DESIGN

Accession To Wto On China Domestic Market, The Impact Of Wool Textile Industry

    A woolen textile industry in the domestic market situation

    1.1 The supply exceeds demand, the product Yaku in serious condition

    Table 1 as “95″ output of major products during the wool industry, Table 2 for the 1997 inventory of some products.

    The sharp decline in product output, inventories are still on the rise, showing that the pace of reduction and wool textile industry is also not big enough.

    

    Structural surplus of 1.2 Market

    Structural surplus that the market supply and demand mismatch, the original varieties of surplus, in line with the world trend of production of new varieties lack.

    At present, China’s wool textile consumption level below the world average. According to 1986 statistics, was the world’s per-capita gross capacity of 0.4kg / a, while in 1993 China only 0.25kg / a. Can be seen, the domestic production of wool textiles compared with other countries is not a surplus, but enough.

The so-called oversupply, does not mean absolute overproduction, but rather a structural surplus, that is, on the one hand product inventory backlog, the other is to import large quantities of high-grade fabrics. For this excess is the direct cause delay in the adjustment of product structure, namely, the existing varieties of color has been lagging far behind the needs of consumers. In last year’s annual meeting of the National Wool Textile, all enterprises and samples sent to exhibitors, mostly in the dark, to Canglan, gray, black main color are mostly ordinary times, and a small amount of embedded dark stripes. Women in bright colors of fabric than the very few colors and no major breakthrough in the organization.

    

    Structural surplus for this fundamental reason is that interest. Wool Textile is a high-value-added products, it can bring profits of an enterprise is self-evident; the same time it belongs to labor-intensive products, easy to organize production, the cost is also low. So, not only to investors in the wool textile industry is quite popular, large and small township enterprises such as mushroom, provincial and municipal leaders a positive for the project examination and approval by the running. Low-level duplicated construction caused by excessive competition, and inability to grow new businesses, the original good efficiency of the enterprises into trouble.

    

    1.3 disordered market competition, corporate cannibalism

    Low-level building will inevitably lead to low levels of competition, price wars in the wool textile industry has played for 10 years, and even high-grade wool textiles such as cashmere sweater, worsted wool fabric were also not spared. Various enterprises in order to hold their own market, selling at a loss, the results heavily in debt. Prices of wool textile products in 1999 compared with same period in 1998 decreased by 20% – 50%, the state-owned enterprises than wool over the same period in 1998 increased 144% loss with a loss of 36% and the average asset-liability ratio of 89.21%, the textile industry in the One of the most serious trade deficit.

    

    1.4 urgent development of the rural market

    1998 General Secretary Jiang Zemin visited Sunan had pointed out that “Who’s the first to open the rural market, who will be able to obtain large-scale development of the vast world.” China’s rural per capita in 1996 to buy clothes is 113 yuan, if they can increase by 1 percentage point, reflected in the textile industry is the new economic growth point. Development of rural market should pay attention to the needs of its own characteristics, rather than simply as a rural market can lag in urban markets, rural markets are characterized by short, is a high quality, low cost, durable and practical. Domestic Wool Textile 4:00 to do this is not difficult, as compared with imported products, aggressive market, we have a greater advantage in rural areas.

    

    2 join the WTO on China’s wool textile industry of the domestic market

    2.1 The market share of domestic wool textile

    ① is currently a monopoly on domestic wool textile wool textile market, middle and low to join WTO, this will cease to exist.

    

    First, the accession to WTO, domestic wool textile will lose their price advantage, being less competitive than imported products, domestic wool textile market share would be substantially reduced.

    Generally speaking, the only advantage of our products is cheap, in the international market, so, in the domestic market as well. Join the WTO, while China’s import tariffs reduced; the other hand, some domestic enterprises to invest and build factories overseas, not only to circumvent trade barriers, and can use the local cheap labor. Therefore, the domestic wool textile no longer has the price advantage.

