Economic operation of China's textile industry in 2020
In 2020, faced with a severe and complex domestic and international environment, especially the severe impact of the COVID-19 epidemic, the textile industry made every effort to ensure the supply of important epidemic prevention materials, steadily promoted the resumption of work and production, and based on a strong industrial chain and supply chain system, effectively served the overall epidemic prevention and control and the needs of national economic and social development. At the same time, the textile industry persisted in deepening transformation and upgrading, striving to resolve the risks and impacts brought about by the epidemic. The decline in major operating indicators continued to narrow, the economic operation showed a steady recovery, and export trade achieved unexpected growth driven by epidemic prevention materials. 2021 is the opening year of China's 14th Five-Year Plan, and the textile industry will still face complex development situations. The foundation for continued and improved recovery needs to be consolidated, and there are still many challenges in opening a new stage of high-quality development in the post-epidemic era.
Industry prosperity continues to expand, production growth steadily rises
Since 2020, the prosperity of the textile industry has generally remained in expansion, and the capacity utilization rate has increased quarter by quarter. According to the survey data of the China National Textile and Apparel Council, in the first quarter of 2020, the textile industry's prosperity index fell below the 50 critical point due to the epidemic. From the second quarter onwards, the prosperity index rebounded to above 50, reaching 61.3 in the fourth quarter, which is a relatively good level in recent years, indicating that business confidence is steadily improving. According to the National Bureau of Statistics, the capacity utilization rates of the textile and chemical fiber industries in 2020 were 73.1% and 80.5% respectively, up 0.7 and 1.4 percentage points respectively from the previous three quarters, but down 5.3 and 2.7 percentage points respectively from 2019.
The production situation is steadily recovering. According to data from the National Bureau of Statistics, in 2020, the added value of industrial enterprises above designated size in the textile industry decreased by 2.6% year-on-year, 5 percentage points lower than in 2019, and narrowed by 2 and 23 percentage points respectively compared to the first three quarters and January-February of 2020. Among the major links in the industrial chain, the industrial textile industry achieved good growth in production driven by epidemic prevention materials, with an increase in industrial added value of 54.1% year-on-year in 2020; the chemical fiber industry and household textile industry achieved year-on-year growth of 2.2% and 1.1% respectively in industrial added value, turning from negative to positive.
Domestic sales continue to improve, exports achieve unexpected growth
In the initial stages of the domestic epidemic outbreak, epidemic prevention measures such as the closure of physical businesses, home isolation, and reduced social activities led to a sharp decline in domestic consumption of textile and apparel products in the first quarter. Since the second quarter, with the orderly resumption of economic life and increasing activity in consumer activities, supported by various national policies to promote consumption, the domestic market sales of the textile industry have improved quarter by quarter. Data from the National Bureau of Statistics show that in 2020, the retail sales of clothing, shoes, hats, and knitted textiles in units above designated size nationwide decreased by 6.6% year-on-year, with the decline narrowing by 5.8 percentage points from the previous three quarters; the scale of online retail recovered more quickly, and by the end of July, the scale of online apparel retail nationwide had exceeded the level of the same period last year, with a year-on-year increase of 5.8% for the whole year, an increase of 2.5 percentage points from the previous three quarters.
Driven by the demand for epidemic prevention material procurement, the export scale of the textile industry hit a new high since 2015. According to customs data, China's total textile and apparel exports in 2020 amounted to US$291.22 billion, a year-on-year increase of 9.6%, 11.1 percentage points higher than the previous year. Among them, textile exports amounted to US$153.84 billion, a significant year-on-year increase of 29.2%, and the proportion of total industry exports increased from 44.3% in the previous year to 58.2%; the export situation of clothing was quite severe in the first half of the year, but in the second half of the year, with the reopening of the overseas economy, the advantages of the completeness of China's textile industry system and the stability of its supply chain operations became apparent, and clothing exports gradually improved. By the end of the year, the year-on-year decline in export volume had narrowed to 6.4%, and the monthly export volume has achieved positive growth since August.
Corporate profits continue to recover, but operating pressures remain prominent
With the gradual recovery of domestic and international market demand, and the effectiveness of national large-scale tax cuts and fee reductions and other policies to help enterprises overcome difficulties, the economic benefits of textile enterprises, after a sharp decline at the beginning of the year, showed a steady recovery and improvement quarter by quarter. According to the National Bureau of Statistics, in 2020, textile enterprises above designated size nationwide achieved an operating income of 4519.06 billion yuan, a year-on-year decrease of 8.8%, with the decline narrowing by 3.3 and 20.7 percentage points respectively compared to the previous three quarters and January-February; total profits reached 206.47 billion yuan, a year-on-year decrease of 6.4%, with the decline narrowing by 5.7 and 46.9 percentage points respectively compared to the previous three quarters and January-February. The operating profit margin of textile enterprises above designated size was 4.6%, a significant improvement from 2.2% at the beginning of the year, and exceeding 2019 by 0.2 percentage points. Among them, the profitability of industrial and household textile industries was outstanding, with total profits growing by 203.2% and 14.7% respectively year-on-year, and operating profit margins of 11.4% and 5.6% respectively, ranking among the top in the various links of the industrial chain. With the recovery of profits, the operating quality of textile enterprises also improved compared to the beginning of the year, but the operating pressure is still large. In 2020, the loss rate of textile enterprises above designated size was 22.7%, and the losses of loss-making enterprises increased by 26.8% year-on-year, decreasing by 13.6 and 2.7 percentage points respectively from the end of February; the total asset turnover rate and finished product turnover rate were 1.1 times/year and 13.2 times/year respectively, slowing down by 11.6% and 10.9% year-on-year respectively; the three-expense ratio was 7%, 0.2 percentage points higher than the previous year.
