competitive conditions at that time, which ultimately resulted in a certain Due to this degree of path dependence, I feel that “volume” is the solution to the problem.
But we have also seen that many second-generation textiles have gradually entered the textile industry in the past two years, and they often adhere to different concepts from the previous generation. Their financial pressure is relatively less severe, and they are not constantly threatened with bankruptcy. They also believe more in technology, focus on talents, and pay more attention to the long-term development of the company. In the context of the epidemic, these companies are also significantly more competitive than traditional textile companies.
After the epidemic, many high-end foreign industries have accelerated their transfer to China. In the past, it was not that China could not do these things, but it lacked corresponding opportunities. Therefore, we see that even if the global economy is so bad, China’s exports are still growing positively. Industrial upgrading and increasing added value are the best ways to eliminate involution.
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