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On July 6, Sun Ruizhe, president of the China Textile Industry Federation, attended the 2020 meeting of the China Textile and Garment Industry listed companies and delivered a keynote speech.

Dear colleagues and guests:
Hello, everyone!
2020 is destined to be an extraordinary year. With the deepening of the century-old changes and the spread of the new crown epidemic, the development of the world economy is under unprecedented pressure. The World Bank's latest Outlook, released on June 8, shows that the global economy is forecast to contract by 5.2 percent this year due to the new coronary pneumonia epidemic, plunging into the worst recession since World War II, and the proportion of economies with declining per capita output at its highest level since 1870. We are experiencing the first collective economic contraction in emerging market countries and developing economies in at least 60 years. The latest June report from the United Nations Conference on Trade and Development UNCTAD also pointed out that the epidemic will reduce global foreign direct investment flows by nearly 40% in 2020 from 2019. The development of the industry is facing huge systemic risks, and many companies are under pressure to survive.
What brings us deep thinking is that several major factors are profoundly changing the trajectory of social and economic development in this century, namely: geopolitics, digital economy, terrorism, epidemic, social responsibility and climate change. We need to be prepared and active.
Under the new situation, the Central Committee of the Communist Party of China has made an important decision to do a solid job in the "six stability" work and implement the "six protection" tasks, and has issued various policies to ensure the smooth operation of the economy and help enterprises tide over the difficulties. One of the important directions is to strengthen financial support for the real economy. From January to May, my country's RMB loans for the real economy increased by more than 100000 billion yuan, an increase of more than 20000 billion yuan over the same period last year. As an important livelihood sector in China, the textile industry is dominated by the private economy and small, medium and micro enterprises, and it is of great practical significance to do a good job in the industry's industry-finance cooperation.
Here, on the textile industry to share four points of view:

The 1. industry is under pressure to recover, and deepening the cooperation between industry and finance is a realistic need to achieve sustainable development.

