President Sun Ruizhe's speech at the 16th Annual Meeting of China Textile Roundtable Forum

Strong resilience, steady growth,

Create a new situation of high-quality development of the textile industry

——Speech at the 16th Annual Meeting of the China Textile Roundtable Forum

Sun Ruizhe

President of China Textile Industry Federation

January 11, 2022

Distinguished leaders and distinguished guests: Hello, everyone!

Today, we gathered online to give advice on how to develop steadily in the new era of the industry. First of all, on behalf of the China Textile Industry Federation, I would like to express my gratitude to everyone for their concern and support for the industry.

Over the years, the China Textile Roundtable Forum has insisted on examining industrial development with the overall situation of the country, cracking major issues with open exchanges, and is an important platform for forming a consensus on the development of the industry. Only by forming a broad and in-depth consensus can we find the basis of empathy, the frequency of resonance, and build a win-win pattern and the power of common progress. I would like to take this opportunity to share with you three understandings, namely, the understanding of the current situation of the industry, the understanding of the current situation and the understanding of the future direction.

First, the industry awareness:

The textile industry is a constructive force that benefits people's livelihood and well-being in the new era and promotes stable economic and social development

In the past year, despite the impact of the new crown epidemic, fluctuations in raw material prices, high freight prices, and power curtailment and production rationing in some areas, the industry has still shown strong resilience and vitality in development, achieved a good start to the "14th Five-Year Plan", made outstanding contributions to stabilizing the economy, ensuring people's livelihood, promoting employment, and preventing risks, and played a more prominent role in the national economy.

1. Stabilize the economic market and give play to the role of pillar industries in national economic and social development.

From January to November 2021, the industrial added value of enterprises above the industry scale increased by 4.8% year-on-year, an increase of 7.9 percentage points over the same period of the previous year. The industrial added value of most links in the industrial chain achieved positive growth, and the filament weaving, home textiles and textile machinery industries increased by more than 10% year-on-year. The comprehensive strength of the industry continues to improve. The country's 34,000 textile enterprises above designated size achieved operating income of 4,626.2 billion yuan, an increase of 13.2% year-on-year. Enterprises above designated size achieved a total profit of 233.58 billion yuan, an increase of 30.8% year-on-year.

The degree of industry intensification has been continuously improved, and the industrial structure has been continuously optimized. In the first three quarters of 2021, the operating income of 171 listed companies in the industry increased by 30.5% year-on-year, and the total profit increased by 63.5% year-on-year, exceeding the profit scale of 2019 and 2020. In the first three quarters of the 171 listed companies, the average operating income of households reached 6.84 billion yuan, and the average household profit reached 750 million yuan, with a profit margin of 11%. In 2021, at least nine companies involved in the textile sector will enter the Fortune Global 500. Small and medium-sized enterprises have achieved steady development. In 2021, 124 textile-related enterprises have entered the list of the first three batches of "specialized and special new" small giant enterprises of the Ministry of Industry and Information Technology. In the selection of the sixth batch of individual champions of the Ministry of Industry and Information Technology, 51 enterprises in the textile industry have won single champion enterprises and 29 enterprises have won single champion products. The development of the industry has made positive contributions to stabilizing the macroeconomic market and implementing the tasks of "six stability" and "six guarantees".

2. Promote common prosperity and play a role in solving people's livelihood and beautifying the basic industries of life.

From meeting material needs to meeting spiritual needs, from improving the quality of life to improving the quality of life, from promoting consumption upgrading to promoting industrial upgrading, the full supply of textile products continues to meet the needs of people's livelihood and create a better life for the people. From January to November 2021, among the main major categories of products, chemical fiber, yarn, cloth, printing and dyeing clothing, the output increased by 10.3%, 10.1%, 8.5%, 15.1%, 8.5% respectively year-on-year, and the growth rate was 9.2, 20.2, 26.8, 22.3 and 17.3 percentage points faster than the same period of the previous year; the output of non-woven fabrics decreased by 1.5% year-on-year due to the impact of the base, but the average annual growth rate of the two years reached 6.2%. Under the background of increased inflation expectations, the smooth and smooth operation of the textile industry chain has played a positive role in stabilizing prices. Technological innovation and application innovation have made the trend of all things can be woven more obvious, and the revolutionary replacement of fiber materials is bringing unlimited imagination space to the industry.

