Operation of China’s Textile Machinery Industry in 2021 and the Outlook of 2022

In 2021, China’s textile machinery industry has overcome many unfavorable factors such as repeated epidemics, rising raw material prices, poor logistics, and power and production restrictions caused by controlling energy intensity and energy consumption. Its production and operation recovered steadily. And the domestic textile machinery market saw a booming development in general. Thereinto, its main economic indicators rebounded significantly; the exports have reached a record high.


  1. Economic operation


  1. Industry scale

In the first three quarters of 2021, the textile machinery industry earned CNY 67.95 billion of prime business income, up 39.02% year-on-year. Taking the same period in 2019 as the base period, the two-year average growth reached 2.62%. It had CNY 115.69 billion of total assets, up 16.61% year-on-year.


  1. Industry benefits

According to the statistics of the National Bureau of Statistics, the operating income of textile machinery enterprises above designated size saw a growth of 27.28% year-on-year in 2021. Taking the performance of 2019 as the base, the two-year average growth reached 7.61%. The total profit of textile machinery enterprises above designated size increased by 38.38% year-on-year, saw an average increase of 14.58% in the past two years. The operating income margin was 8.12%, up by 0.53 percentage points over the same period of 2020. 13.67% of enterprises operated in red, decreasing 7.76 percentage points year-on-year. The industry’s operating income, profits and other indicators have fully recovered to pre-pandemic levels. In 2021, the cumulative operating income and profits both maintained double-digit growth year-on-year, but their growth rate gradually slowed down.


  1. Structure of costs and expenses

According to the National Bureau of Statistics, in 2021, the costs and expenses of China’s textile machinery enterprises above designated size grew by 25.99% year-on-year, in which, prime operating costs increased by 27.32% year-on-year, covering 90.25% of the total; operating expenses up 28.57%, accounting for 3.75% of the total; management expenses increased by 12.75%, accounting for 5.47% of the total; financial expenses down 26.34%, accounting for 0.53% of the total.


  1. Enterprise’s confidence

According to the China Textile Machinery Association (CTMA)’s survey, the operation of enterprises last year has improved significantly compared with the same period of 2020, of which nearly 90% of the enterprises saw growth in the operating income at different rates. 80% of the enterprises have more orders than the level of the same period of 2020; 79% of the enterprises reached more than 80% of capacity utilization rate. Increasing costs, insufficient domestic and foreign market demand, and difficulty in recruiting workers are the main problems facing enterprises. 35% of the surveyed companies have optimistic expectations for 2022, and 53% believe that their orders in 2022 will increase compared to 2021.


  1. Import and Export


According to the General Administration of the Customs, China’s foreign trade of textile machinery totaled US$ 8.44 billion in 2021, up 13.26% year-on-year. Thereinto, the exports of textile machinery reached US$ 4.81 billion, growing by 5.22% year-on-year, while the imports stood at US$ 3.64 billion, up by 26.00% year-on-year.


  1. Import

In 2021, China imported US$ 3.64 billion worth of textile machinery from 70 countries and regions, up by 26.00% year-on-year. By product category, chemical fiber machinery ranked first with imports amounting to US$ 950 million, down 10.39% year-on-year, accounting for 26.12% of the total. The other categories among the seven major product categories saw a different degree of growth.


  1. Export

China exported textile machinery and equipment to 191 countries and regions last year, with US$ 4.81 billion worth of textile machinery, growing 5.22% year-on-year. The exports of knitting machinery ranked first, reaching US$ 1.19 billion, surged by 45.21% year-on-year, accounting for 24.75% of the total, and then followed by printing, dyeing & finishing machinery, auxiliary equipment & spare parts, nonwoven machinery, spinning machinery, weaving machinery, and chemical fiber machinery. The spinning machinery exports saw the largest growth compared with the same period of 2020, while the export of nonwoven machinery dropped significantly after the rapid growth in 2020.


III. Sub-industry performance


  1. Spinning machinery

According to the CTMA’s statistics of key production enterprises, in 2021, the sales of drawing frames ballooned by 66.7% year-on-year; that of roving frames soared by 101.6% year-on-year; the sales of cotton spinning frames surged by 117.8% year-on-year; the sales of rotor spinning frames increased by 61.1% year-on-year.


The overall operation of the spinning machinery showed a skyrocketing trend in 2021. Due to the relatively stable domestic epidemic prevention and control, foreign demand for Chinese manufacturing has grown significantly, resulting in soared foreign trade orders of textile machinery. Coupled with the transfer of some textile and garment orders to China, both the production and sales of spinning enterprises are booming, therefore, the willingness to upgrade equipment or expand production scale has increased.