In other areas, and compared to imported products, domestic wool textile varieties of a single, quality, poor stability, long delivery times, to respond to market demand lags behind, so people will prefer imported products. Enhancing the competitiveness of domestic products based on the overall enhancement of technological level of the premise, not a short period of time can be achieved, to join WTO, lose a most of the market space is inevitable.

    

    Second, even without competition from imported products, state-owned share of wool textiles market will keep shrinking.

    The people’s standard of living is steadily improving, wool products as high-end textile products, carrying an increasing number of social function, quality of content has been progressively enriched and expanded. No defects, no skew is only the most basic requirement, high-quality products but also high value-added, personalized, artistic, and can quickly respond to consumer needs products.

The domestic wool textile even the most basic level of quality is difficult to guarantee, let alone meet the people’s pursuit of a high-level. In recent years a serious backlog of products, in large part because there is a growing emphasis on quality of life, called for the commencement of the dress with the world, and domestic product development and production keep up with this change, the original market continues to shrink .

    

    ② In the high-grade wool textile market, a strong opponent of course, is also the excellence come forth in large domestic enterprises.

    High-grade wool textiles in the domestic market, active in a group has a good reputation and a stable domestic and foreign customer base, state-owned enterprises export-oriented economic good. Most of these companies in internal strength after a longer period of time practicing, although there is still a distance with some multinational companies, but the huge growth potential.

   

    For example, Inner Mongolia King Deer Group. Technically, they are 80% of the equipment from abroad, has reached the international advanced level; from the product point of view, they focus on quality and excellence, exports to Japan more than 60 kinds of varieties exemption, up to more than 1,000 kinds of styles.

Therefore, in 1998, industry-wide downturn, King Deer Group, still has made remarkable achievements, profit and tax 41 million yuan, foreign exchange 40.5086 million U.S. dollars, more than 240 million yuan of industrial added value. In 1995, established the world’s largest cashmere company Dawson International Group, United Kingdom with 25% of the shares joined the King Deer Group, marks the cashmere processing industry center of gravity shift from Europe to China, but also marks the King Deer Cashmere represented by some Chinese enterprises ranks among the world’s most advanced.

    

    Currently there are a lot of Heng Yuan Xiang, Shikao such enterprises, such as the Inner Mongolia Erdos, Sunshine Group, Shanghai San Mao, Shanghai Second brother, Beijing, snow lotus and so on, these enterprises are the mainstay of China’s wool textile industry. In the high-grade wool textile market, of course, there will be a very powerful well-known international brands to enter, and they are compared to the above-mentioned enterprises may be the strength is not strong enough, but we have reason to believe that this market will not easily be foreign-invested enterprises account for.

    

    2.2 Product Structure

    2.2.1 clothing with wool textiles

    The influx of imported products will optimize the consumption structure and consumption structure optimized to drive the upgrading of product structure.

    Massive influx of imported products would not inspire people to realize their own potential needs. It is like the ordinary people from buying to buy a colorful mohair yarn line, from the wear thick wool coat of wool suiting to the pursuit of “light, thin, soft, supple and pretty” and select cashmere coat and so on. Of new products emerging, it is constantly being stimulated new demand out of business in order to survive, in order to develop had to meet the needs of people, large-scale production of new products at the same time eliminate obsolete varieties, the product advantages of upgrading in this process a reality.

The above-mentioned course, is only the product structure of the passive upgrades, this change more slowly, more importantly, the imports trend has brought the international movement of information. This is conducive to China’s wool textile enterprises grasp the pulse of the market, walking in front in the market to encourage domestic consumption, so that the product structure to upgrade from passive to active upgrade, thus speeding up the process of optimization of product mix.

