How Should Textile And Garment Enterprises Respond To The "New Stimulus Policy"?

Old Chen never thought that the new production line would be idle so soon.

"Now the export situation is not very good, mainly in Europe. The situation of domestic sales is also general, and the competition is too fierce." Old Chen, who has his own brand of children's clothing, is a little tired when talking about it, and is no longer a few years ago. In 2009, the overseas market improved, and the domestic market was booming Textile clothing Industry has been listed as the key industry to revitalize. Lao Chen's factory has made some expansion, but the subsequent days are not as smooth as Lao Chen's imagination.

Since this year, the life has been particularly difficult. All Mr. Chen can do is stop one production line after another. Last month, there was a flood of talk about the new economic stimulus policy. "There is no need for any policy support. The support is temporary and will be faced sooner or later." Old Chen seemed very sensible this time. "It's an inevitable choice to practice hard. Two years ago, I really shouldn't rush to the production line, but now it has been put on hold. Many enterprises around me who expanded and merged at that time regret it," he said.

There are indeed many business owners who regret it. Xu Xiaonian, professor of economics and finance at CEIBS, also said that among his students, most of the bosses who were eager to expand in the past few years now regret it.

　　 Stimulatory effect

In 2009, the cold current of the previous year's financial crisis has not receded, but some domestic enterprises have started to move against the current. Most of them carry cash and seek their own development direction.

Lao Chen's enterprise is one of them.

In April of this year, he took his Children's wear brand To participate in the China International Garment Exhibition, "we only rented a small booth this time, first showed a small face in the exhibition, and then will come every year." His words are still fresh in our memory.

This children's clothing brand is their first brand.

Previously, Lao Chen was a department level cadre in Shanghai, and his wife, Ms. Li, served as the chairman of the company. The company only engaged in OEM and all exports.

After the financial crisis, export enterprises were in danger. Seeing the domestic market was booming, Lao Chen and Ms. Li had the idea of creating their own brands. As the export market can not give up, Lao Chen even resigned from public office and devoted himself to creating his own brand. Another purpose of Mr. Chen's coming to Beijing to attend the China International Fashion Expo is to find a way for his new brand to enter the big stores like New Light World. "Their entrance fee is very high, and no one can't get in at all," he said.

Although he failed to enter Xinguang World, his business is getting better and better. "The overseas market has improved again, and now the factory is extremely busy. We have added four production lines, which is not enough. We will subcontract some of them."

The self created brand is still in progress, but it is obvious that there is a lack of separation skills. In the second half of 2009, Mr. Chen always smiles when talking about business.

Not only Lao Chen, but also many textiles Clothing enterprises Both invested heavily in expansion and integration M&A. In addition to seeing opportunities in the industry, "encouragement" from the macro level and support from the policy level are also the reasons why some large enterprises "wait for opportunities".

On November 9, 2008, the Chinese government announced the implementation of large-scale economic stimulus measures, with a total investment of 4 trillion yuan by the end of 2010 for infrastructure construction and increasing bank credit. Since then, some key industries have been listed as key revitalization areas, including textile and clothing. "With the support of government policies, enterprises have a great enthusiasm for expansion or mergers and acquisitions. There are some support policies in terms of capital, loans and taxes." Old Chen was not unusual at that time, and many enterprises took the national support policy as an opportunity of their own.

According to the statistics of China Textile Industry Association in the same year, from January to November 2009, China's textile industry's fixed asset investment projects with more than 5 million yuan actually completed a total investment of 270802 million yuan, an increase of 9.53% year on year, 0.78 percentage points higher than the same period last year.

　　 Cautious response

In fact, textile and clothing is far from the main industry benefiting from the "4 trillion". Relying on the engine of "investment", the Chinese government quickly stepped on the "accelerator" and soon pulled the Chinese economy from the bottom.

Now, the "drug effect" is too strong, the European debt crisis continues to ferment, and it seems that China's economy has been pushed to the edge of decline again. Since April, investment, consumption and industrial added value have all hit a new low for many years, and the growth rate of power generation, steel output and 10 kinds of non-ferrous metal output has declined to varying degrees

In May, after the executive meeting of the State Council set the tone that China's economy should "stabilize growth", many people were thinking about "4 trillion version 2.0". This also makes increasing investment once again become the meaning of the topic.

On May 21 alone, more than 100 projects were approved by the NDRC, and the total number of approved projects was almost equal to the total number of the first 20 days of May;

On May 24, two steel projects with a total investment of more than 130 billion yuan, Fangchenggang in Guangxi and Zhanjiang in Guangdong, were approved. When Wang Zhongbing, mayor of Zhanjiang, walked out of the door of the National Development and Reform Commission, he could not help kissing the approved documents of the projects;

On May 25, Shang Bing, Vice Minister of the Ministry of Industry and Information Technology, revealed that this year's telecommunications infrastructure construction will usher in a new round of construction climax, and the industry's annual investment is expected to exceed 370 billion yuan.

But this time, the enterprise is clearly more sober and rational than the government.

Lao Chen said: "The introduction of national encouragement policies and relevant preferential policies is an important reason why large enterprises dare to expand against the market in the current economic situation. Even some enterprises obtain loan support through expansion mergers and acquisitions to support the flow space of internal funds. Where the money flows is impossible to investigate." "As long as the stimulus policy is over, the excess capacity can not be digested. Now the domestic and foreign markets are not so good, and my production line can only be so idle." He said, "I knew I should try to transform at that time, and should not expand when my head is hot. At that time, it also spent more than 2 million on these four production lines. Fortunately, no other factory was built."

Xu Xiaonian also said frankly at the forum of China's top 500 foreign trade enterprises: "Many of my students were eager to expand at that time, but now most of them regret it."

At the equipment manufacturing investment and development forum in September 2009, Cheng Zhusheng, the preparatory group for the equipment manufacturing industry investment fund, once said directly: "Although the machinery industry is in a period of rapid development in terms of the growth rate of exports and the proportion of exports, it takes time to start the international equipment market. It is a mystery how much stamina and how long the purchasing power stimulated by current domestic policies can last. In the first half of the year, subsidies in all aspects have been used almost, and many purchasing power may have been prepaid in the second half of the year Are the industries that performed well in the first half of the year still performing well in the second half of the year? I can't see that clearly. "

This was also a problem that existed in most industries at that time.

Mei Xinyu, a researcher at the Research Institute of the Ministry of Commerce, said: "The biggest bubble in China's economy is actually the capacity bubble, that is, the serious overcapacity. This bubble reached its climax in 2008. The capacity of export manufacturing expanded, while local government investment and real estate development were also in an overheated stage, which led to the expansion of capacity."

"However, after the international financial crisis in 2008, the fall in foreign demand led to the introduction of the stimulus plan, especially the extremely loose monetary policy, which further stimulated enterprises to expand production capacity. In this way, an excess cycle was formed," he said.

Old Chen said: "We don't have a good way now, but the direction is relatively clear. We should work hard on the high-end. Only in this way can profits be guaranteed."