In general, spinning machinery enterprises have full production tasks throughout 2021. By adjusting rest time and working overtime, enterprises have overcome the pressure of dual controls over energy intensity and total energy consumption in the fourth quarter, reducing the impact of order delivery. It is understood that new orders for spinning machinery companies are not too many in the first quarter of 2022; most companies have undertaken orders from the previous year, performing well in both production and operation.


  1. Weaving machinery

In 2021, the annual production and sales of the weaving machinery industry declined after a high-level performance. The production and sales of technical textiles such as cord fabric (in tyres), awnings grew rapidly. However, due to the decline in the sales of woven garments, the sales growth of rapier looms slowed down. While the stable growth of home textiles such as curtain fabrics, and filament fabrics for autumn and winter wear in the fourth quarter of 2021 drove a steady increase in the sales of water-jet looms. In addition, the upgraded equipment and ever increased adaptability promote the growth in the sales of air-jet looms. Affected by fluctuated raw material prices, rising sea freight prices, dual controls over energy intensity and total energy consumption, and increased labor costs, corporate profit margins have been squeezed, posing a greater challenge to the overall operation of the industry.


According to the statistics of the CTMA, in 2021, the sales of high-speed rapier looms of major domestic manufacturers surged by 55.56% year-on-year; the sales of air-jet looms ballooned by 52.38% year-on-year; that of water-jet looms grew by 25.00% year-on-year.


Looking forward to this year, the digitalization and intelligent transformation of weaving equipment and the adaptability of weaving machinery varieties will continue to expand, providing strong support for the development of the industry. Therefore, it is expected that the annual production and sales of air-jet looms will maintain steady growth; the filament weaving industry is expected to maintain measured growth; the sales of water-jet looms will increase; the decline of woven apparel will pose challenges to the sales of rapier looms.


  1. Knitting machinery

In 2021, the market of the three major types of knitting machinery performed well, but the pressure for a stable operation still exists.


The annual economic operation of the circular weft knitting machine industry declined after a growth. In the first half of 2021, the strong market demand for some fabrics promoted the expansion of the downstream weaving enterprises, resulting in a surge in the production and sales of circular weft knitting machines. In the second half of 2021, with the continuous increase in the number of circular weft knitting machines, its market operation has stabilized. Under the current complex situation, circular weft knitting machine companies will enhance the R&D of new technologies, and improve quality and core competitiveness. According to the statistics of the CTMA, the circular weft machine increased by 20.8% year-on-year in 2021.


The overall economic situation of the warp knitting machine industry performed generally well throughout the year. Benefiting from the stable running speed and the expanded machine width, the capacity of the high-speed warp knitting machine is further improved. The sales have achieved substantial growth due to strong market demand. The wide application of fleece and vamp promotes the sales of double-bed warp knitting machines. The lace machines not only focus on the traditional market but also expand their application in home textiles, resulting in a steady growth throughout the year. Multi-axial warp knitting machines are mainly affected by downstream markets such as wind power materials and infrastructure. According to the statistics of the CTMA, the sales of warp knitting machines in 2021 soared by 57.1% year-on-year.


The economic operation of the flatbed machine industry has shown great fluctuations throughout the year, and the annual production and sales have recovered to the level of the same period in 2019. In the first half of the year, the industry experienced a staged recovery. On the one hand, some orders of sweaters and vamp have returned to China due to the pandemic in Southeast Asia. On the other hand, the promotion of new technologies such as intelligent yarn carriers has further improved the machines’ efficiency and quality, upgrading the equipment. In the second half of 2021, the saturated market led to a decline in the production and sales of flatbed machines. At present, the fully-fashioned technology is being further developed and improved, leading to the technological upgrading of the industry. According to the CTMA, the sales of flatbed machines in 2021 surged by 116.7% year-on-year.


  1. Printing, dyeing & finishing machinery

In 2021, the sales of mercerizing machines grew by about 12% year-on-year; continuous scouring and bleaching machines perform the same as the same period of 2020; washing machines increased by about 33% year-on-year. Continuous pretreatment for knitwear is gradually accepted by users, bringing new growth points. Therefore, continuous pretreatment equipment saw continual growth.


