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Notice of the People's Government of Henan Province on Printing and Distributing the Henan Province Textile Industry Adjustmen

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Notice of the People's Government of Henan Province on Printing and Distributing the Henan Province Textile Industry Adjustmen Notice of the People’s Government of Henan Province on Printing and Distributing the Henan Province Textile Industry Adjustment Revitalization Plan Yu Zheng [2009] No.75 All people’s governments of provincially-administered cities and key counties in Henan Province and all departments under the People's Government of Henan Province: The Henan Province Textile Industry Adjustment Revitalization Plan (hereinafter referred to as “Plan”) is hereby printed and distributed to you. Please implement this Plan strictly. The textile industry has an important role of promoting consumption structure upgrading, increasing employment, and expanding product export, and is one of the strategic pillar industries in Henan Province (hereinafter referred to as this “Province”) for the construction of the modern industry system and the rise of Central Plains. Formulating and implementing this Plan is of significant meaning for this Province to carry out the Circular of the State Council on Printing and Distributing the Textile Industry Adjustment and Revitalization Plan (Guo Fa [2009] No.10), make good use of its comparative advantages, accelerate accepting transferred industries, and promote textile industry structure upgrading, to turn this Province into a strong textile province with national significance and a big textile industry base with international competitiveness. All provincially-administered cities shall take concrete measures to carry out this Plan and earnestly organize the implementation work according to the basic ideas, goals, tasks and policy measures set out in this Plan. Relevant departments under the provincial government shall, through enhanced communication, consultation and close cooperation with each other, formulate and improve various supporting policy measures as soon as possible, and take concrete actions to strengthen guidance and support with respect to the implementation of this Plan according to the specific division of work and working requirements of this Plan. People’s Government of Henan Province September 5, 2009 Henan Province Textile Industry Adjustment Revitalization Plan The textile industry is a traditional competitive industry and an important livelihood industry in Henan Province. Accelerating textile industry development is very important for purpose of creating prosperous urban and rural markets, increase farmer's income, boosting employment and expanding product export. This Plan is specifically formulated in order to accelerate textile industry structure upgrading in Henan Province and foster and enhance strategic pillar industries in light of the Circular of the State Council on Printing and Distributing the Textile Industry Adjustment and Revitalization Plan (Guo Fa [2009] No.10) and the facts of this Province. This Plan is the 2009-2012 industry adjustment and revitalization implementation plan to provide guidance regarding industry development before 2020. I. Industry Status Quo and Situation (I) Industry Status Quo In recent years, the textile industry of this Province has developed fast by making use of its advantages. In 2008, realized industrial added value of enterprises above designed size was RMB 33.5 billion and their sales revenues reached RMB 118.8 billion, showing a growth of 4 folds respectively as compared with those in 2000, and ranking to sixth in China from ninth in 2003; completed asset investment was RMB 26.68 billion, showing an average annual growth of 44.8%, which was 17.2 percent higher than the national level; the output of yarn and chemical fiber ranked 3rd and 5th in China respectively, and with knitting yarn output accounting for 1/3 of total national output, this Province was the biggest knitting yarn production base; the proportion of industrial added value of garments reached 16.1%, 9 percent higher than in 2000; the annual sales revenues of the garment industry in Zhengzhou characterized by trousers were over RMB 10 billion, and those of the knitting industry in Anyang characterized by knitted underwear were over RMB 5 billion; a batch of characteristic parks including Xinye, Weishi, Xinmi, Fugou and Yucheng began to take shape. The textile industry in Henan Province has also accumulated some structural contradictions in the course of fast development, mainly manifested in unbalanced industry chain development with the “big before small” characteristics; relatively backward new product development and branding and shortage of innovative talents; laggard industry supporting system development, which affects sustained development of the industry; and industrial clusters being in the burgeoning and initial stage and not concentrated. (II) Development Trends 1. Development Trends of the International Textile Industry. (1) The financial crisis and difficulty for a sustained growth trend of the textile industry. Affected by the international financial crisis, consumption demands in the United States and other developed countries have dropped, the textile and garment export trade is facing difficulty now, but its long-term growth trend will not change. Since the 1990s, the average annual growth rate of global textile fiber consumption has been over 3% and even reached 4.9% during the period 2000-2007, both of which are higher than the average global GDP growth rate. In the long-term perspective, with the global economy recovering over time and emerging industries becoming bigger and stronger, the global fiber consumption will still keep at around 4% average annual growth. (2) Competition of the Textile Industry Will Be Focused on Technical Progress and Innovation. With the textile and garment manufacturing capacities being transferred to developing countries at an accelerated speed and the transformation and upgrading of the traditional textile industry speeding up, the effect of labor cost on the global market share of textiles and garments will decrease gradually; the new style textile industry driven by information technology and characterized by new materials, new equipment, new technologies and new products will become the main development direction; the competitive edge of this industry will be much reflected on the high-tech transformation of traditional industry and the development and application of renewable raw materials, clean production and cyclic utilization technologies. (3) International competition of the textile industry is increasingly fierce. Developed countries have an obvious edge in such fields as high-tech and high value-added textiles, branding and marketing channels, they are holding the top status and the initiative in the global vertical hierarchy, and they also implement trade protection by means of technical barriers, antidumping and special protection to maintain their industrial interests. Meanwhile, developing countries including India, Pakistan, Vietnam and Bangladesh are becoming a considerable competition pressure on Chinese textile export by virtue of their cost advantage. (4) Chinese Textile Industry Still Maintains its International Competitiveness. Firstly, labor cost in China is still far lower than that in developed countries and gradient transfer of the textile industry at home will also effectively continue the cost advantage of Chinese textile industry; secondly, China has prominent advantages in terms of complete textile and garment industry chain and developed industrial supporting system, which cannot be substituted over overcome by developing countries such as India and Vietnam; thirdly, price advantage alone is not enough to change the choice of high-end demand of the value chain, and the Chinese textile industry has won stable market share and good reputation in the international market by virtue of its comprehensive merits regarding product variety, quality and quick response. 2. Development Trend of the Domestic Textile Industry. (1) Domestic Fiber Consumption Demand Grow Fast and Persistently. In 2000-2008, the per capita fiber consumption in China increased from 7.5kg to 15.5kg, which is much less than 30-40kg, the fiber consumption level in developed countries, indicating a great growth potential. Consumption demands for traditional garments and home textiles grow continuously and per capita clothing consumption will continue keeping a growth over 13%. Textiles for industrial purpose pose a broad market prospect and demands for products such as geo-synthetic materials, medical and healthcare textiles, auto textiles and agricultural textiles will growth fast and persistently. (2) Textile and Garment Consumptions Demands Increasingly Diversified and Layered. In a general view, consumer groups will be more and more demanding to products in terms of taste, comfort, functionality and environmental protection. Individualized and fashionable brand name products with cultural content will face growing demands in large and medium-sized cities, while affordable good- quality products with attractive designs will face growing demands in small- and medium-sized towns and the countryside. Diversification and gradation of demands provide a new market opportunity for enterprises with strong design and R&D capability and an edge with respect to brand and channel, and also create a growth space for enterprises with good product quality, strong cost control, and smooth specialized market channel. (3) Upgrading and Transformation Trend of the Textile Industry Is Obvious. The Chinese textile industry has already entered into a strategic transition stage where technical, management and brand innovations are a very important channel
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