The textile industry has the characteristics of multi-format integration and industrial depth and length, which has both a wide caliber and an easy to cut into, as well as the attributes of high precision and great potential. Textile industries are being developed in the most economically developed and least developed regions. The gradient transfer of the industry has effectively promoted the linkage and coordinated development of regional resources, and the cluster development of the industry has effectively promoted the rural revitalization and new urbanization construction. The vast majority of counties and towns with a GDP of more than 100 billion yuan regard the textile and garment industry as a pillar industry for economic development. The industry has driven more than 20 million direct employment population in the whole society, is an important space for small and micro private entities to innovate and start a business, and has played an irreplaceable role in providing employment and entrepreneurial opportunities.

3. Serve the new development pattern, and give play to the role of international cooperation and integrated development of advantageous industries.

The integration and superposition of science and technology, fashion and green have made the textile industry an important component of the modern economic system and played an important role in promoting consumption upgrading and industrial upgrading. Industry investment mainly focuses on the upgrading of technical equipment, the extension of industrial chains and the adjustment of regional layout. These investments have a comprehensive driving effect on stabilizing growth, adjusting the structure and benefiting people's livelihood. From January to November 2021, the average growth rate of investment in the chemical fiber and textile industries in the two years was 4.4% and 1.7%, respectively, and the scale has exceeded the pre-epidemic level. From the perspective of consumption, textile products are relatively stable categories in the domestic market, and the industry has made positive contributions to driving the growth of domestic demand. From January to November 2021, the offline retail sales of clothing, shoes, hats and knitted textiles above designated size nationwide were 1,236.3 billion yuan, an increase of 14.9% year-on-year; the retail sales of online wearing goods increased by 11.1% year-on-year. Traditional brands such as ANTA and Bosideng, and cutting-edge brands such as Beaster and bosie have risen rapidly, and "flat substitution" has become an important consumer trend.

Under the epidemic, the scale advantages and system advantages of the industry have been fully reflected, making important contributions to the smooth flow of the global industrial chain supply chain. From January to November 2021, the total export volume of textiles and apparel increased by 7.6% year-on-year, and in the case of masks and protective clothing exports shrinking by nearly 50 billion US dollars, the industry's exports in 2021 are expected to hit a record high of more than 310 billion US dollars. Supported by factors such as the return of overseas orders, the export volume of clothing from January to November 2021 increased by 25.1% year-on-year, the best growth level since 2014; the annual clothing export volume is expected to reach the highest point since 2016. The foreign trade structure is more diversified, and the amount of textile raw materials and products exported to Vietnam and India from January to October 2021 increased by 23.3% and 72.2% respectively year-on-year.

4. Analysis and prospects

Although the results are gratifying, we must also see the trend of "high before and low after" throughout 2021. As some unsustainable growth factors subside, the steady development of the industry is under pressure. The evolutionary trend of the NEW CROWN epidemic and the international cooperation environment facing the mainland are highly uncertain, which poses challenges to achieving the economic work goal of "keeping the word first and seeking progress in stability". It is expected that 2022 will form a major test for the industry's development resilience and high-quality development capabilities.

First, the trend of differentiation is difficult to change in the short term. The degree of recovery of each link of the industrial chain is uneven, the price transmission mechanism is not smooth, and the middle and lower reaches are facing greater cost pressure. Affected by commodity prices, the total profit of the chemical fiber and cotton spinning industries at the front end of the industrial chain increased by 221.9% and 72.3% year-on-year; the year-on-year profit growth rate of the midstream industry was generally in the range of 20% to 45%; while the clothing industry had an average negative growth rate of 5.6% in two years, and the home textile industry grew by an average of 3% in two years. The differentiation of enterprise development has become more obvious, and the development pressure of small and micro enterprises has increased significantly. The China Textile Federation has conducted statistics on 58 key textile industry clusters, and 44,000 of the 48,000 enterprises in the cluster are enterprises below the scale, and the average annual operating income of households is less than 4 million yuan. From January to October 2021, the operating income of these enterprises decreased by 2.1% year-on-year, the total profit decreased by 26.1% year-on-year, and the profit margin was only 3.5%.

Second, the growth momentum of the international market is weakening. The contraction trend of external demand growth, on the one hand, comes from macroeconomic fundamentals, and inflationary pressures will prompt the monetary policy of developed countries to accelerate the tightening, which will form a negative constraint on market consumption capacity and consumer confidence. On the other hand, from the readjustment of the layout of international purchase orders, with the evolution of the epidemic, the supply chains in Southeast Asia and South Asia may gradually recover, and the situation of export orders returning to the mainland may change.