Circular screen printing machines saw a growth of 8% year-on-year, which is still the mainstream equipment for printing. In 2021, the relocation of printing and dyeing enterprises in Jiangsu province, Zhejiang province, Guangdong province brought about the upgrading of equipment. Affected by circular screen printing machines and digital printing machines, the sales volume of flat screen printing machines decreased by 13% year-on-year. At present, most flat screen printing machines are based on the printing demand for thick fabrics such as plush. Its competitive advantage and market demand continue to weaken.


In recent years, digital printing machines featuring small batches and quick responses have been developing rapidly, showing outstanding advantages in the current market. According to the CTMA, in 2021, digital printing machines maintained a growth trend.


In 2021, the domestic demand for stenter was strong. Its sales of main enterprises grew by about 23% year-on-year. The increase in the output of printed and dyed cloth as well as stricter requirements for energy conservation and emission reduction have driven the rapid growth of its sales.


Looking forward to this year, as the relocation of domestic printing and dyeing enterprises is coming to an end, the market demand may become weak. Coupled with the global pandemic and the uncertainty of international trade under geopolitical conflicts, enterprises need to cultivate their capacity to handle change and resist risks.


  1. Chemical fiber machinery

According to the statistics from the CTMA, the shipments of polyester fibers, polyamide fibers and other filament spinning machines in 2021 increased by 14.86% year-on-year, while the shipments of high-speed false twisting machines soared by 115.83% year-on-year.


In the second half of 2021, due to the extension of the industrial chain of leading domestic filament enterprises and the rapid development of the differentiated staple field, the polyester staple industry gradually enters a period of high-speed expansion, which has promoted the accelerated transformation of chemical fibers from conventional varieties to composite fibers. It will further improve the scale and technical level of the polyester staple industry.


It is expected that the chemical fiber market will keep steady development in 2022. The new orders received by spinning machine and texturing machine manufacturers have covered the second quarter of this year. Affected by the extension of the industrial chain of large chemical fiber enterprises, it is expected that there will be a certain growth in staple equipment.


  1. Nonwoven machinery

According to the statistics from the CTMA, the shipments of spunlaced nonwovens production lines in 2021 grew by about 15% year-on-year; the shipments of needlepunch nonwoven lines surged by 79.04% year-on-year; spunbond, meltblown, and SMS nonwovens production lines dropped by 73.8% year-on-year.


On the whole, with the ever stricter requirements for ecological and environmental protection, sustainable development has become a trend for the global textile industry. The proportion of spunlaced nonwovens has increased in the field of hygiene and health as well as personal protection, indicating a good development of the spunlaced nonwoven equipment market. However, it tends to saturation due to the growing production capacity in the past two years. Needlepunchd nonwovens equipment saw a great increase compared to the previous year. As the industry enters a mature period, the profit margins of conventional products are gradually shrinking. At present, the demand for the geotextiles market for infrastructures such as transportation, water conservancy, and construction has doubled, which will further promote related equipment. The demand for meltblown, spunbonded and SMS nonwovens production lines has dropped to normal levels, while two-component spunbonded and PET spunbonded production lines have grown significantly.


  1. Operation Forecast of the Annual Textile Machinery Industry in 2022


In 2021, the global demand for textiles and apparel picked up, resulting in the recovered market demand for textile machinery. The textile machinery industry performs well, with fruitful technological innovations, and continuous advancement of intelligent manufacturing. The pace of intelligentization of the textile machinery industry is also accelerating, which cultivates a large number of intelligent manufacturing application scenarios.


In 2022, the international economic situation will become more complicated. The geopolitical changes brought about by the Russia-Ukraine conflict and the uncertainty of the COVID-19 pandemic took a heavy toll on the recovery of the world economy. Factors such as fluctuations in the international capital market, high commodity prices, poor international trade and logistics, have a damaging effect on the foreign trade environment. The Report on the Work of the Government in 2022 has clarified the GDP growth of around 5.5 percent. The relevant departments have successively issued and will continue to implement many policies that maintain stable industrial and economic operations, expand domestic demand, and promote consumption. In addition, the unfavorable factors such as the shortage of coal power supply that affected the economic operation of the industry last year, power and production restrictions, and the skyrocketing international freight rates, may be alleviated in 2022, which will also conducive to promoting the steady growth of the industry.


In 2022, with the gradual recovery of the international textile production supply chain, the return of overseas textile orders may gradually slow down. But fortunately, under the development pattern of “dual circulation”, more explorations will be carried out in cooperation and exchanges between domestic and foreign textile enterprises and textile machinery enterprises. The entry into force of the Regional Comprehensive Economic Partnership (RCEP) will bring more opportunities for regional trade and investment.