Textile industry facing great pressure or bankruptcy boom in the storm of environmental regulation
Environmental protection, safety supervision, forced transformation …… China's textile industry has been changing and restructuring itself under the great pressure of environmental regulation in the past 2017. In 2018, the industry is hopeful to rejuvenate under the country's environmental protection policy and the consumption shift in the international market. China will develop from a large textile country to become a textile power.
In 2017, the storm of environmental regulation swept over China's entire textile and chemical fiber industry. Many textile printing and fabric manufacturing enterprises have had to take turns to work or have been restricted on production.
After months of restrictions on environmental regulation, many enterprises have already closed down or are about to. Also, some enterprises are working on building new factories and enlarging production capacity. Due to the closing down of many unqualified factories, a number of orders have been transferred to factories equipped with good environmental protection facilities. "Thanks to the environmental regulation, our company is currently receiving lots of orders," said the leader of a factory in Quanzhou, Fujian province.
Insiders believe that the polarization of enterprises is becoming more serious and the sign of industrial restructuring is starting to show up. In 2018, the elimination of small and unqualified factories will be continued. A large number of small factories will drop out of market competition, and in the long term prices are bound to rise.
According to the official reply from the State Commission Office of Public Sectors Reform, the Environmental Protection Supervision Center in North China, East China, South China, Northwest China, Southwest China, and Northeast China affiliated to the Ministry of Environmental Protection have been renamed to Inspection Bureau, changing from a public institution to an administrative agency. The newly-added function of the Inspection Bureau is to strengthen environmental protection supervision, signifying that the central government’s environmental supervision on local enterprises will become normal.
A guideline rolled out by the Ministry of Environmental Protection mentioned that some enterprises didn't learn from being ordered to restrict production or stop production and had illegal behaviors again after the end of month-long punishment. To restraint those behaviors, the new guideline stipulates enterprises that dispose sewage without license, exceed the standard of sewage disposal, and ask them to stop production and rectify their behavior for at least three months.
China's Environmental Protection Tax Law took effect on Jan 1, 2018. The launch of environmental protection tax will urge enterprises to invest more in environmental protection. For example, a medium-sized enterprise with an annual output of 50 million yuan must pay the environmental protection tax of 300,000 to 700,000 yuan per year. The cost of production has increased immensely. Therefore, if an enterprise wants to survive, the first task for them is to make sure it can afford the cost of environmental protection tax.
It is foreseeable that new equipment and technologies that can avoid or reduce pollution such as colored raw material, vegetable dyes, waterless dyeing, and low-temperature dyeing will be widely applied. But the production costs of enterprises will also significantly increase. Thus, some people think that a bankruptcy boom will take place in the textile industry in the following two to three years.