Third, the importance of the domestic demand market has increased. From January to November 2021, the growth rate of retail sales of clothing, shoes, hats, needles and textiles above designated size in the country ranked 10th among 15 categories of products, and the growth level of online retail sales of wearing goods was still low compared with before the epidemic. With the increase in the statistical base, the macro environment becoming more complex, the network channels through the epidemic brought about by the concentrated release of dividends, the growth of domestic demand will show a marginal slowdown trend, and it is more important to effectively tap the domestic demand market space at different levels, in depth in different fields. For example, in the context of policies to comprehensively promote rural revitalization and narrow the gap between urban and rural areas, we should actively grasp the opportunities for the release of demand in the rural market and the consumer market in low-tier cities; actively tap the application demand space for various textile products, especially industrial textiles, in the policy environment of moderately advanced infrastructure investment and promoting the virtuous circle of the real estate industry due to urban policies.

Fourth, new developments have emerged in the adjustment of regional layout. In 2021, Guangxi, Xinjiang, Guizhou, Jiangxi, Shanxi and other central and western provinces have performed more prominently in the growth of investment in the textile industry. This reflects that under the situation of changing resource conditions such as land, labor, energy, water intake and sewage, the adjustment of the domestic regional layout is steadily advancing. With the continuous progress in promoting the joint construction of the "Belt and Road", the infrastructure conditions such as the comprehensive transportation network between China and the countries along the route have been continuously optimized, the construction of free trade zones such as China-ASEAN and RCEP has effectively improved the investment environment, and the transnational industrial chain and supply chain system from western China to Southeast Asia, Central Asia and other regions have been gradually integrated, so that Guangxi and other western coastal provinces have obtained new opportunities to undertake the transfer of the textile industry. With the effective control of the new crown epidemic, the construction of an industrial chain and supply chain system that coordinates the eastern, central and western regions, at home and abroad, will become a broader development practice in the textile industry.

Second, the situation understanding:

The internal and external environment is undergoing complex changes, and the industry is in a period of strategic opportunities and transformation adaptation

1. The industry should adapt to the global changes in the past century.

The unstable, uncertain and unbalanced characteristics of the world economic recovery are prominent. Affected by the new crown pneumonia epidemic, especially the mutated strains, global production and logistics have been blocked; inflationary pressures have increased, and the withdrawal of ultra-loose policies in developed countries may produce strong negative spillovers. Market confidence, investment expectations, commercial credit under pressure; raw material prices, transportation costs, factor supply is facing fluctuations, all of which affect the smooth operation of the industry. Recently, the U.S. government passed H.R. 6256 Xinjiang-related bill, which attempts to impose the "forced labor" label on all agricultural products and industrial products produced in Xinjiang in the form of a "presumption of guilt", and prevents "Made in Xinjiang" from entering the US market through customs administrative measures and requiring importers to check their supply chains. Geopolitics and the great power game are having a deeper impact on the future development of the industry. Globally, changes in rules, factors, and paradigms are intertwined, and demand contraction, supply shocks, and expectations are under pressure. The century-old changes and the century epidemic continue to evolve, and the industry needs to adapt to an increasingly complex and severe international environment.

2. The industry should be integrated into the overall situation of national rejuvenation.

Under the leadership of the party and after a hundred years of struggle, the great rejuvenation of the Chinese nation has entered an irreversible historical process. This is the tide and surge of the rise of the industry, the time and trend of the development of the industry.

In the new era, the construction of a new development pattern with the domestic large cycle as the main body and the domestic and international dual cycles promoting each other is where the space and quantity of the industry lie. Efficient and smooth resource elements, high degree of synergy between internal and external markets, and the transformation of cultural self-confidence into industrial self-confidence are the great potential for the development of the industry.

In the new era, building a higher quality, more efficient, fairer, more sustainable and more secure economic system is the direction and support of the industry. Innovation-driven elements, systems and ecological upgrades, and innovation to support quality, efficiency and power change, are the strong driving forces for the development of the industry.

In the new era, building a social development form in which the beauty of production, life and ecology are integrated and symbiotic, and the value is shared, and the common prosperity is steadily promoted, which is where the value and future of the industry lie. Richer people, escalating consumption, and the narrowing gap between urban and rural areas and regions are the grand potential of industry development.

3. The industry should grasp the current situation of innovation and development.

Driven by a new round of technological revolution and industrial revolution, characterized by digital and green, new development paradigms and new production functions are taking shape.

The economic structure has accelerated the "change of track", and the digital economy has entered a stable period. The development of the digital economy is driving the renewal of production equipment, infrastructure replacement, business process reengineering and organizational structure change. More market players and business scenarios are connected, a wider range of markets and resources have been integrated, the consumer Internet has entered a mature period, the focus of development has begun to migrate to the industrial Internet, and the industrial value has begun to come more from the scene deep ploughing and complex applications. The governance of the digital economy is becoming more and more standardized, and the realization of industrial value has entered the sun and transparency.