The global spread of the new crown epidemic has caused the textile industry to experience an unprecedented impact on both the supply and demand sides. With the country's effective prevention and control of the epidemic, the industry's production and business activities have basically resumed, and the domestic demand market has gradually recovered. However, the global epidemic situation is still serious, and the smooth operation of the industry faces many challenges.
Production growth has slowed. The capacity utilization rate of the textile industry was lower than normal, but the decline in production growth continued to narrow. According to data from the National Bureau of Statistics, from January to May, the industrial added value of enterprises above designated size in the textile industry decreased by 8.2 year-on-year, and the rate of decline narrowed by 3.1 percentage points from January to April. The growth rate in May turned negative to positive. Among them, the industrial, chemical fiber and filament weaving industries have become the main growth drivers. In May, the manufacturing industry of industrial textile products showed a high growth rate of 88.3, driven by the centralized production of epidemic prevention materials such as masks and protective clothing. Under the effect of the gradual recovery of domestic consumption, the chemical fiber filament weaving and printing and dyeing finishing industry showed a growth rate of 6.7, narrowing the cumulative decline to 2.9. Driven by the downstream market and the rise in crude oil prices, the chemical fiber industry showed a growth rate of 4.3, the cumulative decline narrowed to 2.9 per cent. The clothing and apparel industry and the home textile industry were affected by the shrinking terminal demand, and the industrial added value from January to May decreased by 12.8 and 10.6 respectively. The industrial added value of the textile machinery manufacturing industry decreased by 20.8 year-on-year. Among the major categories of products in the textile industry, except for non-woven fabrics, all decreased compared with the same period last year. From January to May, the output of chemical fiber, yarn, cloth and clothing of enterprises above designated size decreased by 3.2, 18.1, 27.6 and 17.9 respectively.
Market demand is insufficient, but the decline continues to narrow. Affected by the epidemic, domestic consumption of textile and clothing goods is still weak, online and offline sales fell sharply compared with the same period last year, but the decline has narrowed. According to data from the National Bureau of Statistics, from January to May, the retail sales of clothing, shoes, hats, and knitwear of units above the national quota fell by 23.5 year-on-year, and the rate of decline narrowed by 5.5 percentage points from January to April. In order to make up for the loss of the line, textile enterprises generally strengthen the construction of online channels, online retail decline continued to narrow. From January to May, the retail sales of online clothing goods nationwide fell by 6.8 year-on-year, and the rate of decline narrowed by 5.2 percentage points from January to April. Driven by the export of epidemic prevention materials, the decline in industry exports gradually narrowed. According to data from China Customs Express, from January to May, my country's textile and apparel exports were 96.16 billion billion U.S. dollars, a year-on-year decrease of 1.2 percent, and the rate of decline continued to narrow by 8.8 percentage points from the previous four months and 0.7 percentage points from the same period last year. Among them, textile exports increased by 21.3 per cent year-on-year, accounting for 60.3 per cent of exports, while clothing exports continued to decline, with exports falling by 22.8 per cent year-on-year.
The scale of investment has been greatly reduced. Under the influence of the epidemic, industry enterprises generally lack the confidence and ability to invest, and the scale of investment has shrunk significantly. According to the data of the National Bureau of Statistics, from January to May, the amount of fixed asset investment in the textile industry decreased by 30.5 compared with the same period last year. In terms of sub-sectors, investment in the textile industry, chemical fiber industry and clothing industry decreased by 26.2, 23.2 and 39.2 respectively. In terms of regions, among the five eastern coastal provinces, the total investment except Zhejiang Province has shrunk significantly. The investment in clothing and apparel industry in Jiangsu, Fujian, Shandong and Guangdong provinces has dropped by 68%, 44.9, 50.4 and 80% respectively compared with the same period last year. In the central region, Hubei was more seriously affected by the epidemic, with investment in the textile, clothing and chemical fiber industries decreasing by 75.2, 69.8 and 62.4 percent year-on-year, respectively; investment in the clothing industry in Anhui and Henan provinces decreasing by 47.9 and 31.4 percent year-on-year, respectively. In the western region, the investment in the three sub-industries in Xinjiang all experienced negative growth, and the investment in the chemical fiber industry in Sichuan Province fell by 70.5. Due to the small base, the investment growth rate in Shaanxi Province and Gansu Province was relatively high.
The efficiency situation has deteriorated significantly. In the case of a serious shortage of demand and a sharp decline in production and sales, the income of textile enterprises has shrunk sharply and profits have shrunk seriously. According to data from the National Bureau of Statistics, from January to May, 33000 textile enterprises above designated size across the country achieved operating income of 155210.6 billion billion yuan, a year-on-year decrease of 17.23 percent; from January to May, the total profit was 54.603 billion billion yuan, a year-on-year decrease of 24.54 percent; from January to April, the operating income of enterprises The profit margin was 3.2 percent, 0.5 percentage points lower than the same period last year. Among the 12 textile sub-sectors, except for the positive growth of profits in the silk and industrial industries, the benefits of the rest of the industries are under pressure. Among them, the chemical fiber, textile machinery, cotton textile industry benefit deterioration situation is more prominent. Specifically, the total profit of the chemical fiber industry fell 60% year-on-year; the total profit of the textile machinery industry fell 56% year-on-year; the total profit of the cotton textile industry fell 49.2 year-on-year. From January to May, the loss of textile enterprises above the national scale reached 32.00 percent, and the loss of loss-making enterprises increased by 52.08 percent over the same period last year. The burden of business costs is heavy.
On the whole, the global epidemic has not yet peaked, domestic consumption has not recovered as fast as expected, and the shortage of corporate orders remains severe. Problems such as inventory backlog, intensified competition, shrinking profits, and tight cash flow generally plague industry companies, and many small, medium and micro enterprises are facing a survival crisis. The phenomenon of overdue and default of enterprise loans has increased, which makes the capital risk of the whole industrial chain increase. The industry urgently needs to effectively alleviate the financial pressure of enterprises and reduce the impact of the epidemic on the production and operation of enterprises through the deep docking of production and integration.

2. the profound adjustment of the industrial environment, deepening the cooperation between industry and finance is an objective requirement to adapt to the changing situation.

At present, the world structure has undergone profound adjustments, the uncertainty and instability of global political and economic development have become increasingly prominent, and trade protectionism and unilateralism continue to rise. Geopolitical risks such as the Sino-Indian border conflict and the Sino-Japanese island conflict continue to heat up. Recently, the United States signed the so-called "Uyghur Human Rights Policy Act of 2020" into law, trying to stigmatize Xinjiang's anti-terrorism, anti-secession and de-radicalization measures, and use this as an excuse to interfere with the international procurement and industrial chain layout of brand companies. This has had a big impact on the industry. In the face of an unprecedentedly complex industrial environment, we must discern trends from the turmoil and create new ones in the midst of changes.

