Interview With Zhou Hong, President Of Shandong Binzhou Textile Industry Association

In the less private sector of Shandong Province, Binzhou is rich in giant private cotton textile enterprises, such as the world's largest cotton textile enterprise, Wei Qiao, Asia's largest towel enterprise, Yaguang group and China's largest shuttle dyeing and printing enterprise (4.37, 0.03, 0.69%). Binzhou's textile industry is not only a barometer of China's textile market, but also an important part of the world's cotton textile market.

In 2014, export oriented Binzhou Textile industry After the international financial crisis, we are steadily recovering. Zhou Hong, President of Binzhou Textile Industry Association of Shandong Province, said that the textile industry in Binzhou and even China still needs to break through five constraints: raw material price, labor cost, quota system, taxation and product structure.

　　 The biggest problem is the supply of raw materials.

Reporter: what is the current status of Binzhou's textile industry?

　　 Zhou Hong Binzhou has a long history of cotton planting and weaving. After many years of development, Binzhou's textile industry has now formed a huge industrial system.

There are more than 800 textile enterprises in Binzhou, nearly 400 enterprises of above scale, all are private joint-stock enterprises, among which 3 are listed companies. There are 16 enterprises selling over 100 million yuan, and more than 350 thousand textile workers in the city. Some leading enterprises occupy an important position in the world textile industry.

　　 Reporter: with the worldwide economic slowdown, what is the export situation of Binzhou's textile products?

Zhou Hong: from 2005 to 2008, the export volume has been showing an upward trend, reaching about 1000000000 US dollars. But after the financial crisis in 2009, exports declined briefly. From 2011 to now, the industry is in recovery and exports are relatively stable.

The main export places of Binzhou textiles are the United States, the European Union, Hongkong, Japan and South Korea, which are more concentrated. They hope to expand the export market in the future. In recent years, we have found that the export of deep-processing products has increased rapidly, while the export volume of primary products has declined and profit margins are very low.

　　 Reporter: in your opinion, what are the constraints of Binzhou's textile industry?

Zhou Hong: the biggest problem is the supply of raw materials. The annual cotton consumption in Binzhou is about 1 million 500 thousand tons, while the local cotton production is less than 200 thousand tons, and cotton resources are in short supply. But with the addition of new cotton and other imported cotton, Xinjiang cotton can basically guarantee the normal production demand.

But the price inversion has a greater impact, and domestic cotton prices are higher than international prices. Take the United States as an example, the latest data is that the price of cotton per ton in the United States is 12 thousand or 13 thousand yuan, and China's price is as high as 20 thousand yuan / ton. Cotton prices in developing countries such as India and Pakistan are lower and cheaper than 1/3 in China. Since the end of 2012, China's cotton price index has basically maintained at 19000 yuan -20000 yuan per ton. At the same time, in order to protect the interests of cotton farmers, the state stores and stores cotton at high prices.

　　 cotton The material cost accounts for 70% of the total cost of the textile industry, and the profit margin of the textile industry is not more than 5%. Therefore, the slight fluctuation of cotton price has great impact on the textile enterprises.

　　 Reporter: since the price of cotton in the international market is lower, why not import raw materials?

Zhou Hong: cotton import quotas are limited. At present, domestic cotton is far from meeting the needs of production and needs a large number of imported cotton. However, the annual total quota of imported cotton quotas increased by a small margin and the distribution of enterprises decreased.

The quota of imported cotton has always been a special commodity controlled by the state. The cotton imported over the quota will be charged 40% of the high tariff. For small businesses that do not easily get cotton import quotas, they can only get quotas by purchasing quotas, with an additional payment of 3000-4000 yuan per ton quota, which has led to an increase in the cost of enterprises.

　　 Reporter: what are the constraints of tax policy?

Zhou Hong: cotton textile enterprises in the current value-added tax deduction, procurement of cotton input tax rate of 13%, the final product sales tax rate of 17%, long-term existence of "high levy low deduction" problem, enterprise tax burden heavy, low profit margins.

　　 Product structure needs adjustment

Reporter: does the exchange rate affect the textile industry?

Zhou Hong: the appreciation of RMB has a great impact on the profitability of enterprises. Cotton textile generally adopts the direct pricing method, and the exchange rate of RMB will rise, which will reduce the income of textile enterprises after converting into RMB. At the same time, the appreciation of the renminbi will also affect the orders of the enterprises.

　　 Reporter: I see Wei Qiao business and other enterprises long-term recruitment, at present, is there enough labor supply?

Zhou Hong: it is not only the Pearl River Delta and the Yangtze River Delta, but also the difficulty of recruiting workers and the difficulty of retaining them. The textile industry is a traditional labor-intensive industry.

Wei Qiao started a better job in retaining people. The wages of textile workers were nearly 4000 yuan, higher than the average level in Binzhou. Workers with long working life could also buy houses at below market prices, and they had subsidies on daily expenses such as water, electricity and gas.

However, although the income of the textile industry is fairly good in Binzhou, the labor intensity of this type of work is large, the time is long, the environment is rather difficult, and some people are unwilling to do so.

On the contrary, India, Pakistan and other countries not only have an advantage in cotton prices, but also low labor costs, which will create enormous pressure on China's cotton textile exports.

　　 Reporter: what links do Binzhou textile industry need to upgrade?

Zhou Hong: Binzhou's cotton textile industry is mainly made of primary products with low added value and low profit margins. Although there are decorative, bedding, clothing, towels, knitwear, but a smaller proportion. There are still structural contradictions in the industrial chain. In the future, enterprises should pay more attention to design, research and development, sales and other aspects, and increase their proportion in downstream products.