New Pattern And New Kinetic Energy -- 2019 China'S Textile And Apparel Trade Situation

In March 11th, the China Textile Import and export chamber held the 2019 seventh "International Forum on China and Asia textiles" in Shanghai.

At the meeting, the chairman of the textile chamber of Commerce Cao Jiachang gave a brilliant speech on the situation of China's textile and clothing trade this year.

This is excerpt from the colleagues of textile and garment industry.

General situation of China's textile and garment trade in 2018

In 2018, under the complicated international environment, China's foreign trade is running smoothly and steadily.

The total value of foreign trade and import and export in the whole year was 4 trillion and 620 billion US dollars, an increase of 12.6%, of which, exports were US $2 trillion and 480 billion, an increase of 9.9%; and imports of US $2 trillion and 140 billion, an increase of 15.8%.

At the same time, China's textile and garment trade has also achieved steady growth for two consecutive years.

In 2018, the export of textile and clothing was 276 billion 730 million US dollars, an increase of 3.7% over the same period, and imports of US $26 billion 140 million, an increase of 6.4% over the same period last year.

The following characteristics are as follows:

First, the competitive advantage of upstream products exports gradually emerged.

In 2018, China's textile exports amounted to $119 billion 100 million, an increase of 8.1% over the same period last year, and clothing exports were 157 billion 630 million US dollars, up 0.3% from the same period last year.

The export growth of upstream products and the slowdown of downstream products exports are all the result of the shift of China's garment manufacturing industry, and the demand for Chinese yarn and fabrics due to the incomplete industrial chain in the peripheral low-cost garment producing countries.

In 2018, I exported 19.3% and 21.5% of yarn and fabric exports to Vietnam and Bangladesh respectively.

The two is to maintain growth in the traditional market and the whole market.

In 2018, China's textile and apparel exports to the three traditional markets of the European Union, the United States and Japan maintained an increase of 1.5%, 8% and 2.7% respectively.

In addition, the exports of the countries along the "one belt and one way" maintained growth for three consecutive years, an increase of 5.3% in 2018, an increase of 11.7% in ASEAN exports and the fastest growth in major markets.

Three, the vitality of private enterprises has been gradually enhanced.

In 2018, private enterprises were active and export grew by 5.1%, accounting for 68.3% of the total export volume, effectively stimulating the overall export growth of the whole year.

Four, tariff reduction led to faster growth in clothing imports.

In recent years, countries have repeatedly lowered tariffs on imported goods, coupled with the continuous development of consumption potential in the domestic market, and the increase in clothing imports has been relatively high.

In 2018, China's textile imports increased by 3%, clothing imports increased by 14.8%, and the overall import and export of textile and clothing maintained a relatively fast growth.

Five, China's share of the world's major market share has declined slightly.

According to statistics from the world trade organization, China's textile and garment exports accounted for 35.8% of the total international market share since 2015, reaching a peak of 38.5%. In 2017, the share of the world's textile industry dropped to 35.8%, of which the share of textile trade was 37.1%, and the share of clothing dropped from 39.3% in 2015 to 34.9% in 2017.

Last year, my share of textile and clothing products in the US import market was 36%, 0.3 percentage points lower than that in 2017, while Vietnam's share was 10.5%, an increase of 0.1 percentage points over the same period last year. Last year, I accounted for 33% of the EU's import market share, 1 percentage points lower than the same period last year, while Bangladesh's share was 14.3%, an increase of 0.6 percentage points over the same period last year.

In 2018, China's market share in Canada and Australia was 35.5% and 60.2% respectively, maintaining a steady trend compared with the previous year.

The development of the industry is still facing many difficulties.

First, the current Sino US economic and trade frictions will have a profound impact on the future development of the industry.

At present, the US has already taxed about 7 billion dollars of textile and clothing products, accounting for 16% of the total export volume of textile and clothing, and about 1.7 export enterprises.

Although the US tax has limited short-term impact on my textile and apparel industry, and because of the "grab the export" factor, I maintained a relatively rapid growth in exports to the US last year, but the uncertainty brought about by the Sino US economic and trade frictions has forced American buyers to make substantial adjustments to the procurement strategy and supply chain layout.