1, the production pattern of profound adjustment: global value chain cooperation under pressure.
In recent years, with the collective rise of emerging market countries and developing countries, the global industrial division of labor and the pattern of interests centered on global value chain cooperation have changed. Some countries have developed resistance, and unilateralism and trade protectionism continue to heat up. The ongoing evolution of Sino-US trade frictions is a direct manifestation, and the outbreak of this epidemic has further strengthened the protectionist atmosphere. The shortage of important materials such as masks and medical protective clothing has led more countries to think about how to achieve a new balance between efficiency and safety, and the localization and diversification of supply chains will become an important direction. In the early days of the spread of the epidemic, the United States, Japan and other countries have introduced policies to encourage enterprises to move back, and recently the British government is also developing a "security project" in order to reduce dependence on China and other major importing countries and diversify imports of key commodities.
The profound changes in the global value chain cooperation model have made the space for the industry to seek development in the original position of the global value chain smaller and smaller. The industry needs to use capital power to accelerate the improvement of industrial total factor productivity and product added value, and establish global comparative advantage with higher quality and efficiency. At the same time, the industry should vigorously develop an open economy, better realize the global allocation of factor resources, the global layout of the supply chain, and ensure the safety and stability of the industrial chain supply chain.

2, the market pattern of profound adjustment: global demand is not strong to become a long-term existence, the importance of domestic demand increased.
At present, the world economic growth continues to slow down, and it is still in the period of deep adjustment after the international financial crisis, and the market demand continues to decline. The global spread of the epidemic has made the situation even worse. Europe and the United States and other countries as China's textile and clothing important consumer market, in this outbreak suffered a huge impact. In April, retail sales of clothing and apparel in the United States fell 89.3 percent year-on-year, while retail sales of textiles and apparel in Japan and the European Union fell 53.6 percent and 62.8 percent year-on-year, respectively. Many brands and traders cancel orders, China's industrial chain front-end demand has been directly impacted. The shutdown in India, Vietnam, Bangladesh and other countries has also led to a significant reduction in China's textile exports. As the downward pressure on the world economy continues to increase and market growth lacks stable support, sluggish global demand will become a long-term existence. The shrinking demand in the international market will inevitably have a huge impact on the industry's foreign trade exports.
Under the new situation, the domestic demand market is becoming the resilience of industrial development. China has the world's most growing consumer market, with consumption contributing 57.8 per cent to economic growth in 2019. The huge domestic demand market provides support for the industry to better play economies of scale, scope and network effects. The diversity of demand and the asynchronous development of multi-level consumption is becoming an important feature of the domestic market. Relying on the world's largest middle-income group, consumption upgrading is the general trend. With the continuous deepening of urbanization, regional coordinated development, and targeted poverty alleviation, the potential of the sinking market is also being released, and the space for mass consumption is huge.
In the face of major adjustments in the internal and external markets, enterprises should accelerate the formation of a new pattern of dual-cycle development at home and abroad.

3. Profound adjustment of the factor pattern: technological innovation has become the core variable that determines industrial development.
At present, the fourth industrial revolution is booming, global scientific and technological innovation has entered a period of intensive activity, and disruptive technological innovations have emerged one after another, which has triggered major adjustments in productivity and production relations. Scientific and technological innovation has gradually become the core variable to reshape the industrial pattern, which has profoundly changed the development mode and industrial boundary of the global textile industry.
Over the past decade, digital experience, analytics and cloud technologies have empowered technologies and become the core foundation for many companies to effectively advance their strategies and new business models. Over the next decade, digital reality, cognitive technologies, and blockchain will be disruptive drivers of enterprise change.
Digital experience is an important driving factor for enterprise change in the era of consumer Internet. Enterprises are gradually abandoning the traditional customer-oriented marketing model and are committed to creating more people-oriented interactions-including interactions with employees and business partners. Data and analysis technology will have a profound impact on business development. Enterprises must use tools and platform dynamic data to support data flow, data ingestion, data classification, storage and access. Cloud technology has penetrated into enterprises in an all-round way, cloud technology enables any IT capability to be turned into a cloud-based service for enterprise use. Cloud technology is driving the reinvention of old enterprise management and business functions.
Digital reality technology, including AR/VR, mixed reality, etc., helps users break through the confinement of keyboard and screen. The purpose of digital reality is to break the traditional spatial boundary and let people interact with the underlying technology naturally, instinctively and even subconsciously. Cognitive technology is a broader artificial intelligence technology, which personalizes and scenes human-computer interaction, drives business processes through customized language or image information, and realizes unattended operation; blockchain has taken the lead in the development of financial services, and other areas have also begun to be implemented, including corporate credit traceability and communications.
From the supply point of view, the cross-integration of technology makes intelligent textiles, multi-functional textiles continue to emerge, product connotation is constantly enriched, application scenarios continue to expand. All links of the industrial chain are accelerating the transformation to the direction of digitalization, networking and intelligence, and the lean, flexible and service-oriented level of industrial supply is constantly improving; the rapid development and industrial application of green fiber preparation technology, clean production technology, green printing and dyeing technology and fiber recycling technology are also deepening.
From the perspective of demand, driven by technology, the industry's resource organization and connection with the market have undergone profound adjustments, and new models, new formats, and new attempts such as scene economy, net red economy, and sharing economy have developed rapidly. Especially during the outbreak, live delivery, community marketing, network exhibition and other model innovation, effectively make up for the offline channel suspension of the blank.
The industry must speed up the adjustment of the industrial structure brought about by technological innovation and strive to gain competitive advantages in a rapidly changing world.

