Sewing Equipment Industry Entered "Cold Winter"

Affected by the downturn in the textile industry, the sewing equipment industry in China is experiencing the most severe "cold winter" since its development this year.

Data from the China Sewing Machinery Association showed that in the 1-5 month of this year, the profit of sewing enterprises decreased by 45.56%, and nearly 1/3 of the enterprises suffered losses.

Statistics show that in the first five months of this year, the total output value of the sewing machinery industry was 6 billion 100 million yuan, down 21.76% from the same period last year, an increase of 41 percentage points year-on-year, and 6 billion 700 million yuan in product sales, a decrease of 13.53% over the same period last year, an increase of 27 percentage points, a profit of 300 million yuan, a decrease of 46.56% percentage points, an increase of 55 percentage points.

In the first four months of this year, the export volume of China's sewing machines dropped by about 9% compared with the same period last year, while the export volume dropped by about 2% compared with the same period last year, and the negative growth occurred for the first time in seven years.

China is currently the world's largest producer of sewing equipment, accounting for more than 70% of the world's total output.

According to Nagata Mihiro, director of China Sewing Machinery Association, domestic sewing enterprises still focus on the production of low-end products.

Therefore, the collapse of domestic small and medium-sized garment enterprises directly led to the shrinking of market demand.

Customs data show that Guangdong, as a major clothing Province, exported $6 billion 650 million in clothing and accessories in 1-4 this year, down 15.1% from the same period last year.

In the first quarter of this year, less than 30% of Shandong's textile enterprises operated well, and more than 20% of the enterprises suffered losses, and even faced with a shutdown or conversion.

On the other hand, despite the strong demand for sewing equipment in the international market, the export profits of enterprises have been very low under the influence of the acceleration of RMB appreciation and the reduction of export tax rebates.

This year, the RMB appreciation has reached 6.13%, while last year, the export tax rebate rate dropped from 13% to 9%.

In addition, the rising cost of raw materials, the increase in labor costs and tight monetary policy have severely challenged the low cost advantages of enterprises.

He Ye, executive vice president of China Sewing Machinery Association, said that many factors have become "several knives" on the top of sewing enterprises, making the survival of enterprises extremely difficult.

The winter of sewing enterprises brings the phenomenon of "escape" of parts enterprises.

Tian min Yu told the "finance and economics" reporter that 10% of the backbone enterprises have provided "spare parts" for supporting equipment for sewing equipment. They switched to producing spare parts for automobiles, electric tools, agricultural machinery and other products.

As sewing equipment parts belong to precision parts, there is no threshold for enterprises.

"But if this phenomenon continues to deteriorate, the impact on the sewing industry will be enormous," Da Mihiro said.

In response to this, the China Sewing Machinery Association sought support from the Ministry of Commerce, electronics and technology industry in March this year, hoping that the state can continue to vigorously support export tax rebates and overseas market expansion, and recover the export rebate rate of sewing machines from 9% to 13%.

However, Tian min Yu admitted that the export tax rebate policy needs the coordination of ministries and commissions, and it is still very difficult to achieve change.

"Since 1999, sewing equipment industry has maintained a rapid growth of nearly 30% per year, but it has also brought a series of problems such as blind expansion, structural imbalance, and weak core competitiveness. At present, it is facing the biggest adjustment since the development of industry."

Tian min Yu told the "finance and economics" reporter, "the association is also actively guiding the technological upgrading of enterprises, promoting the reorganization and merger in the industry."