This is especially true for long and long dated orders with low delivery speed.

For fast fashion orders requiring higher delivery speed, it is also difficult to pfer overseas in the short term because of the high demand for supply chain efficiency and resource integration level.

At present, bilateral negotiations between China and the United States are in full swing, showing positive signals. We sincerely hope that Sino US economic and trade frictions can be successfully resolved and create a stable and predictable international trade environment for foreign trade enterprises.

Two, in addition to Sino US economic and trade frictions, China's textile and garment industry is also facing other trade remedy cases.

In 2018, my textile and garment industry met 14 trade remedy cases, of which 11 were newly established cases, involving 7 countries, including Mexico, India, Argentina, Turkey, Egypt, Madagascar and the United States, involving polyester staple, flax yarn polyester, denim, polyester processing yarn and so on, and 3 Sunset Reviews.

The total amount involved in the 14 cases was about $260 million.

Although the amount is not large, but also to the main business of these products and market brings great difficulties.

Three, there is a strong correlation between the RMB exchange rate volatility and our exports.

In the first quarter of 2018, the trend of RMB exchange rate showed a rapid appreciation and a big shock, which caused many troubles to export enterprises.

Some enterprises say that the adverse effect of the fluctuation of exchange rate is no less than the economic and trade frictions between China and the United States.

Recently, the governor of the people's Bank of China said at a press conference that the exchange rate should not be used for competitive purposes without competitive devaluation. This indicates that the fluctuation of exchange rate will become the norm in the future. It will raise higher requirements for our export enterprises to strengthen the use of various tools to avoid exchange rate risk in the future.

Four, the problem of labor shortage and rising costs still exists.

The 2018 national economic and Social Development Statistics Bulletin released by the National Bureau of statistics in February 28th showed that the working age population of 16 to 59 years old was 897 million at the end of 2018, which was 4 million 700 thousand lower than that at the end of 2017, the first time it fell below the 900 million population threshold. The proportion of working age population in the total population was 64.3%, lower than 0.6 percentage points in 2017.

In 2018, 16 provinces and municipalities raised the minimum wage standard, an average increase of 7%.

Environmental pressure is also rising.

According to the Research Institute, if the cost of raw material procurement, labor costs, tariff preferences and income tax preferences are taken into consideration, the net profit margin of most textile and garment exporting enterprises in their Southeast Asian factories is 5 to 6 percentage points higher than that in China.

Therefore, regardless of the outcome of Sino US economic and trade frictions, enterprises will be prepared for both hands and domestic and foreign factories at the same time to cope with the new global economic and trade situation.

Actively respond to Sino US economic and trade frictions

Since last year, the textile chamber of Commerce has actively guided enterprises to cope with the aggravation of trade friction.

First, I will take an active part in the legal investigation procedure of the "301" clause, and send a working group to actively participate in the US hearing and make comments to voice the Chinese industry.

The two is to guide enterprises to expedite export speed, avoid tax risks and minimize losses as far as possible.

Three, we should increase international cooperation and layout of production capacity, take the initiative to make use of other countries' resources to make production, and China's orders are global in production, so as to strengthen control over the supply chain.

Four, we should speed up the process of pformation and upgrading, increase investment in equipment and technology, improve production efficiency, product quality and market reaction speed, improve product added value, enhance design and research capabilities, resource integration capabilities, supply chain management capabilities, international marketing network development capabilities and brand building capabilities.

From cost competition to value competition.

Five, we should further implement the strategy of market diversification and intensify our efforts to expand the market of emerging markets, especially the "one belt and one road" market, and increase the cultivation of domestic demand market so as to avoid single market risks.

In order to cope with Sino US economic and trade frictions, the textile chamber of Commerce has been actively helping enterprises develop diversified markets abroad. Currently, there are six self holding exhibitions, including three textile and apparel procurement exhibitions, which are held in Toronto, Miami and Berlin. Besides, they also hold textile exhibitions in Australia and Burma, and plan to add Manila exhibition.

These measures are not the expedient measures to deal with Sino US economic and trade frictions, but reflect the long-term strategy of the industry's hard work and pformation and upgrading.