In U.S. dollar terms, in May, my country’s export growth rebounded by 13 percentage points year-on-year compared with April, far exceeding the market consensus of 8% year-on-year growth. In the first five months, my country’s exports increased by 13.5% year-on-year, achieving a high double-digit growth rate.
National textile and apparel exports in May were better than expected, with a year-on-year growth of 20.4%
According to statistics from the General Administration of Customs, from January to May this year, the country’s textile and apparel exports were US$125.07 billion, a year-on-year increase of 11.2% (a year-on-year increase of 9.1% in RMB). Among them, textile exports were US$62.85 billion, a year-on-year increase of 12.1% (a year-on-year increase of 10% in RMB); clothing exports were US$62.22 billion, a year-on-year increase of 10.2% (a year-on-year increase of 8.1% in RMB).
Figure 1. National textile and clothing export monthly statistics from 2021 to 2022 (amount: 100 million U.S. dollars)
Thanks to the implementation of a package of policies to stabilize the economy and foreign trade introduced by the country since the end of April, as well as the improvement of the domestic epidemic situation, the national logistics transportation and supply chain have been well repaired, and my country’s textile and apparel exports performed better than expected in May.
In May, the country’s textile and apparel exports totaled US$29.23 billion, a year-on-year increase of 20.4% (a year-on-year increase of 18.6% in RMB) and a month-on-month increase of 23.9%. Among them, textile exports were US$14.03 billion, a year-on-year increase of 15.8% (a year-on-year increase of 14% in RMB) and a month-on-month increase of 14.4%. Clothing exports amounted to US$15.2 billion, a year-on-year increase of 24.9% (a year-on-year increase of 23.1% in RMB), and a month-on-month increase of 34.2%.
Figure 2. Comparison of national export growth rates of goods, textiles, and clothing from 2021 to 2022 (Unit: %)
Since the beginning of this year, my country’s import and export trade has achieved steady growth, and the foundation for maintaining stability and improving the quality of foreign trade has continued to be consolidated. In May, the country’s exports of goods increased by 16.9% year-on-year, and the growth rate of clothing exceeded the national average level of exports of goods by 8 percentage points. On May 25, the State Council held a national video and telephone conference on stabilizing the economy, requiring that stabilizing growth be given a more prominent position, efforts should be made to protect market players, employment and people’s livelihood, and China’s economic resilience. On June 8, the National Standing Committee deployed measures to further stabilize foreign trade and foreign investment and improve the level of opening up to the outside world. The meeting pointed out that while implementing the policies that have been introduced to stabilize foreign trade and foreign investment, we must further increase support to promote the stability and improvement of foreign trade. The implementation of relevant domestic policies will provide favorable support for the development of foreign trade in the industry.
Looking to the international front, the foreign trade situation faced by the industry is still complex and severe. Since April, the United Nations, World Trade Organization (WTO), and IMF have all lowered their growth expectations for global economic and trade in 2022. At the same time, the textile supply chain of Southeast Asian and South Asian countries has continued to recover since this year, and exports to markets such as the United States and Europe have grown rapidly. It is expected that in the second half of the year, our industry’s export trade will still face greater competitive pressure and unstable factors.
The situation is improving, and lost orders are coming back one after another.
Imports and exports in the Yangtze River Delta have recovered significantly
Li Kuiwen, director of the Statistical Analysis Department of the General Administration of Customs, said that my country’s foreign trade imports and exports have achieved steady growth in the first five months, and the foundation for maintaining stability and improving the quality of foreign trade throughout the year has been further consolidated. Especially in May, the import and export of the Yangtze River Delta region increased by nearly 20% month-on-month, and the import and export of Shanghai and other related areas recovered significantly.
Freight supervision data released by the General Administration of Customs on the same day showed that export freight volume in May was 160.503 million tons, which was also an increase from 145.865 million tons in April.
