As shown in the figure, the foreign trade prosperity index closed at 1243.98 points in July 2014, down 0.65% month-on-month and 11.13% year-on-year; the foreign trade price index closed at 120.62 points, down 1.07% month-on-month and 5.53% year-on-year; foreign trade confidence The index closed at 1050.71 points, down 4.74% month-on-month.
Weak external demand and foreign trade boom continue to weaken
The EU’s green barriers have been upgraded, and textile exports are facing another big test. Recently, the European Union has released new regulations on textile environmental labeling. The “green barriers” have been upgraded again, and textile companies are facing another “big test” in their exports. Since the launch of the EU environmental labeling scheme, the EU has continuously revised textile environmental labels for toxic and harmful substances in textiles and clothing, covering harmful chemical substances, proportion of recycled and renewable components, energy efficiency and water resources management. Recently, the European Union’s “Official Journal” published resolution 2014/350/EU, officially releasing new regulations for textile environmental labels (Eco-label). The new regulations expand the scope of restricted products, including textiles, clothing and accessories, and textiles for indoor use. The new regulations stipulate the restricted use of hazardous chemical substances, focusing on the list of highly concerning substances in the candidate list of REACH regulations. limits of textiles, and clarify the environmental protection guidelines that should be followed in each process of textile production and processing.
Competition in the international market has intensified and market demand is limited. Competition in the European and American markets is fierce and market demand is insufficient; although emerging markets such as Africa are growing rapidly, there are many companies and products entering, and profit margins are constantly narrowing. In July this year, the foreign trade situation in Keqiao District, Shaoxing City was complex and severe. Multiple pressures such as weak expansion of external demand, intensified trade frictions, and rising domestic production costs have not yet been fundamentally alleviated. Weak external demand means that the overall environment of foreign markets is not good, which is one of the main problems of weak external demand; trade friction has always been a headache for foreign trade companies and has been unavoidable for many years. It is recommended that export companies actively learn the rules of the international game. Adapt more to international trade rules.
Factor costs are rising, and textile and clothing orders are shifting. Due to high labor costs in China, international buyers have transferred some textile and apparel orders to Southeast Asian countries. As a competitive industry, the textile and garment industry will still face greater difficulties and challenges. Due to the current rise in domestic labor costs, the comprehensive labor costs in Vietnam, Bangladesh and other places are 1/3 or even half lower than those in China. Affected by factors such as the external environment, the economic downturn in European and American countries, and rising domestic factor costs, international clothing orders are shifting to Southeast Asia, and Shaoxing textile and clothing export companies are facing great challenges. Now the production efficiency of textile and garment enterprises cannot keep up with the increase in costs. The quantity-based development model has come to an end. Small and micro enterprises are still not optimistic about this year’s development prospects, and the industry’s development speed continues to slow down.
Exports slowed down due to insufficient demand. While demand in the European and American markets is weak, exports from some emerging markets slowed down in July this year due to adverse factors such as slowing economic growth in emerging markets and exchange rate fluctuations. This is also a major reason why the foreign trade confidence index fell by 4.74% month-on-month in this issue. Among them, cotton and its blended fabrics fell by 16.51% month-on-month, linen and its blended fabrics fell by 15.95% month-on-month, tufted fabrics fell by 12.81% month-on-month, curtains and curtains fell by 15.51% month-on-month, and knitted and crocheted fabrics fell by 18.73% month-on-month. %, thus directly affecting the decline of the overall foreign trade prosperity.
Intensified international competition suppresses prices
Southeast Asian countries compete for export market share. International market competition continues to intensify, the cost advantage of China’s textile industry to maintain strong global competitiveness continues to weaken, and the global pattern of the textile industry is still undergoing subtle changes. Countries such as Vietnam, Pakistan, Bangladesh, and Turkey are competing for China’s textile export market with a cost advantage that is far lower than China’s. Under the squeeze of low-cost labor force in Southeast Asia and other countries, some textile and garment enterprises in Shaoxing and China Textile City Textile Company’s mass products had to accept some foreign orders at reduced prices. The profit margins of mass products were relatively compressed, driving the foreign trade price index to fall month-on-month in July.
Competition intensifies and prices fall. In July, many foreign trade companies had insufficient orders from Europe and the United States, exports from emerging markets slowed down, and prices of mass products softened, which affected the decline in the export product price index in this period. Some textile export and foreign trade companies promoted their products due to surplus, which also caused a corresponding drop in prices. For example, in this issue, the foreign trade price index of cotton and its blended fabrics, tufted fabrics, embroidery, knitted crocheted fabrics, and impregnated, coated, and covered textile products fell in varying amounts, among which: the month-on-month decrease in cotton and its blended fabrics was Tufted fabrics fell by 5.33% month-on-month, embroidery products fell by 18.38% month-on-month, and knitted crocheted fabrics fell by 3.12% month-on-month, which directly affected the decline of the total foreign trade price index.
Lack of voice affects prices. This month, international market demand continues to decline, and most small, medium and micro enterprises in Keqiao District, Shaoxing City lack a say in price due to mass products. In order to seek foreign orders, foreign trade companies have no choice but to “fight costs and prices.” The initiative on prices is still in the hands of foreign businessmen to a certain extent. Due to competitive pressure, some foreign trade companies have repeatedly reduced their prices in order to obtain orders, which has relatively affected the price trend of this period.
Export companies mostly focus on short- and medium-term orders. Affected by high labor costs, etc.Affected by this, the number of long-term foreign trade orders has declined, and textile export companies mostly focus on short- and medium-term orders. These short- and medium-term orders directly reduce the export profits of enterprises. In order to increase product prices, textile export enterprises began to focus on brands and move towards the high-end market. Some foreign trade companies in Keqiao District, Shaoxing City have adopted active structural adjustments to improve the innovation level of the manufacturing industry and appropriately reduce costs, forcing companies to find new markets and new channels for development. At the same time, we are also constantly exploring new marketing channels, such as keeping up with the development of the times, establishing e-commerce platforms, building our own brands, using online development methods to expand domestic markets, and also using methods similar to online display to develop foreign markets.
Forecast of the next foreign trade index
Regarding the export situation in August this year, industry analysts believe that although the global economic recovery this year has not been as strong as expected and the overall performance of the international market is stable and weak, the export environment of China’s textile industry is basically good. From the perspective of development trends, as the positive impact of economic recovery on the consumer market gradually deepens, the export growth rate of China’s textile industry is expected to show a trend of oscillation and recovery. Through active structural adjustment, foreign trade will improve the innovation level of the manufacturing industry, appropriately reduce costs, maintain a certain degree of stability in the exchange rate, and introduce some measures to facilitate customs clearance. It is a high probability that exports will improve, but we cannot expect foreign trade to return to high growth. Issues such as track, resources, environment, and labor costs are still prominent, which will affect the sustainable development of China’s textile industry.
