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Since the beginning of this year, in the face of the more complex and severe international environment and the multiple tests brought about by the frequent occurrence of domestic epidemics, China's textile industry has fully implemented the decision-making and deployment of the Party Central Committee and the State Council, adhered to the general tone of the work of steady words and seeking progress amidst stability, continued to deepen transformation and upgrading, and focused on promoting industrial restructuring, to maximize the adverse effects of the repeated spread of the epidemic, the volatile international situation and the high volatility of commodity prices, the first two months of economic operation to achieve a smooth start. But since March, the domestic epidemic spread frequently, the industrial chain supply chain encountered card point blocking point, domestic and foreign market expectations weakened and other stages of downward pressure significantly increased, the textile industry part of the operating indicators fluctuations, economic operation gradually under pressure. Looking forward to the whole year, the world political and economic situation complex evolution, external risks continue to increase, the impact of the domestic epidemic increased, the downward pressure on the economy has yet to be resolved, the development situation facing the textile industry will become more complex and severe. Actively respond to and resolve various risks and challenges, and strive to ensure that the economic operation is generally stable. On the basis of a relatively high base in the same period last year, achieving the development goals of stabilizing the macroeconomic market, continuously improving people's livelihood, and maintaining overall social stability is still facing greater challenges.

Industry boom falls into contraction range, production growth slows steadily

In the first quarter, the domestic multi-cluster epidemic and international geopolitical instability and other factors superimposed, so that the production and operation activities of textile enterprises were affected to a certain extent, the industry boom fell into the contraction range. According to the survey data of the China Textile Industry Federation, in the first quarter of 2022, the prosperity index of the textile industry was only 42.6, down 14.5 and 19.7 percentage points respectively from the same period last year and the fourth quarter of 2021.

By some areas of enterprises due to the outbreak of work stoppage and production reduction and market demand weakening, the textile industry capacity utilization rate fell simultaneously, production growth slowed down steadily. According to data from the National Bureau of Statistics, the capacity utilization rates of the textile and chemical fiber industries in the first quarter were 78.2 and 84.2, respectively, lower than 0.1 and 2.9 percentage points in the same period last year. In the first quarter, the industrial added value of enterprises above designated size in the textile industry increased by 4.9 year-on-year, and the growth rate slowed by 15.4 percentage points from the same period last year. Production in more than 90% of the industrial chain achieved positive growth, and the added value of the textile, chemical fiber and garment industries increased by 3.2, 2.4 and 8.7 respectively over the same period last year.

The domestic market fluctuated slightly, and the export scale reached a new high in the same period.

In the first quarter, affected by the domestic epidemic, many places to strengthen the closure and control measures, residents' travel and consumption activities were suppressed, some textile and clothing trading markets were temporarily closed, the domestic market for the first time since 2021 decline. According to data from the National Bureau of Statistics, in the first quarter, the retail sales of clothing, shoes, hats, and knitwear products of units above the national quota decreased by 0.9 year-on-year, and the growth rate dropped by 55.1 percentage points from the same period last year. Online consumption of textiles and clothing maintained a slight growth. In the first quarter, the retail sales of online clothing goods nationwide increased by 0.9 year-on-year, and the growth rate dropped by 38.7 percentage points from the same period last year.

Under the support of the continuous recovery of overseas market demand, the national "stable foreign trade" policy and the rise of international commodity prices, China's textile and clothing exports have achieved good growth. According to China Customs data, China's textile and clothing exports reached 72.25 billion billion US dollars in the first quarter, an increase of 11% over the same period last year, and the scale of export growth reached the highest level in the same period in history. With the gradual recovery of the textile supply chain in Southeast Asia and other countries, the demand for yarn and fabric-related supporting facilities has rebounded significantly. my country's textile exports reached a new high of US $36.57 billion billion in the same period, an increase of 15.1 percent year-on-year. The terminal demand in the international market is basically stable. In the first quarter, China's clothing exports reached 35.68 billion billion US dollars, an increase of 7.4 percent over the same period last year. The entry into force of the Regional Comprehensive Economic Partnership Agreement (RCEP) provides a new platform for China's textile industry chain to demonstrate its competitiveness. In the first quarter, China's textile and clothing exports to the other 14 RCEP member countries totaled US $21.4 billion billion, an increase of 12.3 percent over the same period last year, accounting for 29.6 percent of China's total global textile and clothing exports in the same period.

Enterprise efficiency repair under pressure, investment to achieve good growth.