Restorative growth after resumption of work and production
“With the steady progress of resumption of work and production, enterprise production has accelerated, and previously accumulated goods have accelerated exports.” Regarding the rebound in export growth in May, Hongta Securities macro analyst Yin Yue analyzed. Yin Yue believes that the reason for the unsatisfactory data performance in April is mainly that under the impact of the epidemic, the production of some export companies has stagnated and orders are backlogged; goods are difficult to ship out and inventory passively accumulates. Since the second half of May, as production and living order has steadily returned to normal, the original backlog of orders has begun to be processed, and export companies have also accelerated the production of orders on hand. Under such circumstances, exports showed a restorative growth trend in May.
Logistics and supply chain repair
Data released by the China Ports and Ports Association show that in May, the foreign trade container throughput of the eight major coastal container hub ports increased by 7.4% year-on-year, with the foreign trade container throughput of Shanghai Port returning to 90% of the same period last year.
Zheng Houcheng, director of the Yingda Securities Research Institute, explained that logistics and industrial and supply chains were relatively well restored in May. Therefore, from a supply perspective, the unfavorable factors that restricted the year-on-year decline in April’s export volume were greatly alleviated, promoting the The export value in May increased significantly year-on-year.
Strong overseas demand
Strong overseas demand is also seen as an important reason for the rapid recovery of my country’s export growth in May. Data show that in May, my country’s exports to the United States and the European Union accounted for 16.9% and 15.6% respectively, and the demand in the European and American markets remains strong. “Take the United States as an example. Currently, the inventory-to-sales ratio of American retailers and wholesalers is still low.The year-on-year growth rate of consumer spending on non-durable goods in April remained at a high level. This also means that demand in the United States is still relatively strong. “Yin Yue said that currently overseas economies are still in the process of peaking post-epidemic growth, which will drive my country’s exports of intermediate goods.
Lost orders are coming back one after another
In the opinion of experts, the reversal in export data shows that the substitutability of my country’s export products is weak. “The market attaches great importance to May’s foreign trade data, because it can tell whether the impact of the epidemic on foreign trade is a trend or temporary.” Bai Ming, deputy director of the International Market Research Institute of the Ministry of Commerce Research Institute, said that from the published data Look, the foreign trade situation improved significantly in May, which shows that the decline in export growth in April was mainly affected by unexpected factors such as the epidemic, and the impact was mainly staged and repairable.
Bai Ming, director of the Research Institute of the Ministry of Commerce of China, believes that my country’s production capacity and product competitiveness in supplying the international market are good, and the international market has relatively recognized my country’s foreign trade transformation and upgrading in recent years. Therefore, when short-term supply is affected, foreign companies have not Will not switch suppliers easily. After the epidemic eased, companies quickly resumed work and production and rushed production, which naturally led to a “retaliatory rebound.”
Some companies said that the current domestic epidemic situation is basically stable, and the country has introduced a series of policies to stabilize foreign trade. Some orders that were previously lost are now coming back one after another. The reshoring of orders also benefits from the strong competitive advantages of domestic product quality and price in the international market. He admitted that due to the impact of the epidemic, some orders were transferred to surrounding countries and regions. However, after some comparisons by customers, domestic products were superior in quality and price. Therefore, some previously lost orders gradually returned after the domestic epidemic stabilized.
Will continue to rebound in June and July
Huo Jianguo, vice president of the China World Trade Organization Research Association, believes that my country’s foreign trade export potential has not yet been fully released, and there is room for further recovery. Judging from current trends, foreign trade will continue to rebound in the next six and seven months.
Iris Pang, chief economist for Greater China at ING Bank, also analyzed that China’s trade data in May was better than expected. “The rebound mainly comes from the reopening of port facilities, and we believe the May data is a continuation of March’s 14.7% year-on-year export growth.” Peng Airao said, “If global demand continues to be as strong as it has been since 2021, China’s exports should remain Average annual growth rate of 15% until at least the third quarter of 2022.”
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