3. the continuous optimization of industry-finance ecology, deepening industry-finance cooperation has a realistic basis and development potential.

With the continuous improvement of China's socialist market economic system, a standardized, transparent, open, dynamic and resilient capital market is being established. The ecology of coordinated development of industry and finance is accelerating.

More mature capital markets
The promotion of financial reform has greatly improved the development level of China's capital market. At present, the competitiveness of China's capital market has risen to the fifth place in the world. The degree of marketization and rule of law of the capital market has been significantly improved, and the basic systems of information disclosure, issuance and delisting have been continuously improved. With the implementation of major initiatives such as the innovation of the board system, the reform of the GEM and the pilot registration system, and the reform of the New Third Board, the pace of capital market improvement has accelerated significantly. The channel of capital transmission to the real economy is more smooth. The function of financial services to the real economy has been continuously strengthened. In 2019, RMB loans granted by financial institutions to the real economy increased by 16.88 trillion billion yuan. Under the epidemic, monetary policy tools that go directly to the real economy continue to enrich. At the same time, the development of science and technology finance also brings new convenience for industry financing. The integration of information technology will greatly improve the information asymmetry between industry and finance, thus greatly improving the scientificity and possibility of financing.

2, the industrial base is more perfect
From raw material supply, design and development, to textile dyeing processing, operation and retail, China's textile industry has the largest and most complete industrial system in the world. The value chain of the textile industry itself has a strong financial attribute, which is closely related to the commodity market, capital market and money market. The textile industry is also one of the few industrial sectors in China with independent innovation capabilities in the entire industry chain. New technologies and new models have emerged in large numbers in the industry. Many of the industry's practices are highly compatible with the reformed GEM. Cultural and creative attributes make the industry long-term precipitation of a large number of design, creativity, IP and other resources. As an underlying asset, the size and quality of the industry makes the space for industrial and financial cooperation huge.

3. Deeper reform and opening up
In recent years, reform and opening up has entered a new stage based on rules and system opening. In the face of the current changes, the opening up of the financial sector has not slowed down, but has accelerated further. Restrictions on foreign equity ratios in banking, securities, fund management, futures and other fields have been completely lifted, and restrictions on the qualifications of foreign shareholders have continued to be relaxed. The accelerated opening of the financial sector has not only brought diversified capital sources to the industry, but also brought us more innovative models and advanced concepts. As an important sector of international production capacity cooperation, the textile industry has been actively implementing the "Belt and Road" initiative and strengthening global value chain cooperation through greenfield investment and capital operation. The pace of going out and bringing in is accelerating. In the context of the current deepening of supply chain localization and diversification, it is becoming more and more important to accelerate the global industrial chain layout of the industry. The power of capital is urgently needed to achieve cross-border allocation of resources and international capacity cooperation.

At the critical stage of building a 4. power, industry-finance cooperation is an important way to promote high-quality development.

This year is the year of the "13th Five-Year Plan" and the key year for the construction of a textile power. We need to strengthen the power of policy, the power of science and technology, the power of capital, the power of morality, and the power of unity to support the sustainable development of the industry.
Under the great changes in the world over the past century, it is of great significance to deepen the cooperation between industry and finance, make full use of the important role of capital in the optimal allocation of factors, promote the industry to practice the industrial positioning of "science and technology, fashion and green", and achieve high-quality development.

