Yang Zhaohua: How do you view the transformation and upgrading of the home textile industry from an industry perspective?

This issue is of a macroeconomic nature. This time, the master has outlined a plan for the 12th Five-Year Plan and the home textiles sector. What you just said is not incorrect—it reflects the overall situation in our country. All industries are facing the need for restructuring and upgrading. So, how do we approach this within the Home Textiles Association? These two major macro challenges always have a starting point. The question is, where should we begin? According to our research, the home textile industry in China grew at a rate of over 20% between 2000 and 2009. Our market share has remained around 20%, with a slight increase of 22% in the past five years. In terms of China’s textile industry as a whole, it is largely driven by domestic demand, which differs from what many foreign media or international friends might assume. When people talk about manufacturing in China, they often think of export-oriented production, but this is not the case for home textiles. Our industry is primarily fueled by internal demand. In particular, the national policy in 2008 brought significant changes. We faced the global financial crisis, and saw adjustments in both policy and macroeconomic strategy in 2009. Despite these challenges, the home textile industry continued to grow. In 2009, while exports fell by 6.3%, the entire industry still achieved an 11% growth. That year, most industries experienced negative growth, but the textile sector—especially home textiles—showed positive momentum, driven mainly by domestic demand. Based on this solid foundation, how can we proceed with structural adjustment and upgrading? We must start from the source—supply chain development, the application of new raw materials, and the importance of R&D and design. On the other end, we also need to focus on channel innovation and cross-border collaboration. It's essential that all parts of the industry work together, rather than individual companies operating in isolation. We aim to build on the collective strengths of the industry, even if some areas are more developed than others. While there is still a gap between the largest Chinese companies and their overseas counterparts, cooperation across the board—from R&D to distribution—is key. Moreover, in the process of industrial upgrading, we must pay special attention to small and medium-sized enterprises (SMEs). If SMEs aren't properly supported, the overall upgrade won’t be effective. To address this, we’re working closely with local governments and associations to support the majority of SMEs in the industry. This year, we’ve proposed a K-degree layout, K-degree development, and K-degree service model. It’s like a pagoda structure, where different levels of enterprises receive tailored support based on their needs. Some may be more advanced, while others are still developing. We have a good framework for leading enterprises, and we will either introduce external resources or develop them internally. As SMEs improve their scale and capabilities, the broader industry upgrade will follow. We’re focusing on design, R&D centers, and resource deployment. Resource allocation is comprehensive, including labor productivity. Human capital is crucial. Recently, especially since the beginning of this year, raw material prices have surged rapidly. The rising cost of cotton and chemical fibers has placed significant pressure on downstream companies. To address this, we are implementing updates, establishing testing platforms, and enhancing intellectual property protection. These efforts are aimed at better supporting SMEs. We have already started. A meeting was held in July, and we are now actively engaged in a quality credit initiative led by seven national ministries. The initiative includes home textiles, and we will launch it this month, in August. Quality is the foundation, and alongside it, we must ensure standardization. How to achieve quality and consistency is part of the overall strategy. This is the current situation.