Finding The Most Difficult Cause Of Textile Industry In 2008

According to Xu Wenying, vice president of China Textile Industry Association and President of China Cotton Textile Industry Association, compared with the impact of the international financial crisis, the domestic macro policy in the first half of 2008 brought more impact on the industry.

Xu Wenying believes that the adjustment of domestic macro policies is the primary reason for the serious difficulties of the textile industry in 2008.

In order to curb inflation and reduce trade surplus, in August 1st September 1, 2007, the textile export rebate rate dropped from 13% to 11%; secondly, the continued appreciation of the RMB made the cost of traditional textile export enterprises rise significantly or even losses; third, in order to control excessive export growth, the margin system for textile export processing trade enterprises was increased, and the export cost of export enterprises increased significantly; fourth, the sliding tariff policy of importing cotton to textile enterprises continued to levy 5%~40%; in fact, the tariff of imported cotton has reached 8%~9% in recent years, which has increased the tax burden on cotton spinning enterprises; fifth, the price of raw and auxiliary materials and the price of energy and energy have risen sharply, resulting in a substantial increase in costs; sixth, the labor cost has risen too fast.

The increase of wages will inevitably increase the cost of enterprise products. The introduction of the new labor contract law has also increased labor costs, which may cause many foreign enterprises to withdraw to countries with lower labor costs, such as Vietnam. Seventh, the tight monetary policy of the state has caused serious difficulties for enterprise funds, and the increase in interest rates and reserve requirements of banks has reduced the scale of loans, which is the main reason for crushing enterprises.