China's textile and garment export volume and price will face four major constraints

After China's textile and garment exports have been difficult to go through 2015, it will face a more serious situation in 2016. Global economic and trade growth is sluggish, overseas market demand is declining, and domestic labor costs continue to rise. While dealing with more external competition, trade protectionism violations in some countries have become more prominent. How to find opportunities and incentives in the face of unprecedented pressure and difficulties? , is the urgent demand of the textile and garment industry.

At the “Going Global” Summit of China's textile and garment enterprises hosted by the China Textile Import & Export Chamber of Commerce and Shanghai Xiwei Company and the 2016 China and Asia Textile International Forum held in Shanghai, China, the United States, the European Union, Vietnam, Cambodia, and Myanmar In the more than 20 countries and regions such as Pakistan, India and other regions, the elites in the fields of textile and apparel R&D, production, trade, and retail are gathered together. The focus of the employment community is to share their perspectives and experiences.

According to customs data, China's textile and clothing exports showed a double price drop in 2015, and the data for January to February 2016 are still not optimistic. In 2015, China’s textile and apparel exports totaled US$283.89 billion, a year-on-year decrease of 4.9%. At the same time, export volume declined slightly by 1.2%, and the average export price dropped by 3.7%. From January to February of this year, there was no obvious improvement in the export situation. In the short term, it continued the downward trend of last year. The export value was 39.79 billion U.S. dollars, a decrease of 15.7%. The overall export situation throughout the year is not optimistic.

In addition to the dimming of overall export data, the performance of market segments is also difficult to see. In the three major traditional export markets of the United States, Europe, and Japan, growth is maintained only in the United States. In other emerging markets, only steady growth has been maintained in the African and Middle Eastern markets.

Specifically, in 2015, China’s textile and apparel exports to the United States maintained a growth rate of 6.6%, and exports to the EU and Japan markets declined by 13.7% and 11.7% respectively. From the perspective of the intercontinental market, China’s exports to Africa and the Middle East have maintained steady growth of 5.2% and 4.6% respectively. In other major export markets, exports to the ASEAN market have changed rapidly over the past two years, a slight drop of 0.8%; exports to Russia have declined significantly, falling by 32.6%.

According to Changhui Analysis of the China Textile Import & Export Chamber of Commerce, the export trend of China's textile and clothing industry is greatly affected by the economic development of the destination market. In 2015, the steady growth of China's textile and apparel exports to the United States was mainly due to the steady recovery of the US economy. Clothing retail performance is strong, and the decline in other markets is also mainly related to the economic downturn in the market and currency devaluation. For example, the decline in exports to the EU was mainly due to the sharp depreciation of the Euro against the Renminbi in 2015; the reasons for the continued decline in Japanese exports include the economic downturn in Japan and the sluggish retail market caused by the increase in consumption tax, and the continuous depreciation of the Japanese yen against the Renminbi. Japanese importers continued to shift their procurement focus to ASEAN countries; the sharp decline in Russian exports was mainly due to the sharp fluctuations in Russia’s economy in the second half of last year due to European and US economic sanctions, the drastic decline in the ruble, and the decline in the reputation of some customers and the inconvenience of customs clearance, etc. Constrained by factors.

New challenges under the new normal

In 2016, China's textile and garment exports will face more complicated and severe foreign trade development. Jiang Hui emphasized that China's textile and garment exports will face four major constraints.

First, the growth in international market demand is weak. The report released by the United Nations reduced the forecast for world economic growth in 2016 from 2. 3% at the beginning of the year to 2.9%.

Second, the traditional competitive advantage of China's textile and apparel exports is declining. Since 2009, China’s labor costs have increased by an average of over 10% annually. The cost of labor in the coastal areas has approached the level of Eastern European countries and is 3 to 5 times that of neighboring countries such as Myanmar.

Thirdly, the outward shift of industries and orders has accelerated, and the transfer areas have expanded from Southeast Asian countries to more developed regions such as Latin America and Africa, and even to advanced economies such as Eastern Europe and the United States in the traditional sense of “gradient transfer”.

Fourth, exports lack effective support and growth points. According to data predicted by industry associations and enterprises, in 2016, 37 industries such as textiles may face zero growth or negative growth.

In addition, the rise of international trade protectionism cannot be underestimated. In 2015, trade protectionism in India, Argentina, Peru, Brazil, etc., was more prominent in the export products of China's textile and clothing products. Trade protectionism in Pakistan, the European Union, Indonesia, Turkey, Colombia, and Egypt also increased. . In 2016, we must attach great importance to and respond to this trend of protectionism.

In addition to the pressure on exports of textiles and garments, imports also face considerable resistance. Jiang Hui said that at present, China's textile and apparel import growth depends mainly on domestic fixed asset investment, production supporting demand, and processing trade-led import demand, and is subject to large commodity prices. In 2015, the increase in domestic fixed asset investment decreased year-on-year, and nearly 80% of manufacturing investment growth fell. It is expected that commodity prices will remain low in 2016 and domestic demand will remain weak. Although some products have reduced import tariffs, they lack growth drivers. It is less likely that imports will rebound strongly.

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