   

    2.2.2 decorative wool textiles

    At present, some developed countries, with clothing, decorative and industrial textiles with the amount of each roughly 1 / 3, while the ratio of China’s three 75:12:13. For the wool textiles, industrial uses very little current need to develop the decorative woolen products, covering items such as furniture, carpets, tapestries, hanging curtain and so on. China’s annual and medium-sized public buildings, hotels and restaurants and other commercial outlets decoration project will cost as many as 800 million yuan, these decorative works, textiles and accessories account for 15% – 40%.

Also, buy a house now has become a new economic growth point, there is strength, most of the people buy a house will spare no effort to go to the decoration. Therefore, the decorative wool textiles in China has broad prospects. However, public places, commercial networks used by the decorative-type wool textile demand series, and the supporting technology, standardization, at present our products is difficult to do this, so many hotels and restaurants are still a large number of imports from abroad.

    

    Join the WTO, decorative wool textile market will suffer a severe blow, but it also lit my spark decorative textile production for an increasingly saturated wool textile market and open up a new world, but also a strong impetus to upgrade the product structure.

   

   WTO accession to 2.3 on the structure of domestic enterprises

    ① imported products, the impact of foreign-invested enterprises will make those who are already heavily in debt, crumbling state-owned enterprises closed down, which is conducive to the development of wool textile industry. Table 3 for the wool industry in the various sectors of the loss of statistics.

   

    ② competition will lead to some powerful enterprises together to form large enterprise groups.

    The composition of an enterprise group integrating science, industry and not only help enhance the capacity for new product development, improve product quality, and it helps businesses abreast of the latest market demand information, so that the development and production of market-oriented to produce marketable products.

    For example in 1996 China Textile University and Shanghai Heng Yuan Xiang Wool Company signed a scientific cooperation agreement, both sides in science and technology development, technology trade, personnel training, etc. to establish a long-term cooperative relations, this collaboration will benefit both the parties.

    Can be seen that the composition of an enterprise group integrating science, industry and not only greatly increased the strength of domestic enterprises, in order to create our own international brands to create the conditions for the domestic woolen textile industry to further develop the research work also has an important role.

    

    ③ join the WTO, and foreign joint ventures, cooperative enterprises in the wool textile industry has grown significantly, which not only allows us to utilize foreign investment, shortage of funds to solve business problems, and domestic enterprises can make the technological level and management level to a higher level. In particular with Australia, the cooperation of domestic wool big powers will enable the country to obtain a stable and reliable source of high-quality wool, but also help to improve the level of China’s wool processing order.

   

    Australia is China’s largest supplier of wool resources, Australian Wool and wool cent of our imports more than half of the total. Australian Wool importing countries, China also occupies a pivotal position. In 1995, China’s total imports of Australian wool and the Australian Wool and semi-finished products (in terms of net gross) for the 974,000 t, accounting for Australian wool exports that year, 21.3%. Can be seen that the cooperation between China and Australia will benefit both sides.

    

    The cooperation of the two sides had started early. As in July 1994, the Australian Government to the Chinese launch of a 400 million Australian dollars for aid projects in China, selected a number of factories for processing test, the introduction of advanced processing technology and quality management system, and China more than 1,000 units in the major wool Bit managers in Australia were trained in two places. The event raised China in the Australian Wool testing the efficiency and professionalism of wool processing order for our country into the international norms played an important role. Join the WTO, bilateral cooperation will further deepen the cooperation in co-operation will be expanded by an official co-operation between enterprises, which will effectively boost the revitalization of China’s wool textile industry.

    

    In short, the accession to WTO, China will temporarily lose some market share, many companies may be bankruptcies, but in return is the enterprise structure and product structure optimization and upgrading, which for us is more important. Because a stable market share is based on a reasonable product structure and enterprise structure based on.

Only quantitative changes in market share, is temporary, structural changes in wool textile industry is the decision of qualitative change in the direction of development, qualitative change is a new quantitative starting point. Thus, through the overall, WTO although it will bring a short period of China’s wool textile industry of severe pain, but long-term considerations, the development of wool textile industry is very useful.
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