Uncertain factors remain to be resolved, embarking on a new journey of high-quality development
In 2020, the textile industry effectively overcame the major impact of the COVID-19 epidemic, and its major economic indicators have shown a recovery and improvement, fully demonstrating the advantages of a complete industrial system and stable supply capacity, playing an important role in supporting national economic and social development and ensuring the coordinated operation of the international textile supply chain. In 2021, the textile industry will still face complex development situations. On the one hand, the global epidemic has not yet been completely alleviated, and risk factors such as continued sluggish external demand, rising risks in the trade environment, etc., still exist, and the adverse impact on the stability of the industrial chain and supply chain remains to be eliminated, and the textile industry still faces considerable development pressure in the international market. On the other hand, the textile industry is in a period of deep adjustment and transformation, and while coping with the complex external situation, it still needs to resolve difficulties such as increased comprehensive costs, arduous environmental protection tasks, and intensified market competition, facing many challenges in maintaining stable operation. However, China's macroeconomic growth has taken the lead in achieving positive growth in 2020, with the total economic output exceeding one trillion yuan for the first time, and employment and people's livelihood have been effectively protected during the epidemic, demonstrating the strong resilience of economic development. With the solid advancement of the "Six Stability" and "Six Guarantees" work, based on the construction of a new dual-circulation development pattern with domestic large-circulation as the mainstay, a strong and diverse domestic market will provide the textile industry with sufficient development space and abundant innovation driving force, becoming the core engine for the continued recovery of the textile industry. Overall, based on a solid industrial foundation for achieving the basic goals of a strong country, China's textile industry still has the conditions to steadily embark on a new journey of high-quality development during the 14th Five-Year Plan in 2021.
The textile industry will actively implement the decisions and deployments of the CPC Central Committee and the State Council, based on the new stage of development, build a new development pattern, continue to deepen supply-side structural reforms, accelerate the transformation and upgrading of the industry, take multiple measures to improve the adaptability of the supply system to the domestic market, enhance the independent and controllable ability of the industrial chain and supply chain, actively respond to and resolve various risks and challenges, strive to maintain a steady and positive trend in economic operation, ensure a stable start to the 14th Five-Year Plan, and make due contributions to better serving the new strategic requirements for national economic and social development during the 14th Five-Year Plan!
Leaders from Xiamen C&D Group visited Tongzhou for investigation and guidance
On March 3, Wang Yongqing, Vice President of Xiamen CNOOC Group, visited Tongzhou Group for investigation and guidance. Wei Gangmin, Chairman of our company; Huang Hongyu, President; Li Tao, Vice President; and Zhang Zhiyan, Director of the General Office, met with and participated in a symposium.
Tongzhou Cotton Market Brief, Week 1 of March 2025
1) This week's National People's Congress and the Chinese People's Political Consultative Conference (NPC & CPPCC) in China boosted market expectations for steady growth. In February, the Purchasing Managers' Index (PMI) for manufacturing stood at 50.2%, up 1.1 percentage points from the previous month, indicating a significant improvement in the manufacturing sector.
In 2024, China's dyeing industry saw rapid export growth to ASEAN and RCEP member countries, exceeding the overall export growth rate. However, this growth was accompanied by a decline in prices. From January to December, China's exports of eight major dyeing products to ASEAN totaled 7.908 billion meters, a year-on-year increase of 12.14%, 4.61 percentage points higher than the overall export growth rate, accounting for 23.58% of total exports. The average export price was US\$1.19 per meter, a year-on-year decrease of 2.75%, 0.64 percentage points lower than the overall decline. Exports to RCEP member countries totaled 8.431 billion meters, a year-on-year increase of 11.35%, 3.82 percentage points higher than the overall export growth rate. The average export price was US\$1.17 per meter, a year-on-year decrease of 2.79%, 0.60 percentage points lower than the overall decline.
On February 28, Mr. Huang Hongyu, President of our company, was invited to attend the 2025 Zhangjiagang Cotton Industry Development Conference and, as a guest speaker at the "Xiangshan Roundtable," shared his views on the cotton market and trading opportunities.
Henan Tongzhou Cotton Industry Co., Ltd.
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Henan Tongzhou Cotton Industry Co., Ltd.
Address: 10th Floor, Henan Nongxin Building, No. 19 Commercial Outer Ring Road, Zhengdong New District,Zhengzhou, China
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Email：tongzhou@tongzhoucotton.com
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