In early January, the author occasionally had the opportunity to visit Europe and traveled to France, Germany, Italy and other countries, and felt deeply about the weak consumption in the local textile and apparel market. In the famous Galeries Lafayette department store in Paris, the clothing stores occupying five floors and covering more than 70% of the area are sparsely populated. Local citizens shuttle between the malls in twos and threes, looking at more and buying less. Although Florence, Italy, is not as famous for fashion as Milan, there are many clothing stores in the streets and alleys. The “European style” foreign fashions are of high quality and low price. However, local consumption is very deserted.
Behind the lackluster consumption is the severe economic situation. At the beginning of the new year, the global foreign exchange market experienced frequent huge shocks. On January 15, 16 currencies including the US dollar and the euro all plummeted by more than 20% against the Swiss franc. On January 23, the euro against the yuan “broke seven” for the first time. Switzerland announced the decoupling of the Swiss franc from the euro, Europe launched trillions of quantitative easing, and Denmark, Switzerland, India, Peru, Egypt, Turkey, Canada and other countries have cut interest rates… A series of changes in exchange rate and interest rate policies by central banks in various countries have led to a global “currency war” Smoke filled the air. Industry experts believe that the reason why central banks in various countries have cut interest rates one after another is to stimulate the sluggish local economy.
The Eurozone is currently under the shadow of deflation. The author feels the same way during my trip to Europe. The most intuitive feeling is that everything bought with euros is cheaper. Some media analyzed that for more than a year, inflation in the Eurozone has not reached the European Central Bank’s target of “below but close to 2%”. In December 2014, it dropped to -0.2%, the first negative value in five years. The economic growth prospects of the Eurozone are also relatively bleak. In its latest World Economic Outlook quarterly report, the International Monetary Fund lowered its economic growth forecast for the Eurozone in 2015 to 1.2%. In theory, Europe’s QE policy can directly inject funds into the market. Cutting interest rates can not only reduce the cost of economic operation and promote investment, but also make the currency of the country or region weak, which can help promote the country’s exports and stimulate the country’s economic growth.
Recently, the General Administration of Customs of my country released the 2014 import and export data. In 2014, the growth rate of my country’s foreign trade import and export was only 2.3%, which did not reach the expected target of 7.5% at the beginning of the year. The reasons are complicated. In 2014, my country’s economic development had obvious new normal characteristics, and my country’s opening up and foreign trade also showed some new characteristics. At present, my country’s foreign trade is in a period of shifting growth rates and a period of structural transformation, and has entered a medium-to-high-speed growth range from a high-speed growth stage. Europe is one of the three major markets for my country’s textile exports. In view of the official launch of QE in Europe, it has added more uncertainty to my country’s textile exports to Europe. The author believes that in-depth study of changes in the European consumer market, timely adjustment of product varieties facing the European market, and maintaining slow growth will become the new normal for my country’s textile exports to Europe.
