Recently, Sun Ruizhe, president of China National Textile and Apparel Council, gave a keynote speech entitled “Innovative Development and Prospects of China's Textile Industry under the Great Changes”, analyzed the situation of China’s textile industry affected by the pandemic this year, and directed the next development step for the industry.

At present, the textile industry stays at a historic juncture. The cumulative confirmed cases of new coronavirus in the world have reached nearly 10 million, more than one-thousandth of the total population of the world. Today the world is in the midst of the most dramatic transformation in a century. According to the prediction of the World Bank in June 2020, the global economy will decline by 5.2% year-on-year in 2020, falling into the worst recession since World War II. Under the pressure of development, some countries have moved against the globalization trend for short-term interests. Trade protectionism has been voiced around the globe, and geopolitical conflicts have deepened. Global development faces huge systemic risks. The profound enlightenment brought by these great changes is that the ultimate value of all political and economic activities must be for the happiness of human beings.

I

The situation facing China’s textile and apparel industry

Facing an unprecedented and complicated situation, China’s textile industry has to identify trends from the disturbances and seek a new path in the face of change.

(A) Adapt to the profound adjustment of the production pattern

With the rising of various emerging markets and developing countries, the industrial division of labor and the pattern of interests with the core of global cooperation have changed. Unilateralism and trade protectionism have emerged. The outbreak of the COVID-19 pandemic has amplified some of the drawbacks of globalization and further strengthened the protectionist atmosphere. Some countries have begun to seek a new balance between efficiency and safety. Building a diversified, safe and controllable supply chain is becoming an important direction of global industrial policy. For example, the recent formulation of the “Project Defend” plan by the United Kingdom was intended to reduce dependence on major importing countries such as China. Some countries such as the United States and Japan are also trying to guide the return of manufacturing. The supply chain layout is the result of the long-term evolution of market laws, and the position of China’s textile industry in the global value chain will not change in the short term. But reducing dependence on Chinese manufacturing has become an option. This means that China’s textile industry has ever lesser room for development in the low- and middle-end products of the global value chain. Accelerate industrial upgrading is the only way.

(B) Adapt to the profound adjustment of the market pattern

The spread of the pandemic has further exacerbated the shrinking consumption of the global textile and apparel industry. In April, the retail sales of apparel and accessories in the United States plunged by 89.3% year-on-year, while that of in Japan and the European Union fell by 53.6% and 62.8% respectively. Both traditional department stores and fashion brands are under tremendous pressure. The sales of PVH Group, INDITEX Group, GAP all fell more than 40% in the first quarter. Many brands and traders cancel orders, affecting the industry chain directly. According to the ITMF survey of 600 companies in the world, from May 20 to June 8, the average decline in corporate orders reached more than 40%. It is expected that the global corporate turnover will decline by 32% on average in 2020. Weak global demand is becoming a new normal. The importance of the domestic market is more prominent. In addition, the global trade pattern is focusing on regionalization. The proportion of intra-regional transactions around the globe continues to rise, becoming a new feature of globalization. Since 2018, CPTPP, EPA, USMCA, and other free trade agreements have come into effect one after another, and EVFTA and RCEP will also come into force this year. The adjustment of the market pattern will have an important impact on the development of the textile industry.

(C) Adapt to the profound adjustment of the factors pattern

Currently, the fourth industrial revolution is booming. Technological innovation is triggering major adjustments in social productivity and production relations. Technology has become a core variable in reshaping the industrial pattern. The industry’s development methods and industry boundaries are being profoundly adjusted. From the perspective of the supply side, the cross integration of technologies has led to the emergence of smart textiles and multi-functional textiles, enriching related application scenarios. All sectors in the industrial chain are accelerating the transition to digitalization, networking, and intelligence. Technologies like green fiber preparation, clean production, green printing and dyeing, and fiber recycling as well as industrial applications have seen rapid development. From the perspective of the demand side, driven by technology, new models, new formats, and new attempts such as scene economy, Internet celebrity economy, and sharing economy have developed rapidly. Especially during the pandemic, live streaming, community marketing, and online exhibitions have effectively filled the gap in the offline channels. China’s textile industry must accelerate its adjustment to the industrial pattern brought about by technological innovation and strive to gain a competitive advantage in a rapidly changing world.

II

Innovative development and the future of China’s textile and apparel industry

2020 is the decisive year for achieving moderate prosperity in all respect, and it is also a key year to build a textile power. Despite the current complex external situation, as a whole, China’s textile and apparel industry is still in a period of important strategic opportunities. China’s textile and apparel industry should focus on the industrial positioning of “technology, fashion, and sustainability”. Taking innovation as the fundamental driving force, promote the high-level development with new vision and new pattern.

(A) Focus on systematic innovation, create new industrial supply with basic capabilities as its core

China’s textile industry should strengthen the advantages of industrial manufacturing and promote capacity upgrading. Establish cultural self-confidence, vigorously develop the textile industry culture with Chinese characteristics. Continuously improve the efficiency of the supply chain, realize the orderly flow of human resources and materials. Work hard to foster an industry supply system with distinctive characteristics, complementary advantages, regional linkage, and coordinated development.

(B) Focus on market-oriented innovation, form a new industrial cycle based on domestic demand

Market demand is the source of industrial innovation and development. Under the new situation, the textile and apparel industry should develop an open economy based on the domestic market, and gradually form a new development pattern that takes the domestic market cycle as the main body and promotes the development of the domestic and international market at the same time. Advance the connection between domestic and foreign trade resources and markets. Reduce conversion costs. Strengthen the opening up of the industry, and realize a wider and higher-level flow of products, technology, production capacity, brands, and capital. In doing so, drive demand-oriented diversified technological innovation and product innovation based on differentiated and multi-layered domestic and international market demands.

(C) Focus on digital innovation, cultivate new industry momentum based on the digital economy

Digitalization, networking, and intelligence are the general trends of economic and technological changes. The digital economy has allowed the industry to achieve an “asymmetric” catch-up. On the one hand, it is necessary to strengthen the construction of information infrastructure, integrate and innovate infrastructure. Build industry-level and enterprise-level industrial Internet platforms and big data centers. On the other hand, the industry should promote the digital transformation of industrial organization and market connection. Vigorously develop new manufacturing models such as interconnected manufacturing and large-scale personalized customization to create a smart and flexible supply chain. Let e-commerce application further integrate into the textile and apparel industry, and cultivate live broadcast economy, platform economy, sharing economy, and community economy.

(D) Focus on sustainable innovation and create new industrial value with social responsibility as the focus

From a global perspective, corporate social responsibility is being fully integrated into the industry’s production system, value system, and innovation system. China’s textile industry will continue to enrich the tools and methods of social responsibility, and further promote the integration of social responsibility into the development strategies of the textile and apparel industry and enterprises. Deepen human-oriented responsibilities, and promote the implementation of poverty alleviation via industrial development. Strengthen clean production and green innovation, actively build a green supply chain in the textile industry. Deepen market responsibilities, improve the industry’s integrity system, and trust mechanism.