Under the pressure of increasing foreign trade situation, those who rely on cheap labor to win over the long-term textile companies are now flies right?

Recently, the first ten data such as the Forum, the China Textile Industry Association president Wang Tiankai held in Guilin, provided show that from 2011 to 2014, eight months, textile enterprises above designated size industrial added value at constant prices year on year increase of 10.7 8 months ago%, 10.8%, 8.3% and 7.4% in 2014, above-scale textile enterprises have entered the main indicators of single-digit growth, including the main business revenue growth of 8.2%, exports grew 5.7%.

Tiankai said data changes show that China's textile industry has entered a rapid growth by changing the medium-speed growth period began deep restructuring, accelerate the transformation and upgrading of the new stage.

Reality pressure

Under the cost of upgrading and the impact of RMB appreciation pressure China to participate in international competition in the textile industry has significantly increased. However, due to the value-added products to enhance exports, foreign investment and trade and business activities in emerging markets open channel, the international market share of Chinese textile and apparel industry in general remained stable at about 37% level.

Secretary-General of the National Development and Reform Commission Zhang Yansheng Academic Committee of the Economic Observer newspaper said the Chinese economy into a new norm, foreign trade will be entering a new norm. After China's textile and garment industry since 2005 after the appreciation of the RMB has experienced, rising wages for migrant workers and US and European anti-dumping sanctions against China three big impact, great changes have taken place in the production of enterprises to improve the technological content, machines and technology instead of simple human, automated, is an inevitable trend.

Currently, RMB appreciation, rising labor costs and other factors still have a greater impact on China's textile and garment industry. Tiankai said in recent years, China's textile industry, the cost of production factors continued to improve, with an average annual per capita wage growth rate of more than 10%, much higher than wages developing neighbors, cotton prices in recent years has been higher than the international market more than 30% industry in international competition basic cost advantage no longer exist.

This is in the textile and apparel industry giant Esquel Group has a personal experience. Esquel Group Vice Chairman and CEO of car g Tao for Economic Observer newspaper said, now, domestic cotton price difference is more than 30%, the domestic cotton prices would lower our company's profits, slowing our competitiveness. In recent years, the greatest pressure Esquel face is the impact of cotton price fluctuations, which is the biggest policy uncertainties we face.

Esquel Group is a vertically integrated cotton Apparel Group, the business scope covers the cultivation of cotton, spinning, weaving, dyeing, clothing, accessories, packaging and retailing in China, Malaysia, Mauritius, Sri Lanka and Vietnam to have a production base. OEM (OEM) is their main business model, they annually RalphLauren, TommyHilfiger and Nike and other world-renowned fashion brand serves more than 100 million shirts.

With the changes in the international market in recent years, Esquel's business strategy is changing. Although they emphasize the high cost in China, but so far, Esquel sales ratio in the country has exceeded 12%, while a decade ago, this ratio is almost zero. At the same time they also share in the US market shrinking rapidly, the proportion of sales from the original 70% to 40%.

Car grams Tao said that the change of the structure is still very large. Before Esquel are doing OEM, do OEM production, but then, we do OBM (ie operating its own brand), which means that we have to do their own brand. Chinese domestic demand and consumption growth has been very strong, our domestic economy and domestic demand are very confident.

Transformation of the storm

But not all the textile and garment enterprises have such confidence, which needs to face more and more pressure and challenges. Tiankai said the Chinese government in the face of environmental resource conflicts prominent in low-carbon, environmental regulatory standards and mission requirements become more stringent. While the textile industry declined significantly increase in the unit value of energy intensity and carbon dioxide emissions per unit added value of water, etc., but the absolute level of developed countries, energy and resource consumption is still a gap compared. Progress in industry emissions of major pollutants relatively slow, with the government on emissions requirements are still some gaps, completed 10% reduction by 2015 compared with 2010 total binding task a lot of pressure.

In Tiankai view, labor costs, raw material costs, environmental pressures are placed in front of China's textile and garment enterprises in the main pressure. He said that to speed up industrial restructuring and upgrading, total factor productivity and enhance capacity for sustainable development, effectively break the bottleneck resource and environmental constraints, to better compete in international markets and the global division of labor, is an urgent task facing the development of China's textile industry.

More and more textile companies choose to increase as a breakthrough technology upgrade these challenges password. Car grams Tao said, "In the future, we will upgrade the technological level as our main direction of development. Although Chinese labor costs are rising, but this is a good thing, not a bad thing. From the enterprise is concerned, we are not looking at labor costs, but look at the efficiency of the workers. in fact, in recent years, Esquel Group to expand overseas, has not only to select the cheap labor, but there are various considerations. we can not because of labor costs, and keep moving this, after all, not a fundamental way. "

In China, the car grams Tao and Esquel has also been done to prepare to meet the new norm. He said, in fact, China should continue to maintain 8% growth is definitely have the strength, but in the past the fact that every time the stimulus package will leave some consequences, and will bring a lot of imbalances. So, I think that the government did a good job, to maintain steady growth of around 7 percent. This is a very great change, because this one has a very important task of economic restructuring.

But structural adjustment for some textile and garment enterprises, is not a simple matter. Zhang Yansheng believes that the current restructuring of the Chinese textile and apparel industry, industry-wide problem. This process would be more painful, there will be quite a lot of companies out of the market. But for the industry, only some companies quit, will further enhance the competitiveness and ability to innovate in order to allow those businesses to survive, and sustainable development.

Zhang Yansheng seems in the past, China's textile and garment enterprises have developed very well, but mainly rely on low-cost low price. The next 30 years will usher in a golden 30 years, but most of the textile and garment enterprises will face a shortage of workers, lack of order, lack of technical problems.