How is the crisis in the silk industry “broken lake” broken?

There has always been a saying in the silk industry that “the industry migrates to less developed countries or regions”. In 2014, China’s exports of genuine silk products were unbelievably ranked behind the EU and India. If we turn our attention to Southeast Asia, Southeast Asian countries seem to be preparing to undertake the migration of the silk industry to the region.

silk

silk

In 2014, India's silk production was 12.78% of China's silk production, but India's silk exports have exceeded China's. In 2015, Vietnam’s export of silkworms to Japan exceeded that of China. In March 2016, Vietnam hosted the Asian Silk Culture Festival in Hoi An Silk Village. Thailand's Taisi Company is a project led by the Queen. It was originally a cultural heritage. In recent years, it has strengthened exchanges with the international silk industry, and there are many signs of exerting strength in the trade of silk. The governments of Cambodia, Myanmar, Laos and other countries have also begun planning and deploying to develop the silk industry to drive economic growth.

Is “the migration of silk industry to underdeveloped areas” really an irreversible law? Maybe we should think from another angle. In the face of the global economic downturn, why can the EU silk industry remain stable? In 2015, China’s world silk merchandise export rankings, China still ranked third. From January to March this year, China’s exports of genuine silk products fell by 15.72% year-on-year. If China’s exports of real silk goods continue to experience double-digit declines, then our generation of silk people will not be against the ancestors?

In Southeast Asia, the development of silk has been vigorously promoted. The export of silk products in China has been declining. When the world silk industry is facing a new change, how should China's silk turn the tide and meet the challenges? First of all, we should establish the firm belief of the silk power. China has a profound silk cultural heritage, a sound and mature industrial chain production capacity and a vast domestic market, which is unmatched by any country in the world. However, in order to truly build a silk power, China still has a lot to go. The author believes that there are two problems that must be solved.

First, China must have a correct industry direction and positioning to become a silk power. In recent years, driven by the transformation and upgrading of traditional industries, the silk industry seems to have a direction of deviation. The silk industry is not only a traditional industry, but also a foreign trade for a long time. In the transformation and upgrading, many enterprises simply abandon foreign trade and change their domestic sales, causing the embarrassment of “toddler”.

In the industry, the direction and positioning of the industry, who is the silk consumer group and what is the main product of silk, has become irrelevant. The chairman of the Italian Silk Association has said that silk should be a luxury. As a positioning of Italian silk, it should be good. However, if the "silk should become a luxury" into the product positioning of China's silk industry, it will have a negative impact on the subconscious of silk people in China, and as a result, more and more people who love silk will have higher prices. Silk products are discouraged.

Although mulberry silk is expensive as the “fibre queen”, the most important category of silk export is always clothing and apparel. The domestic and international consumer groups are always the general public. We must not be fascinated by the legend that “historic silk is exclusively for the royal family and aristocrats.” Today, mulberry silk is only a natural organic textile material. Although it is good to take, the market inspection standard is mainly cost-effective. If the price exceeds the purchasing power of the public, other textile materials will replace it. If the silk industry only positions a very small number of elites into its own consumer groups and positions the main products of silk as luxury goods and cultural creative products, it is actually giving up the largest consumer groups and market demand.

Aiming at the needs of the largest consumer groups, we have developed new fabrics, new styles and new products at a low price, focusing on affordable clothing, carefully tapping the traditional international market, and spare no effort to open up new international markets. Combining fashion trends, attracting younger generations at home and abroad to fall in love with silk. This should be the correct direction and positioning of the Chinese silk industry. Of course, improving the design level, creating a self-owned brand, and being among the best in the world are also the way for Chinese silk to go, but this also depends on the accumulation of the silk industry, and different strategies should be adopted at different stages.

Second, China must become a silk power and must carry out the "supply-side reform" of the industrial chain. During the “Thirteenth Five-Year Plan” period, the focus of the “supply-side reform” in China’s silk industry was to “go to silk production capacity and go to silk stocks”. China's silk reeling companies have a loss of one-third of the year. The main reason is the overcapacity. The overcapacity of silk reeling led to the purchase of silkworm cocoons by silk reeling companies, resulting in high prices, high prices and high silk prices. The high price of silk resulted in fewer orders and a shrinking market share. China's silk industry is plunging into such a vicious circle, and it has become an urgent task in the industry to go to silk production capacity. The national silk administration department should study how to organize and implement the supply-side reform of the silk industry, and how to plan for the production capacity of silk reeling.

Nowadays, more and more bank loans have accumulated in the silk warehouses and the triangular bonds of the silk industry chain. It can be said that the silk industry has accumulated a large “block lake”. The upstream silkworm cocoons are constantly influx, and the downstream exports are not open. The longer the time, the greater the crisis. The stocking of silk reeling is to drain the water in the “damage lake” as soon as possible. The current inventory of silk reel must play the role of the National Reserve Silk Fund, which can directly help enterprises to go to stock.

The author believes that the price of silk should be guided downwards when purchasing and storing pricing, with the aim of alleviating the financial pressure of enterprises and introducing production orders. The Jiaxing and Guangxi silk markets should also comply with the price down strategy on the Reel Futures Index. At present, the silk market is basically priceless and has no trade, and the transaction volume is meager. The recovery of trading volume must be the best policy for market operations.

Of course, the key subject of destocking is the silk reeling enterprise. The silk reeling enterprises that have not been eliminated from the production capacity must seize the opportunity of slimming, reduce the price and ship, and restore the healthy body of the enterprise. "There is no such thing as the current shackles, or the changes in the accidents." The "congestion lake" crisis in the silk industry is the current shackles and must be resolved.

Silk is in China, carrying history, engraving culture, symbolizing glory and glory. This is the treasure left by the ancestors. The inheritance and development are the responsibility and mission of contemporary silk people. In the face of the current complicated and volatile situation of the international silk industry, whether it is to migrate or stick to its ancestral industry is an answer we must make.

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