The capital is tight

Recently, many small and medium-sized textile enterprises have reported that due to tight funding, increased corporate inventories, reduced orders, and reduced supply volume, companies have to worry about survival, coupled with multiple factors such as high labor costs and *** appreciation, small businesses. The living conditions may be more difficult than in the 2008 financial crisis.

“Now it is very difficult to spin small enterprise funds, even worse than in 2008, although the phenomenon of closing down is still not universal.” A person in charge of a printing and dyeing company in Wuxi, Jiangsu, told reporters.

According to Huo Jianguo, dean of the Research Institute of the Ministry of Commerce, the investigation of SMEs by the All-China Federation of Industry and Commerce in Jiangsu and Zhejiang provinces in April showed that the situation of enterprises in Jiangsu and Zhejiang provinces is even more difficult than in 2008. One of the problems is the shortage of funds.

**For the sake of surviving only a textile company in Texas in Shandong, they had applied to the bank with several local small businesses in the form of “joint insurance”. However, with the tightening of monetary policy, this type of “unified insurance” is now available. The method does not work either. In order to ease the financial difficulties, some enterprises have to go to the people. However, the high interest rates and high risks of private citizens have undoubtedly increased the company's business risks. A person in charge of the Wuxi textile machinery company said when talking about the issue of **, the former ** was for development, and now the ** is mainly for survival. Now the person in charge of the company is planning to “introduce one or two directors to bring in some funds” to ease the financial pressure.

For a long time, small and medium-sized textile companies have always been troublesome from the bank's **. And whether it can be financed from the people? A person in charge of a Cixi enterprise in Zhejiang believes that civil society is relatively easy, but it is risky. He said: “The risk of small businesses** is positively related to the cost of private borrowing. Now the cost of private lending has gradually increased, even higher than in 2008, which shows that the risk coefficient of small enterprises** has also increased. At present, private borrowing costs have exceeded Most companies can afford to go beyond the bank’s maturity if they do not want to return the bank’s bankroll or borrow high-cost private funds. In addition, the cost of getting businesses from banks is not only Interest rates and various additional costs outside of ** have also made it difficult for companies to breathe. In Wenzhou, private lending has reached a monthly interest rate of 7 to 9 cents, and some ** annual interest rates are as high as 100%."

The tightening of monetary assets has also increased the risk of breakage of the capital chain of small and medium-sized textile enterprises. In areas where private enterprises are concentrated, the idea that SMEs are in arrears or simply not returning is increasing, which will bring operating risks to banks and lenders.

Funds fill the cost "holes"

The person in charge of a knitwear company in Qingdao said: “The cotton price has risen by nearly 50%, and the labor cost has gone up by 30%. In the face of rising cost pressures, it feels a bit uncomfortable. In addition, companies have to pay for higher cotton prices. The added cost of interest, together with these factors, causes companies to lose money every day. Therefore, no bank is willing to give us money."

The lack of demand from downstream companies has made it difficult for cotton spinning companies. Because stocks are difficult to digest at the moment, some cash-strapped cotton spinning mills have chosen to stop production. Others have chosen to promote sales to withdraw funds and “cut meat” through stocks. At present, many textile companies have entered a difficult "destocking period."

An owner of a company engaged in textile and garment processing trade in the Yangtze River Delta region said: “The cost of labor has gone up from 4.5 yuan per person per hour last year to the current 6 yuan. The money we have put in place is used for product development. No, basically all of this is paid up to the cost increase.” According to him, the increase in labor costs, rising raw material prices, and the rise in the value of the renminbi have increased the cost of enterprises by at least 30%, and the range of price increase that customers can accept is not more than 10%. No one is willing to do this kind of business that loses money. Many business owners simply shut down the factory. He also told reporters that in Wenzhou, Taizhou, Shaoxing and other places, a considerable number of textile processing trade enterprises have "closed the door", and some companies are still struggling to "support." According to reports, after the closure of production, most of the bosses rely on “eating old books.” “Some can rent out the factory buildings and rent them at a low price. Those who can transfer will sell it.”

Over the years, China's textile and garment industry has occupied low-cost advantages in foreign markets. Since the rapid appreciation of *** since last year, raw material prices have continued to rise, pushing up the production costs of enterprises and weakening the advantages of export competition. The foreign orders have started to shift to low-cost countries such as Southeast Asia. At present, the shortage of funds on the market is tantamount to aggravating the situation for textile companies in distress.