1, to industry-finance cooperation to strengthen the safety of the industrial chain.
Under the outbreak, the security and stability of the industrial chain is the core concern. Enterprises should constantly expand financing channels, use a variety of financial tools, from passive prevention to active management of market risks, solve resource problems, and strive to connect "breakpoints" and dredge "blocking points". In particular, it is necessary to strengthen the financing capacity building of four types of enterprises, including small and medium-sized enterprises with weak ability to resist the impact of the epidemic, foreign trade enterprises whose products are deeply integrated into the international supply chain, enterprises in key epidemic areas and poor areas, and leading enterprises with driving effect on the supply chain but with great short-term financial pressure, so as to prevent large-scale enterprise bankruptcy, so that these enterprises can better survive and ensure the integrity and safety of the industrial chain.

2, to promote the digital transformation of the industry through industry-finance cooperation.
The digital economy is a major trend of economic and technological change. Digital transformation gives the industry the opportunity to re-structure comparative advantages and achieve "asymmetric" catch-up. On the one hand, the industry needs to speed up the construction of new digital infrastructure and cultivate new momentum for the development of the digital economy. But it is difficult to meet the financial needs of the industry's new infrastructure by relying solely on a single enterprise and its own accumulation. We need to explore the use of a new "national system" to effectively link the forces of all parties with financial instruments to support the construction of new infrastructure in the industry. On the other hand, industry enterprises need to use capital power to balance the risk and return of innovation, steadily promote the application and popularization of information and intelligent technology in production, research and development, operation and other links, and improve the lean, flexible and service-oriented level of industry supply. In the context of the formal landing of the GEM registration system reform, industry companies must seize the opportunity to accelerate their deep integration with new technologies, new industries, new formats, and new models.

3, Industry-finance cooperation to promote industry-based innovation
China's textile industry has the largest volume in the world, but there are still weak strategic and fundamental innovation capabilities, and there is an urgent need to improve basic innovation capabilities. Industry-based innovation has a long pre-research and development time, high investment costs, and there is a huge uncertainty, enterprises only rely on short-term financing is often difficult to sustain. It is necessary to establish and improve the long-term mechanism of enterprise financing as soon as possible, guide the long-term and stable investment of funds in the basic, strategic and leading fields of the industry, and help enterprises accelerate the realization of substantial breakthroughs in core technology. At the same time, the research and development of key common technologies and leading-edge technologies involves the coordination of multiple resources and the coordination of multiple lines. Enterprises should be good at using the power of financial capital to coordinate resources from all parties to promote the accelerated gathering of innovative resources such as technology and talents to the industry.

4, to industry-finance cooperation to cultivate the main body of the industry.
As China's textile industry has entered a critical period of building a powerful country, it has become increasingly urgent to enhance industrial concentration and competitiveness and form a group of companies with global influence. The empowerment of capital allows companies to expand and grow in a shorter period of time. Industry enterprises should strengthen their capital operation capabilities, through listing and financing, joint investment, cross-shareholding, mergers and reorganizations, etc., to achieve the agglomeration of resource elements at a faster speed, on a larger scale, and on a larger scale, and continuously improve the competitiveness of enterprises. At the same time, with the help of capital power enterprises can achieve cross-field, cross-industry rapid development. For example, investing in growth enterprises through enterprise venture capital (CVC) can promote the joint development of the main business and the invested industry, realize the "external monitoring" of channel and mode innovation, the "external research and development" of cutting-edge technology, and improve their own development ecology.

5, Industry-finance cooperation to guide the sustainable development of the industry
At present, corporate social responsibility has become an important business norm and an effective way for enterprises to manage their strategies and improve their competitiveness. We should make full use of the relatively perfect mechanism and system of the capital market to guide the standardized development of enterprises. In the front-end time, the crisis of confidence in China's concept stocks represented by the Ruiyu incident makes us see that at any time, honest and standardized operation is the foundation for enterprises to settle down. Industry-finance cooperation, especially listing financing, requires true, accurate, complete and timely information disclosure, which helps closed companies to improve financial and operational compliance and standardization, thereby boosting the long-term development of the industry. More and more investors are introducing ESG factors into investment decisions, which will bring new development opportunities for the green transformation of enterprises. For example, with the help of green financial tools, enterprises can better and faster realize the adjustment of production capacity structure, eliminate backward production capacity, and build a green supply chain.

"Those who fake horses will not benefit the feet, but will make thousands of miles. Those who fake boats and oars cannot be water, but rivers." To cultivate new opportunities in a crisis and open a new situation in a changing situation requires us to be "self-reliant" and to "be good at things". Let us explore together, accelerate the construction of a textile power with industry-finance cooperation, and make greater contributions to the decisive victory of building a well-off society in an all-round way!

(Photo/Hao Jie)