Cotton is the basis for the survival and development of the textile industry. Nowadays, the widening domestic and foreign cotton price spreads have made many spinning companies feel unable to move.

The growth rate of the textile industry is declining. Sun Huaibin, spokesperson of the China Textile Industry Federation, said on the 31st at the conference on the economic operation of the textile industry on the 31st that China’s textile exports are facing downward pressure. This pressure is mainly due to the widening of cotton spreads at home and abroad. If the cotton price gap does not shrink, exports will continue to be severe.

Since the beginning of this year, affected by the complex economic environment, China's textile industry has experienced a slowdown in the growth rate of production, the efficiency of enterprises has declined, and the downward pressure on exports has gradually increased.

Data from the China Textile Industry Federation shows that from January to April, 36,700 textile enterprises above designated size achieved a total industrial output value of 1.677058 trillion yuan, a 17.43 percentage point drop from the same period last year. The growth rate of the industrial sales output decreased by 17.62 percentage points over the same period of last year.

The partial transfer of market share data from other countries shows that from January to April, China exported a total of US$71.03 billion worth of textiles and clothing, which was a year-on-year increase of 1.07%. Textile exports were close to zero growth. The number of textile and apparel exports decreased by 2.23% year-on-year.

"Pressure mainly comes from domestic and foreign cotton spreads." According to reports, as of May 25, 2012, the domestic price of 328 cotton was 18,853 yuan / ton, 5,460 yuan higher than the international market price / ton.

"The higher domestic cotton prices have increased the production costs of spinning companies and have lost their competitiveness in winning orders in the international market." Sun Huaibin said that China's share of the international market for textiles and garments has been transferred to other countries.

The industry must speed up the transformation and upgrading In order to ensure that the textile industry continues to operate smoothly, China Textile Association recommends that the State Reserve Bank adopt fiscal subsidies when it puts stockpiles in reserve, implements price-based reserve, and narrows domestic and foreign cotton spreads. Accelerate the reform of the cotton circulation system, improve the macro-control mechanism of cotton, and realize the marketization of cotton price inside and outside.

At the same time, it is hoped that the government will introduce a further support policy, improve the institutional mechanism of SMEs, ease the problems faced by SMEs in textile industry, and reduce the risk of capital chain in textile enterprises.

More importantly, the industry itself must also speed up the transformation and upgrading, to the high-end of the industrial chain, and enhance its core competitiveness. In this regard, China Textile Federation said that it will use advanced technology to transform the traditional textile industry, increase the design of new products and the proportion of R & D and production in the industry, and enhance the added value and competitiveness of the industry's products.