Analysis of influencing factors

First, favorable factors

(1) The policy is good

On September 28, 2016, the Ministry of Industry and Information Technology issued the “Textile Industry Development Plan (2016-2020)”. The "Planning" proposes to focus on improving the quality and efficiency of development, to promote the supply-side structural reform as the main line, to focus on the "three-product" strategy of increasing varieties, improving quality, and creating brands, enhancing industrial innovation capabilities and optimizing industrial structure. Promote smart manufacturing and green manufacturing, form new kinetic energy, create new competitive advantages, promote the industry to the middle and high end, and initially build a textile power. "Planning" put forward specific tasks from six aspects: improving industrial innovation capability, vigorously implementing the "three products" strategy, promoting textile intelligent manufacturing, accelerating the process of green development, promoting regional coordinated development, and enhancing the comprehensive strength of enterprises. As a special plan to guide the development of the textile industry during the 13th Five-Year Plan period, the Plan will promote the transformation and upgrading of the textile industry and create new competitive advantages.

(2) New mode of "Internet + textile"

The textile industry is suffering from the risk of slow sales. The industry can make a big difference through the application of the "Internet +" model. On the one hand, industry companies can use the Internet to establish a sales platform that directly faces end customers, and at the same time, they can obtain direct feedback from customers on the products they produce in order to make timely strategic advances. On the other hand, big data technology based on the Internet platform is equal to the enterprise. It can better establish relevant early warning models, analyze product supply and sales trends and customer preference fluctuations, so as to be able to grasp business opportunities in time and remove bad products in time. In addition, the continuous development of the Internet can effectively improve the efficiency of enterprise management, and conduct unified management of production, finance, and after-sales through streamlined operations, and strengthen organizational management.

(III) Adjustment of regional industrial structure

The “One Belt and One Road”, the coordinated development of Beijing-Tianjin-Hebei and the three strategic implementation of the Yangtze River Economic Belt provide new opportunities for promoting the coordinated development of the textile region. The construction of the core area of the Xinjiang Silk Road Economic Belt and the implementation of a series of policies to support the development of textile and garment industry in Xinjiang will promote the development of Xinjiang's textile industry to a new level. Promoting the construction of new urbanization, especially guiding the urbanization of 100 million people in the central and western regions, will enhance the endogenous driving force for the development of the textile industry in the central and western regions. The adjustment of the global textile division system and the acceleration of the reform of the trading system will promote enterprises to more effectively use the two markets and resources, and more proactively “go global” to enhance the internationalization level of the textile industry and create a new situation for the open development of the textile industry.

(4) Intelligent production

Under the background of rising labor costs, upgrading the digital and intelligent technology level of textile equipment has become an important means for the textile industry to improve labor productivity and product quality stability. First of all, the introduction of high-end production machines can alleviate the urgent needs of enterprises for textile workers to a certain extent, and replace the growing wages and salaries with the depreciation cost of machines, which better shifts the risk of rising labor costs. Secondly, the introduction of intelligent production network allows enterprises to better grasp the whole process of product production, so that enterprises can reduce production costs. Intelligent platforms can also improve product accuracy and make textile products more sophisticated than artificial limits.

Second, the unfavorable factors

(1) Cost advantage no longer

In recent years, the cost of China's textile industry has increased significantly, and the cost advantage is no longer. China's textile industry faces four high costs, first of all labor costs. With the demographic dividend of China's cheap labor, the rise of the textile industry in Southeast Asia and other places, the foreign environment has brought severe challenges to domestic textile companies. In the "re-industrialization" of developed countries and the accelerated extrusion of industrial processes in developing countries, the labor cost advantage of developing countries in Asia and Africa is obvious; the international comparative advantage of China's textile industry is weakening. The second is: energy costs, transportation costs and environmental governance costs.

(2) Lack of professional talents

Textile workers are scarce every year, and skilled workers are in short supply. With the social transformation, the mass education level has been improved overall, and the younger generation is less willing to engage in textile and other technical industries. Workers are no longer the primary choice for young people to work, and textile factories are in a state of disappointment.

Textile companies lack innovation and textile designers lack creativity and imagination. Most textile companies are foundry models, and the main profit of finished products belongs to the textile design party. Domestic textiles are more difficult to obtain market recognition and are given higher prices. The added value of production products of enterprises is low, and most of them rely on “small profits but quick turnover” to obtain economies of scale.

(3) Overcapacity of low-end products

Chinese textiles and garments have traditionally occupied the international market with low-priced exports. Although the export volume is large, the added value of products is significantly lower. At present, the effective supply of high-end products in China's textile industry is insufficient, and low-end products have staged and structural overcapacity. It is expected that the supply reform of the textile industry will continue to eliminate backward production capacity, especially in the context of high labor costs, the future living space of low value-added products will be more limited.

Sales revenue forecast

In 2016, China's textile enterprises above designated size achieved sales revenue of 4.09 trillion yuan, an increase of 1.73% year-on-year; in 2017, sales revenue was 3.80 trillion yuan, a decrease of 7.08% year-on-year. We expect that China's textile industry sales revenue will reach 3.88 trillion yuan in 2018, and the compound annual growth rate will be 2.84% in the next five years (2018-2022). In 2022, China's textile industry sales revenue will reach 4.34 trillion yuan.

Total profit forecast

In 2016, the total profit of China's textile enterprises above designated size reached 219.41 billion yuan, a year-on-year increase of 1.23%. In 2017, the total profit was 197.65 billion yuan, a year-on-year decrease of 9.92%. We expect that the total profit of China's textile industry will reach 2008 billion yuan in 2018, and the compound annual growth rate will be 2.95% in the next five years (2018-2022). In 2022, the total profit of China's textile industry will reach 225.6 billion yuan.