In the first quarter, the textile industry faced the complex situation of multi-point distribution of domestic epidemics, the intensification of the conflict between Russia and Ukraine and the continued rise of inflationary pressure and other unexpected factors and the weakening of market demand, high raw material costs, poor logistics operation and other normal pressure intertwined, enterprise production and operation pressure has increased, benefit repair is obviously under pressure. According to data from the National Bureau of Statistics, in the first quarter, the operating income of 36000 textile enterprises above designated size across the country increased by 10.6 year-on-year, and the growth rate slowed by 16.3 percentage points from the same period last year; total profits fell by 9.2 year-on-year. In the same period, the operating income profit margin of textile enterprises above designated size was only 3.4, down 0.7 percentage points from the same period last year. The benefits of more than 60% of the industrial chain have achieved positive growth, but the total profit of the chemical fiber industry has decreased by 54.9 year-on-year under the market situation of "high cost, weak demand, and high inventory. Affected by the weakening market demand and the higher base of the previous year, the total profits of the home textile and industrial industries at the end of the industrial chain have not yet reversed the negative growth trend, but the clothing industry has been driven by factors such as the continuous release of upgraded consumer demand such as the "ice and snow economy". The benefit growth is more obvious, and the operating income and total profit in the first quarter increased by 9.3 and 10.9 respectively year-on-year.

Although facing a more severe market environment, with the support of policies such as the country's steady growth and the protection of market entities to increase assistance to enterprises, textile companies continue to deepen their transformation and upgrading, and actively expand technological transformation and upgrading, energy conservation and carbon reduction, and regional layout adjustments. With effective investment in the field, the industry's investment growth is good. According to the data of the National Bureau of statistics, in the first quarter, the fixed asset investment of China's textile industry, chemical fiber industry and garment industry achieved a rebound growth of 23.8, 37% and 37.3 respectively, up 5.6, 27.5 and 20.2 percentage points respectively compared with the same period of last year.

Difficulties and challenges have increased significantly, and development resilience has been steadily released.

In the first quarter, the textile industry actively responded to and resolved various risks and challenges. While making every effort to maintain steady growth and resist downward pressure, it also worked hard to take into account the medium and long-term development goals of the "14th Five-Year Plan" structural adjustment and transformation. Looking forward to the whole year, the development environment of China's textile industry has become more complex and severe, and the difficulties and challenges of maintaining stable operation have increased significantly. From the external environment, the global epidemic is still spreading, the conflict between Russia and Ukraine continues to escalate, the operation of international supply chains is blocked, monetary policy in developed economies is tightening at an accelerated pace, and economic recovery is facing multiple downward pressures from increasing supply and demand imbalances, rising inflationary pressures and financial market volatility. Constraints on global industrial production, international trade and market liquidity will become more prominent, creating persistent constraints on the recovery of market consumption capacity and the improvement of consumer confidence. With the gradual recovery of the overseas textile supply chain, the international procurement pattern will also accelerate the adjustment, China's textile industry will face the situation of intensified competition, export pressure increased significantly.

From the perspective of the domestic environment, the new round of epidemic and macroeconomic downside risk pressure overlap, in a period of time on enterprise efficiency, employment situation, residents' income and market expectations to improve have a certain impact. However, the fundamentals of my country's economic stability and long-term improvement have not changed. In the first quarter, GDP grew by 4.8 year-on-year, and the economic growth rate is still among the world's major economies. As the impact of the epidemic is gradually brought under control, the card points that exist at both ends of supply and demand are expected to gradually unblock, and the consumer market will gradually show a recovery trend. Ice and snow consumption, green consumption, platform consumption and other emerging hot spots and innovative formats are active, which will promote the steady growth of the domestic demand market of textiles and clothing. At the same time, the national macro-control policies are laid out in advance and made forward efforts, focusing on accelerating the construction of a unified national market, promoting the implementation of employment priority, stabilizing foreign trade and promoting consumption, increasing market supply and price stability, and strengthening the support of the real economy to strengthen policy coordination and linkage, which will also provide support for the textile industry to further stimulate and tap the potential of the domestic demand market and resolve the risk pressure of high comprehensive cost and high inventory operation. In addition, China's textile industry chain supply chain system is complete, efficient and stable, independent and controllable advantages are still outstanding, once the epidemic prevention and control ushered in an inflection point, the industry is fully capable of playing its own competitive advantage, in the domestic and foreign markets to take the initiative to promote the operation of the industry early stabilization.

The textile industry will continue to actively implement the decision-making and deployment of the Party Central Committee and the State Council. In accordance with the requirements of the Central Economic Work Conference, the textile industry will continue to adhere to the general tone of "stabilizing the word and seeking progress while maintaining stability", and steadily release the development resilience accumulated through years of in-depth adjustment and transformation. Continuously activate the potential for high-quality development, and continue to play the positive role of the industry in ensuring production and supply, stimulating domestic demand, efforts should be made to consolidate the stable and good foundation of economic development, keep the economic operation in a reasonable range, and greet the victory of the 20th National Congress of the Communist Party of China with practical actions! (Ministry of Industry of China Textile Industry Federation)

(Source: China Textile Economic Information Network)