According to relevant reports, the U.S. government is angry about the soaring unemployment rate and shortage of medical resources and is calling for the return of manufacturing to stabilize employment. At the height of the epidemic, more than 16 million people in the United States applied for government assistance in three weeks. The governor of New York State once picked up an N95 mask and said that this mask is not complicated, but it has to be imported from China. The epidemic has exposed problems in the U.S. manufacturing industry and stung the hearts of the Trump administration.
Can American manufacturing really return smoothly? As an important representative of the manufacturing industry, will China’s leading position in the world be shaken?
Can the U.S. manufacturing industry
be able to flow back smoothly?
In fact, the United States has been promoting the reshoring of manufacturing industries during the Obama era, but few companies returning to the United States have smiled. As a benchmark company for manufacturing reshoring to the United States, Foxconn, in 2017 The U.S. factory plan was launched in 2006. Three years later, the factory is empty. General Motors was even less optimistic and decisively closed four U.S. factories.
The U.S. economy has suffered a significant decline due to the impact of the epidemic. The latest data shows that in April, the US manufacturing purchasing managers index dropped to 36.1%; the European manufacturing PMI dropped to 33.6%; except for China, the PMI of most countries fell below 40%. In April, China’s manufacturing purchasing managers’ index was 50.8%, indicating that China’s economic recovery momentum is improving further. Various signs indicate that as one of the world’s most important consumer markets, China’s economy is most likely to be the first to rebound. It is obviously more reasonable for the manufacturing industry to stay in China than to move to European and American countries and regions where the epidemic is still severe and the economy is in sluggishness.
In the past few decades, the United States has been implementing deindustrialization policies and vigorously developing the information industry and finance. Many industries have been discontinued, and it is very difficult to restore the manufacturing industry. The main reasons are: first, the lack of entrepreneurs, senior managers and young workers. Second, the strength of the labor union system has strained relations between labor and management in the United States, a problem that is difficult to resolve in the short term.
Enterprises are very pragmatic when making decisions. Even if some companies are considering returning to the United States, or foreign-funded enterprises want to invest in the United States, the lack of supporting supply chain support is restricting large-scale investment in the United States by the manufacturing industry. an important factor.
In addition, after the impact of the epidemic, the global economy has suffered heavy losses. For most companies, cost reduction is the top priority. Major decisions such as relocation are difficult to make, and even in the past two years, Annual manufacturing investment projects will be greatly reduced.
How to reshape the textile industry?
This year, under the impact of the epidemic, what are the new trends in the textile industry?
Under the epidemic, investing in an industry will pay more attention to a country’s ability to control major events and economic recovery capabilities, and the same is true for the textile industry. The epidemic is spreading globally. Flights in Europe and the United States have been grounded, countries and cities have been closed, and economies have been shut down. Europe and the United States have become a mess.
From a global perspective, China is the country with the most effective prevention and control of the epidemic, but the number of infections in developed countries such as Europe and the United States has always been high. No less. China’s institutional advantages have once again been demonstrated during the epidemic, with a high rate of resumption of work and production, and government measures to promote consumption have achieved significant results. The epidemic has caused various countries to suspend work and production, but China has taken the lead in the world to successfully resume work and production on a large scale. As of April 25, the resumption rate of large and medium-sized manufacturing enterprises was 99.7%. In terms of promoting consumption, the Chinese government has achieved remarkable results. During the May Day holiday, China’s consumption situation exceeded expectations, and there was a wave of compensatory consumption growth. From May 1st to 5th, the average daily sales of key retail enterprises increased by 32.1% compared with the Qingming Festival, showing an accelerated recovery trend. From May 1st to 5th, the total transaction amount of UnionPay online exceeded 1.57 trillion yuan, and the average daily transaction amount was 313.1 billion yuan, which has reached 97% of the average daily transaction amount during last year’s May Day holiday.
The impact of the epidemic may prompt capital flows to China, which has stronger management capabilities.
What exactly is
The “killer weapon” of China’s textile industry?
First of all, Chinese textiles have the advantage of high cost performance. The rise of China’s textile industry mainly relies on the low-cost model. However, with the decline of the demographic dividend advantage, high-quality management and technical talents, a complete supporting industrial chain, and preferential policies for investment in the central and western regions are becoming irreplaceable advantages.
Secondly, the textile industry is a cost-sensitive industry, especially the spinning industry. The global textile industry has also experienced a process of transfer from Europe and the United States to Asia, and within Asia. In recent years, with the increase in production costs, there has been a shift to Southeast Asia and Africa. Among Southeast Asian countries, Vietnam has performed well in epidemic prevention. In addition, Vietnam enjoys tariff advantages. In the global migration of the textile industry, we need to remain alert to Vietnam as an opponent.
Cao Dewang, chairman of Fuyao Group, said that if China wants to have long-term prosperous traditional industries, it must retain these manufacturing industries enterprises, otherwise the Chinese economy will not be able to achieve independence. In recent years, especially after the epidemic, the country has also begun toFollowing the introduction of supporting policies for small and medium-sized enterprises, such as deferring loan repayments, cutting interest rates, and returning social insurance, these policies can reduce the production and operation costs of enterprises and continue to enhance the competitiveness of the manufacturing industry.
Finally, it is more important to improve the investment and production environment of the textile industry and improve support for the textile industry. Especially under the epidemic, orders from small and medium-sized enterprises have decreased, production has been reduced and production has been suspended, and even bankruptcy has occurred. These huge small and medium-sized enterprises actually create most of China’s foreign exchange. China’s textile output accounts for more than half of the world. In 2019, my country’s cumulative exports of textiles and clothing were US$271.836 billion. At present, the most difficult situation during the epidemic is export-oriented enterprises, which should be given They provide some financial support to help companies tide over difficulties. Because once a business goes bankrupt, it is difficult to recover. We don’t want to see the mess on the ground after the epidemic. We also need more small and medium-sized enterprises to create more foreign exchange for the country!
At present, the main advantage of China’s textile industry in the international market is still mid-to-low-end products. The proportion of high-value-added products is not high. A large part of high-end fabrics still rely on imports. In terms of weaving, Key links such as dyeing, dyeing and finishing are still dominated by developed countries such as Italy, Germany and Japan. Among high-end and high value-added products, China Textile still has many areas that can be improved and explored. It is hoped that in this special period, companies can sink down, study hard, and build the core competitiveness of their products. The future market will be even broader.
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