The decline in textile exports may be a foregone conclusion
Abstract: The decline in my country’s textile and apparel exports in 2016 is a foregone conclusion, unless there will be counter-cyclical unconventional factors in the later period. Accordingly, my country’s textile and apparel exports will experience a rare continuous decline since last year’s decline in more than 20 years. Compared with textile exports, the situation of clothing exports this year is almost bleak. Except for the export data in the second quarter, which was basically flat, the rest of the time was negative growth. In this regard, He Xiaosi explained that compared with the transformation of the textile industry in recent years
Key words:
The decline in my country’s textile and apparel exports in 2016 is a foregone conclusion, unless there will be counter-cyclical unconventional factors in the later period. Accordingly, my country’s textile and apparel exports will experience a rare continuous decline since last year’s decline in more than 20 years.
Compared with textile exports, the situation of clothing exports this year is almost bleak. Except for the export data in the second quarter, which was basically flat, the rest of the time showed negative growth. In this regard, He Xiaosi explained that compared with the more technology-intensive and capital-intensive characteristics of the textile industry since its transformation in recent years, the labor-intensive characteristics of the clothing industry have not changed much.
Breaking down the cost structure of related products, it can be seen that the raw material cost of textile (gauze) products accounts for 65% to 70% of the total cost, and the raw material cost of clothing products accounts for close to 5 to 6% of the total cost. The cost is low, the added value is low, and the competition of related products is mainly reflected in the cost. Therefore, in comparison with a series of advantages in raw materials, labor, and policies in Southeast Asia, China’s comparative advantage in apparel exports is increasingly weakening.
The impact of the G20 Hangzhou Summit is phased, and its restrictions on my country’s textile and apparel exports will be eliminated as factories resume production. “In the fourth quarter, the decline in my country’s textile and apparel exports will narrow.” But He Xiaosi also reminded that the Internet Conference to be held in November also arranged for limited production in surrounding areas when it was held last year. This year’s conference is scheduled to be in Wuzhen. It is more likely that a limited production stoppage will be arranged by then, which will also have a negative impact on textile and apparel exports.
The usual “Golden Nine” market caused by Christmas orders did not appear. In September, my country’s textile and apparel exports experienced an unexpected increase in decline despite the narrowing of the previous decline. Customs data shows that in September alone, my country’s textile and apparel exports were US$22.765 billion, down 15.4% year-on-year. The decline was 12.3 percentage points larger than in August (exports dropped 3.1% year-on-year) and wider than September last year (exports dropped 5.7% year-on-year). Nearly 10 percentage points. From January to September, the cumulative exports of textiles and clothing were US$198.654 billion, a year-on-year decrease of 6.02%. The decline expanded by 1.4 percentage points from the previous eight months and by nearly 3.6 percentage points from the first half of the year.
The traditional peak season of the textile market is not prosperous, and the chill in the export market makes He Xiaosi, Textile and Apparel Information Manager of Huarui Information, feel that winter has arrived early for the industry. Broken down by monthly data, since this year, the year-on-year growth rate of textile and clothing exports has achieved high positive growth in March, and has basically continued the downward trend since then. Only textile exports achieved positive growth again in August. At the same time, clothing exports have continued to decline since May this year. Although the decline increased in September, the decline has not changed much. In September, textile exports were US$7.72 billion, a year-on-year decrease of 20.5%, which was 25 percentage points lower than August (exports were US$10.246 billion, a year-on-year increase of 5.2%); clothing exports were US$15.045 billion, a year-on-year decrease of 12.6%, which was 25 percentage points lower than August (exports were US$10.246 billion, a year-on-year increase of 5.2%). US$17.686 billion, down 7.3% year-on-year), a decline that expanded by 5 percentage points.
It can be seen that the year-on-year growth rate of textile and apparel exports expanded from a single-digit decline in August to a double-digit decline in September, mainly due to the fact that textile exports changed from positive growth in August to 9 sharp decline in the month. Why did textile exports turn around in September? Although the breakdown of specific products has not yet been released, He Xiaosi pointed out in an interview with a reporter from International Business Daily that this was mainly due to the fact that many textile printing and dyeing companies in Zhejiang and other places were affected by the G20 Hangzhou Summit. The impact of the company’s limited production suspension for nearly half a month. Textile exports mainly consist of yarn, fabrics and finished products, of which fabrics account for about 50%. The decline in fabric exports, which accounts for half of the country, will undoubtedly directly affect the export trend of textiles.
In order to ensure the convening of the G20 Hangzhou Summit in early September, Hangzhou and surrounding areas implemented a production limit for nearly half a month (August 24 to September 6). The printing and dyeing volume in Zhejiang accounts for about 65% of the national production capacity, and the processing of gray fabrics into fabrics mostly requires post-processing processes such as bleaching, dyeing, and printing. During the period when printing and dyeing factories stopped production and restricted production, the professional cloth and clothing markets in many places in Zhejiang also fell into a state of shutdown with no goods in or out. Based on this, He Xiaosi judged that the main factor that led to the shift from positive growth in textile exports in September was the stagnation of fabric production caused by the large-scale stagnation of printing and dyeing production, which in turn affected the export of fabrics.
Of course, the continued impact of weak external demand, industrial relocation, and dispersed orders have also restricted the export of textiles and clothing to varying degrees. This year, as foreign trade demand continues to be weak, black swan events have occurred frequently in the Philippines, Turkey and other places, and Brexit has further worsened the foreign trade environment.
At the same time, my country’s industries including textiles and clothing are in the throes of transformation.� status. Based on this, He Xiaosi judged that the main factor that led to the shift from positive growth in textile exports in September was the stagnation of fabric production caused by the large-scale stagnation of printing and dyeing production, which in turn affected the export of fabrics.
Of course, the continued impact of weak external demand, industrial relocation, and dispersed orders have also restricted the export of textiles and clothing to varying degrees. This year, as foreign trade demand continues to be weak, black swan events have occurred frequently in the Philippines, Turkey and other places, and Brexit has further worsened the foreign trade environment.
At the same time, my country’s industries, including textile and apparel, are in the throes of transformation. With rising costs, my country’s comparative advantage in textile and apparel production is weakening compared with Southeast Asian countries such as Vietnam and Cambodia. , trade orders have been scattered. Under this situation, many Chinese companies have transferred part of their production capacity to Southeast Asia, which has also caused the diversion of related trade orders.
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