Summary Speech by Secretary-general Fei Jianming o

Mr. Fei Jianming

Secretary-general of International Silk Union

The Seminar on New Development Trends of Silk Industry is very positive and fruitful. As a moderator, I would like to make a few comments for your discussion. I have participated in many international silk conferences, and always heard the problems about the silk price and silk quality. We believes that every problem needs a response and a solve method. If we don’t get a response every time we talk, it will become boring. Although it is difficult, today I want to take some risks and make a response, trying to talk about serious and sensitive topics in a relaxed atmosphere. If it is wrong, it is my personal responsibility and does not represent ISU secretariat.

1. According to the current situation of different countries’ silk development, the participants proposed the development problems, and explored the path and method of solution. Where is the silk industry going? This is an important proposition that the world's silk people care about. Despite the difficulties, everyone here is full of hope for the future. We all believe that challenges and opportunities coexist, and actively take countermeasures. Facing the severe economic situation, the import and export amount of Italian silk from January to July this year increased by more than 10%, with imports of $ 1.112B and exports of $ 2.226B; Chinese silk is actively promoting major scientific research such as sericulture industrialization and silk reeling intelligence; Vietnamese and Cambodian silk are consolidating the industrial base and seeking to achieve industrial upgrading; Brazil has also upgraded sericulture production equipment. These conditions make us happy. The world’s silk has a history of more than 5,000 years, and the tenacious vitality of silk is beyond our imagination. We can fully have confidence in the future of silk.

2. At present, the most anxious situation is the fluctuation of silk price and the decline of raw silk quality. I fully agree with the point “price turbulence reduces consumption” made by the representative of Switzerland. The representative of Japan also mentioned the same point in his speech. I believe this is everyone's consensus. I have also written an article on "silk price determines the survival and death of industry". The proposal by the representative of Japan “establish Organization of Silk Exporting Countries (OSEC) leading by China to stabilize raw silk price” also reflects the urgent need for countries to stabilize the price of silk. The president of Italian Silk Office emphasized the importance of raw silk quality, and believed that “it is urgent to defend silk and silk players with some very precise policies”. These requirements are correct, and these are the requirements from the customers to the suppliers, and can also be said to be the requirements from the silk consumer countries to the silk producing countries. Within the family of the Union, it can be said that the attitude towards the request is friendly and moderate.

Chinese raw silk production accounts for about 80% of the world's raw silk production, so these requirements should also be directed at China, and Chinese silk should bear these responsibilities. But, I stand on the position of the secretary-general of ISU and must also say with fairness: "China silk is working hard and the world silk needs to work together".

For example, Zhejiang Sci-Tech University of China is working with Babei Group to develop a “whole-age artificial diet factory sericulture construction project”, and is also working on the digitization, short-flow, and intelligent upgrade of automatic reeling machine; Guangdong Silk-Tex Group has reached a major investment project with the Kenyan government to invest ￥1 billion to build 100,000 hectares of sericulture base, help 300,000 people to find jobs and create foreign exchange of $1 billion. Every success of these projects can change the current situation of the silk industry, but it must take time, so these efforts are good for the long term.

So what should we do now? As we all know, the silk industry is a completely liberalized market economy in China. It is impossible for the Chinese government to formulate policies to control the price turbulence. The National Cocoon and Silk Coordination Office of Ministry of Commerce of the People’s Republic of China has also set up a reserve silk fund, which also released reserve silk when the silk price rose last year, they wanted to adjust the silk price, but did not succeed. In fact, the price of Chinese silk has risen by more than 30% in 2017 and has fallen by more than 20% in 2018. It is the invisible hand of the market economy that is in control. Maybe there is the role of online virtual prices, and I also doubt whether there is any speculation in capital, but there is no evidence to explain. Therefore, just as the reason Cathaya CEO Wu Jingen analyzed, mainly due to the surge in demand in Chinese domestic market, demand has fallen this year, and silk prices have fallen. In essence, supply and demand in the market economy determine the fluctuation of silk price. In the face of economic laws, the power of the government, association, and union are invincible. The price of world crude oil, the price of Australian iron ore, and the price of US soybean can not escape these laws.

But are we at a loss? Nope. After all, the space of silk industry is not large, the price stability and quality assurance that Europe and Japan need can be achieved within a certain range. Of course, this requires the joint efforts of the supply and demand sides. The high-quality raw silk that Europe needs is about 1,200 tons a year. This year, Italy imported 289 tons of raw silk from January to July, and it will not exceed 600 tons in the whole year. The total amount of high quality raw silk produced in China is much higher than demand. Yesterday, I heard the general manager Zhang Guoxin said that the quality of the twisted silk produced by his factory in Soochow can be exported to Japan and Europe. There are also many high-quality silk mills that can export silk to Europe or Japan. It can establish a solid price alliance or joint venture between supply and demand companies. At the beginning of each year, the number of orders for the full year price and the high quality level of the commodity inspection will be signed, both parties must share the risks and keep their promises. It is difficult to do this, but if it is done, the problem of unstable prices and quality can be eliminated.

3. International Silk Union (ISU) is a service public welfare platform with the purpose of “communication and cooperation, development with concerted efforts”. The working expenses of the 1st ISU were donated by Zhejiang Cathaya International Co., Ltd., High Fashion International Limited and Hangzhou Silk Culture and Brand Research Center. So, some can be done and some cannot be done because of limited capacity. Such as the research project that ISU and Brazil cooperated to spend $10,000, it can be done, but if it costs $100,000, it is impossible to be done. This needs the member units to understand. In these three years since ISU established, exchange is the first job, the "Topic Discussion on the Sustainable Development of Silk Industry" held last year and the "Seminar on New Development Trends of Silk Industry" held this year are all very good exchange experience. I think 2nd ISU’s main job should be transferred to the cooperation, including the cooperation of five professional committees of ISU, cooperation between the ISU member units, cooperation between the enterprises. The blooming and achievements of a large number of cooperation projects will definitely promote the development of the world silk industry.

This is some of my opinion. Welcome to discussion and correct. If you want to express your opinions right now, you can come to the stage. The colleagues who hope to discuss also can send the email to the Union Mailbox. I will answer the questions with humility and patience.

Thank you all.