Xu Kunyuan: Establish and Improve the Balanced Development Mechanism of Textile Materials

In recent years, the price and supply of major textile raw materials such as cotton and chemical fiber have undergone major fluctuations, which has caused great difficulties for the production and operation of the textile industry. Therefore, the cotton system needs reforms, and it is necessary to step up reforms and accelerate the pace of reforms.

In view of the instability, uncertainty, and long-term nature of the textile raw material market, it is necessary to strengthen the research and analysis of textile raw materials. First of all, we must scientifically forecast and disseminate information in advance, strive for the scientificity, predictability, and coverage of information; secondly, we must establish an effective price mechanism and adjustment mechanism; and finally, form a mechanism for cost adjustment, transmission, and rapid reaction of the industrial chain.

Since the beginning of the 21st century, with the acceleration of the process of economic globalization, the gradual elimination of import and export quotas for textile products, and the gradual progress of the liberalization of textile trade, China’s textile industry has shown a sustained and rapid development in a good situation, forming an upstream fiber raw material. In the industrial system processed to the final product manufacturing, the fiber processing volume in China continues to grow rapidly. The proportion of fiber processing volume in the textile industry in the world has increased from 25% in 2000 to about 50% in 2010. However, in recent years, the price and supply of major textile raw materials such as cotton and chemical fiber have undergone major fluctuations, which has caused great difficulties for the production and operation of the textile industry.

Rich and diverse textile raw materials

Since the beginning of this year, China's textile industry has been plagued by a complicated economic environment at home and abroad. From January to May, the physical quantity of exports decreased by 2.2%, domestic sales also fell by 10% compared with the same period of last year, and the industry’s production dropped by 18%. The downturn in the textile market and the large fluctuations in the prices of raw materials have made the industry healthy, stable, and sustainable. It is facing new conflicts, and it also raises new issues on how to solve them. Textile raw materials are the main production factors of the textile industry. At present, there have been fundamental changes in textile raw materials compared with those before the reform and opening up, which are mainly reflected in the following aspects:

The first is from the shortage of production to oversupply. Before the 1990s, China's textile raw materials were mainly cotton, and now the proportion of chemical fiber reached more than 73%, and China's chemical fiber technology and capabilities have been rapidly improved, and shortage of raw materials has become a thing of the past.

The second is rich and colorful textile materials. The development of multiple varieties of chemical fiber and the natural fibers of silk, silk, and wool have greatly enriched the textile market, greatly improved and satisfied consumers' consumption levels, and played a very good role in promoting textile consumption.

Third, the complementarity, diversity, and mutual competitiveness of various fibers coexist at the same time, advancing the development of various fiber technologies and equipment, and the unbalanced and unstable state of various fibers.

Cotton System Reform Should Take the Market

Uncertainty and instability in the raw material market environment have caused serious impact on the industry. This is not only a current problem but also a long-term problem in the future. This year, although China's textile industry market is relatively sluggish, but from January to May this year, yarn production still increased by 14%, chemical fiber production increased by 15%, contrary to the market recession. The increase in output has also caused great difficulties for cotton and chemical fiber production and operation enterprises. According to the latest report issued by the International Cotton Advisory Committee ICAC on June 1, it is expected that there will be two consecutive years of cotton inventory. Annual growth is expected to reach 61% of total consumption in July 2013. In other words, there will be surplus cotton in the next two years. China's national reserve cotton has become a hot potato, and it has become an uncertain factor. China's cotton spinning industry has also fallen into a predicament, and some companies have already suffered large losses. Therefore, cotton needs reform, and we must step up reforms and accelerate reforms. pace. China's cotton reform must be promoted from three aspects.

The first is to exclude cotton from the sequence of strategic materials and no longer include strategic materials. Our original grain, cotton, and oils were used as strategic materials. Today, cotton is no longer the main raw material for the textile industry and textile consumer goods.

The second is to decentralize the management from the central government to the provincial, municipal, and autonomous region administrations and cease to engage in central unified management. The central plan, central inventory, central quotas should not be further restricted, and these managements should be decentralized to provinces, cities and autonomous regions.

Third, from the planning system to the real market allocation of resources on the track, cancel quotas, no longer engage in national cotton reserves, and no longer engage in national pricing. Specific provinces such as Xinjiang and other regions can adopt specific policies. It is necessary to get the cotton management system into the simplest and uncomplicated management system. I believe that as long as we change to the path of allocating resources on the market, our cotton system will be able to meet the common interests of the entire industry chain, thus realizing the economic development and win-win of the industry and all sectors.

Establish an effective mechanism to coordinate the development of raw materials

The textile industry itself is a very fiercely competitive industry with a very dynamic industry. However, our raw materials have not come up to such a path. I am concerned about the instability, uncertainty, and long-term nature of the textile raw material market. It is felt that the research and analysis of textile raw materials should be strengthened from the following aspects to ensure the stability of the raw material market.

The first is to scientifically forecast and disseminate information in advance, strive for the scientificity, predictability, and coverage of information, followed by the formation of an effective price mechanism and adjustment mechanism, and finally a mechanism for the adjustment, transmission, and rapid reaction of industrial chain costs. In order to reduce market risks and improve the anti-risk capabilities of raw material processing companies, we must form a price comparison index for a variety of fibers to coordinate the reasonable development of our various fibers.

The issue of textile raw materials is a very important issue in our industry, and it is also a basic issue. In the future, we need to conduct in-depth studies and deepen solutions to these issues from a global perspective, as well as national policies, industrial systems, and management systems. Can better solve the problem of raw materials.

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