Export Tax Rebate Raised, Textile Industry Went Sick Like Silk

The Chinese textile industry is proving the old Chinese saying that the prescription of increasing export tax rebate cannot make the heavily affected Chinese textile industry recover immediately.

"Now the industry has entered a bad situation, and I hope the government can give more preferential treatment." Gao Yong, Vice President of the Textile Industry Association, said that the textile industry export tax rebate adjustment is the "care" that the textile industry association applied to the State Council for four months.

However, the National Development and Reform Commission obviously cannot meet the further requirements of the Textile Industry Association, The focus policy directly pointed out by both sides is the tax preference for the textile industry.

Increasing export tax rebate will not save the city

From the second half of 2007 to 2008, China's coastal manufacturing enterprises suffered from unfavorable export and large-scale bankruptcy due to a combination of factors such as lower demand in the United States, RMB appreciation, rising labor prices, and rising raw material prices. From January to June this year, China's textile and clothing exports reached US $81.7 billion, a decrease of 6.4 percentage points over the same period last year.

The market rescue policy is always late. It was announced nearly four months after the textile industry association wrote to the State Council to request an increase in export tax rebates. Since August 1, China has increased the export tax rebate rate of some textiles and clothing from 11% to 13%, and the export tax rebate rate of some bamboo products to 11%.

"Four months ago, the situation of the industry was not very good, but now it is' bad '. We can't expect this policy to change the situation of the industry." Gao Yong, vice president of the Textile Industry Association, was disappointed. "An increase of 2 percentage points only made up part of the losses of the enterprise."

The letter to the State Council was submitted to the State Council after the two sessions were held in April this year and the textile industry association organized a nationwide investigation. Participants in the survey revealed that "the survey results were greatly unexpected, and the bankruptcy situation in Guangdong Province was the most serious".

Subsequently, the Textile Industry Association predicted that the textile industry would reach the bottom in the second half of 2008, and the reduction of export tax rebates at this time would not make any difference in this decline.

In addition, the employment problems caused by the closure of the factory also followed. It is understood that the textile industry employs 20 million workers. In the industry, factory closures and arrears of workers' wages occurred in succession. Li Dongsheng, vice president of Silly Group, a clothing brand that has suffered from shortage of migrant workers for many times in recent years, told reporters that the problem of shortage of migrant workers did not appear in the past this year, "instead, we are selecting workers."

According to a person from the National Development and Reform Commission, "it is precisely because of the large number of employed people in the textile industry that the government has paid great attention."

Textile enterprises "sell themselves" to survive

If they don't sell themselves, they will face greater losses. "Many medium-sized enterprises have come to find buyers." Han Jiasheng, the project manager of the Textile Industry Association, met many old friends in the industry at a textile machinery exhibition held in Shanghai recently. These people are all worried. "They want to see at the exhibition which enterprises have money and can buy them." Han Jiasheng said, "In fact, most of the export-oriented enterprises want to sell themselves to domestic enterprises."

Lou Min, a businessman who used to do garment processing for Adidas and Wal Mart, is one of the "people seeking to sell". In 2006, he spent 6 million yuan to buy garment sewing machines and other garment machinery. Now, due to the same unfavorable export, he has closed the factory and can only sell the equipment. "This morning, someone offered 500000 yuan to buy the equipment I bought for 6 million yuan." Lou Min was very helpless, "I hope to find a better buyer."

However, enterprises with good operating conditions are unwilling to accept offers. Chen Yongbin, general manager of Mengshuya Pants, told reporters, "Not long ago, the government introduced that it wanted us to buy a clothing enterprise, but we didn't consider it."

Mengshuya is an enterprise focusing on domestic sales and channel development in the mode of chain franchise. "We are in a very good business situation now, and are expanding and buying new production lines. We would rather build new production lines than buy bankrupt enterprises."

Chen Yongbin's purchase of the factory is not a matter of money. "The relationship with the local government, the unemployment of workers, and the integration with the original team will all form obstacles."

Only the restructuring of enterprises partially facilitated by the government will make progress. Not long ago, Shandong Yinghua Group, the former top 20 enterprise in the textile industry, was integrated by Ruyi Group under the cooperation of the government. A person from the Textile Industry Association told reporters that "some production lines of this enterprise have stopped production." A person from the office of Cherry Blossom Group said, "We haven't received the information about the production line stop, but the enterprise really has a hard time surviving."

Debate on Policy Saving the Market

It is understood that the textile industry association's application for market rescue has been approved twice by the "highest level" and "paid attention to".

"The focus of policy consideration is: first, the textile industry is related to the employment of 20 million migrant workers; second, the textile industry's export originally had great advantages, but now it has been greatly impacted, so it should be paid attention to and supported by policies." A person from the National Development and Reform Commission revealed the policy orientation to reporters.

The person and Gao Yong, vice president of the Textile Industry Association, told reporters that the next policy benefit would come from the financial sector. "Now textile enterprises are facing a major problem that credit is tight, and loans are difficult. Some enterprises even seek funds through private lending." Gao Yong said, "Now we need to increase the scale of credit for textile enterprises." It is understood that this content has also been written into the "Application Letter" of the Textile Industry Association to the State Council.

Because the textile industry is a low profit industry, working capital is particularly important for enterprises. Shandong Yinghua Group, the former top 20 enterprise in the textile industry, was integrated by Ruyi Group because of its debts of 890 million yuan. "After integration, part of the bank loans can be repaid."? script src=>