The rules of value began to "restructure", and the green economy entered a period of formation. As green development has become a global consensus and development trend, the introduction and formulation of green rules have become more active, and have begun to affect the cost structure and competitive advantage of the industry. The rules continue to improve in the mutual game. From the perspective of technology, green technology as a whole is in the exploration period, and a variety of completely different technical routes coexist in the same scenario, and stability and cost performance have yet to be tested. From the perspective of the market, consumers' awareness of environmental protection has begun to awaken, and green consumption has emerged, but the development is still slow. In the face of adjustment, the industry should conform to the general trend, but also pay attention to the rhythm and change, and fully consider the adaptability of the industry.

Third, the direction of understanding:

Strong resilience, steady growth, and promote the high-quality development of science and technology, fashion and green

The just-concluded Central Economic Work Conference is an important deployment guided by historical experience on the basis of the Sixth Plenary Session of the Nineteenth Central Committee systematically summing up the major achievements and historical experience of the party's century-old struggle; it is an overall overall plan for the victory of the party's 20th National Congress from the perspective of the overall strategic situation, to create a stable and healthy economic environment, a social environment for guotai and people's security, and a clean and healthy political environment. The meeting made it clear that in 2022, it is necessary to be steady, seek progress in stability, continue to do a good job in the "six stability" and "six guarantees" work, and focus on stabilizing the macroeconomic market. This points out the direction for the development of the industry, clarifies the responsibilities, and provides compliance.

Moving toward a new stage, embarking on a new journey, and stabilizing the macro economy are not only economic issues, but also political issues. The whole industry should follow the task direction proposed in the "14th Five-Year Development Outline of the Textile Industry", fully demonstrate the development resilience accumulated by years of in-depth adjustment and transformation, release the potential of high-quality development, strive to resolve various risks and contradictions, achieve the stable operation of the industry economy in a reasonable range, and show greater achievements in integrating into the "double cycle" new development pattern and promoting modernization. At the forefront, the industry needs to systematically promote the high-quality development of science and technology, fashion and green, create real value, long-term value, potential value, common value, and serve economic and social development.

1. Focus on real value, consolidate the basic disk, and strengthen innovation.

Manufacturing is the cornerstone of industrial stability and innovative development. It is necessary to continuously strengthen the advantages of industrial scale and supporting advantages, and promote the upgrading of the industrial base and the modernization of the industrial chain. Do fine, do specialized, do solid manufacturing, improve the whole industry chain manufacturing system from fiber material production, textile dyeing and processing, to terminal product manufacturing. Promote the circulation of commodities and factors with industrial circulation, and promote the smooth flow of factor resources. Strong chain, supplementary chain, extended chain to ensure the stability and robustness of the industrial chain. Improve the industrial ecology of large, medium, and small integration, upstream and downstream coordination, stabilize market players, and continuously enhance the innovation ability, development vitality and operating efficiency of enterprises. Promote the intensive development of the industry, accelerate the cultivation of "chain master" enterprises, "specialized and new".

Basic innovation and hard-core innovation determine the right to industrial survival, development and discourse. A breakthrough in technology "from 0 to 1" will create a new market and revitalize a large industry. It is necessary to enhance the strategic support ability and independent controllability of scientific and technological innovation in the industry. Focus on four areas of technology research and development and innovation, such as new fiber materials and equipment, textile green manufacturing technology and equipment, advanced textile products and equipment, and intelligent manufacturing key equipment. Improve the industry innovation infrastructure, and promote the construction and development of innovation platforms such as key laboratories and technology innovation centers. Improve and optimize the ecology of scientific and technological innovation, strengthen the protection of intellectual property rights, accelerate technological innovation, application and transformation, and take the "first kilometer" and "last kilometer" of innovation.

2. Focus on long-term value, focus on sustainability, and improve safety.

Achieving carbon peak carbon neutrality is a strategic choice to win future development. Carbon reduction is the trend of the times, but it is not a step in step, it is a system engineering, and it cannot be one-size-fits-all. The industry should persist in seeking truth from facts and steadily advance in accordance with scientific laws, industrial laws, and market laws. It is necessary to promote the construction of green factories, green products and green supply chains, and deepen green life cycle management. In the replacement of new and old energy and the replacement of new and old production capacity, it is necessary to adhere to the principle of first standing and then breaking, and there are in and out. On the basis of the "Framework plan for action to promote carbon peaking and carbon neutrality in the textile industry", it is necessary to promote advantageous enterprises to try first, set up a model, and explore the development path of carbon reduction for industry enterprises with the "30/60 Carbon Neutrality Acceleration Plan" as the guide. It is necessary to accelerate the research of green and low-carbon technologies, make good use of green financial tools, and improve the green standards and certification system.

