The latest statistics released by the General Administration of Customs show that from January to August, China’s exports of clothing and clothing accessories increased by 17.9% year-on-year. What are the reasons for the recovery of textile and apparel exports? Can the recovery momentum be sustained?
1 Overseas epidemic accelerates the return of orders
“Our orders on hand have been scheduled until November, and we are looking for ways to expand production capacity every day.” Jin Zhijiang, chairman of Jiangsu Cathay Huasheng Industrial Co., Ltd., clearly feels the warmth of the textile and apparel export market. Since March this year, he has visited Henan, Anhui, Shandong and other places many times to look for factory cooperation to expand production capacity and strive to receive more orders.
Many textile and clothing foreign trade companies also have the same feeling. Children’s autumn and winter cotton and feather jackets launched by SUMEC’s subsidiaries were sold out in just two weeks after being put on the official store of the American clothing brand Skechers. It is understood that the company only started cooperation with Skechers in May this year, and so far, the cumulative order volume has exceeded 20 million yuan.
According to customs statistics, from January to August, China’s exports of clothing and clothing accessories totaled 684.09 billion yuan, accounting for approximately 1% of the total exports of labor-intensive products during the same period. 28%, the year-on-year growth rate is also 7.9 percentage points higher than that of labor-intensive products in the same period.
You must know that a few years ago, textile and garment foreign trade companies had to face challenges brought by rising comprehensive production costs, industrial transfers, and loss of orders. Nowadays, , the situation reversed, and a large number of orders came one after another. The reason is that industry insiders believe that on the one hand, China’s export advantage of textile and apparel products still exists, and as foreign trade companies strengthen R&D, design, transformation and upgrading, their international competitiveness has further improved.
On the other hand, China controlled the COVID-19 epidemic earlier and better, and the industrial chain has basically recovered. In contrast, the epidemic continues to spread in Southeast Asia and other places, and the ability to fulfill orders is not optimistic. This has caused European, American, Japanese and Southeast Asian purchasers to transfer orders directly or indirectly to Chinese companies, and the return of orders has become an important factor in promoting the recovery of China’s textile and apparel industry.
This analysis can be supported by data. Taking India and the United States as examples, data released by the China Chamber of Commerce for Import and Export of Textiles shows that in the first half of this year, among Indian silk product imports, silk and other raw materials fell by 10.41% year-on-year, while finished products increased by 19.32% year-on-year. The import value of silk products 46.08% are from China. According to statistics from the U.S. Department of Commerce, from January to July, the United States imported $757 million in silk products from China, a year-on-year increase of 14.88%, accounting for 30.76% of global imports.
2 Sustainable development cannot rely solely on “reshoring”
It is worth noting that from the perspective of customs statistics, China’s cumulative export volume of clothing and clothing accessories has gradually declined year-on-year growth. In the first four months of this year, the year-on-year growth rate was 40.7%. The top 5, top 6, and top 7 The monthly growth rate was 31.1%, 29.7%, and 22.5%, respectively, and in the first eight months it had dropped to 17.9%, with the growth rate falling by more than half.
In this regard, the Industry Department of the China National Garment Association believes that due to the continued evolution of foreign epidemics, sporadic epidemics and floods in some areas of the country, and the low base effect, the effect has gradually subsided. The growth rate of various indicators has slowed down significantly. At the same time, factors such as intensified market competition, continued high factor prices, rising logistics freight rates, and fluctuations in the RMB exchange rate have continued to squeeze the profit margins of textile and apparel foreign trade companies. The external situation facing the apparel industry is still not optimistic.
Zhuochuang Information analysis believes that global inflationary pressure is relatively high, the Federal Reserve is expected to raise interest rates, and the development of the epidemic is still uncertain. Textile and apparel foreign trade companies are generally cautious in accepting orders, and are cautious about In the later stage, the export situation generally adopts a wait-and-see attitude, and raw materials are mostly harvested as they are used. It can be seen that the textile and apparel export market is still full of variables.
At the same time, it should also be noted that masks and other anti-epidemic materials have been included in textile statistics before. As the storage of foreign masks increases, market demand begins to decline, which will also inhibit the growth of textile products. Rapid rise. According to statistics from the General Administration of Customs, from January to August, China exported 600.83 billion yuan of textiles, including masks, a year-on-year decrease of 18.4%.
Kong Desheng, general manager of Nanda Fashion Knitting Co., Ltd., said that the company’s output increased by 25% compared with the same period last year. With the expansion of production capacity, the output of goods continues to increase, and the problems are also increasing. . “The cost of shipping has formed a transmission mechanism from shipping companies to customers to foreign trade companies. The freight rate has increased from a few thousand US dollars per container to more than 10,000 US dollars per container now. At the same time, the unit price of this year’s products is generally low, with each order The profit margin of the goods being compressed is about 10%.”
Simply relying on the return of orders cannot drive the sustainable development of textile and apparel exports, and the prospect is full of uncertainties and risks. Industry insiders believe that companies cannot blindly expand production capacity for low value-added orders because these orders are obviously temporary. Textile companies need to strengthen R&D and design, take advantage of the upsurge of order reshoring to accelerate the cultivation and conversion of new customers, and form a more stable and lasting cooperative relationship. </p