Only by running safe development through all fields and the whole process of the industry can we firmly grasp the initiative of development. It is necessary to treat the guarantee of raw materials and other primary products as a strategic issue in the industry, enhance domestic support capabilities, and optimize the allocation and layout of global resources. At the same time, adhere to the priority of conservation, the implementation of a comprehensive conservation strategy. In the field of production, we will promote the comprehensive conservation, intensification and recycling of resources; in the field of consumption, advocate a simple and moderate, green and low-carbon lifestyle. It is necessary to correctly handle the relationship between domestic development and international transfer, maintain the appropriate industrial scale, and meet the basic needs of residents. It is necessary to strengthen the analysis and judgment of the international situation, consider the "Xinjiang issue" in the overall situation of industrial security, and improve the ability to identify and warn of environmental risks.

3. Focus on potential value, maintain forward-looking, and smooth the double cycle.

With digital, culture and capital as the value fulcrum to leverage the future of the industry. Deepen the integration of the two modernizations, promote the construction of industry information infrastructure, cultivate an ecological aggregation platform, and guide enterprises to "go to the cloud, use numbers, and empower wisdom". Develop intelligent products, promote business model innovation, develop service-oriented manufacturing, and create a flexible supply chain. It is necessary to deeply excavate and apply China's excellent traditional culture and the world's advanced culture, and cultivate "masters, big names, and major events." Accelerate the development of independent brands, explore new methodologies to promote the renewal and reengineering of traditional brands, and help the derivation and rise of new brands. Deepen the integration of production and broaden the financing channels for enterprises. Guide social capital to invest in the early stage and long-term investment. Promote the docking of high-quality enterprises with the capital market, and alleviate the problem of difficult and expensive financing for enterprises.

It is necessary to further implement the strategy of expanding domestic demand. Accelerate the integration of online and offline multi-channels of industry enterprises, and the standardized development of new models and new formats. Deeply cultivate the sinking market such as counties and rural areas, integrate into the Olympic economy, ice and snow economy, and tap consumption potential. Accelerate the optimization and upgrading of the professional market, create fashion weeks, exhibitions, and consumption festivals, and enrich consumption scenarios and channels. It is necessary to seize development opportunities such as RCEP, integrate high-quality international resources, and shape new advantages in international competition and cooperation. Take the initiative to benchmark high standards of international economic and trade rules and deepen production capacity cooperation. Consolidate traditional advantages, open up emerging markets, and create a diversified export market pattern. Strengthen the professionalism and influence of international exhibitions, standardize the development of cross-border e-commerce, and cultivate new foreign trade growth points.

4. Focus on common values, enhance inclusiveness, and increase the sense of gain.

The development of the industry should serve the overall situation of common prosperity. On the one hand, we will continue to liberate and develop social productive forces and create a high-quality life with high-quality development. Improve supply capacity to meet the basic needs of people's lives; promote product innovation to better meet the needs of consumption upgrading. On the other hand, it is necessary to strengthen the priority orientation of employment in promoting the high-quality development of the industry and improve the employment driving force of industrial development. It is necessary to ensure the stable and healthy development of small and medium-sized enterprises in the industry, and transform the ecological diversity of the industry into greater tolerance for employment. It is necessary to further promote the construction of corporate social responsibility, protect labor rights and interests, improve the working environment, and enhance the treatment of employees. It is necessary to change the society's perception of the industry, enhance the attractiveness of the industry to talents, especially young people, and promote the formation of positive feedback between talent resources and industrial upgrading.

It is necessary to adhere to the "national chess game", integrate industrial development into major regional development strategies, and promote the formation of an industrial layout with distinctive characteristics, complementary advantages, regional linkage, and coordinated development. Enhance the balance and coordination of development, and form a virtuous circle of coordinated development of industry and region. Promote the construction of new urbanization and rural revitalization with the construction of modern, digital and low-carbon industrial clusters. Accelerate the cultivation of world-class textile industry clusters. Give full play to the leading advantages of the eastern coastal industries and the huge space for industrial development in the central and western regions, strengthen industrial cooperation, and promote common prosperity with industrial development.

Those who desire the same thing from top to bottom win, and those who take advantage of the situation are wise. The great rejuvenation of the Chinese nation is the general trend of historical development and is also the broad and profound consensus of the sons and daughters of the Chinese nation. To the vast, to the subtle, to the original intention, to the future. Let us work hard, do not slacken off, and greet the victory of the 20th National Congress of the Party with the stable and healthy development of the industry.

Article source: Textile and Clothing Weekly