Since the beginning of this year, due to the spread of the epidemic at multiple points, rising raw material costs, sluggish demand, restricted cotton in Xinjiang, and the characteristics of the industry itself, the development of the textile and apparel industry has been facing tremendous pressure. However, according to the latest export data released by the General Administration of Customs, from January to July this year, the country’s textile and apparel exports were US$189.35 billion, a year-on-year increase of 12.4% (a year-on-year increase of 12.7% in RMB), and the growth rate increased by 0.7 percentage points compared with the first half of the year. Among them, textile exports were US$89.80 billion, a year-on-year increase of 11.9% (the same year-on-year growth rate in RMB); clothing exports were US$99.56 billion, a year-on-year increase of 12.9% (a year-on-year increase of 13.5% in RMB). In the month of July, my country’s textile and apparel exports to the world were US$33.22 billion, a year-on-year increase of 17.6% (a year-on-year increase of 23.6% in RMB) and a month-on-month increase of 5.31%. The month-on-month growth trend remained unchanged, and the export volume in July was the highest in recent years. Value, the overall performance is better than expected, which is different from the actual experience of receiving orders in the downstream market. Why is there a mismatch between the actual downstream experience and the customs data?
Zhejiang’s exports have fully exceeded pre-epidemic levels
We can also feel the boom in textile and clothing exports from the data of Zhejiang, a major textile and clothing export province. Except for the impact of the Spring Festival in February this year, Zhejiang Province’s textile and apparel exports have maintained double-digit growth for eight consecutive months year-on-year. The export scale has continued to expand since March this year. In June, the province’s textile and clothing exports were 59.51 billion yuan, an increase of 20.2%, of which textile exports were 33.94 billion yuan, an increase of 11.7%, and clothing exports were 25.57 billion yuan, an increase of 33.5%. Compared with the same period in 2019, the province’s textile and clothing exports increased by 28.9% in the first half of the year, of which textiles increased by 33.0% and clothing increased by 22.3%. In the first half of this year, Zhejiang Province’s textile and clothing exports ranked first in the country, accounting for 28.7% of the country’s total textile and clothing exports, a share that increased 2.5 percentage points from the same period last year; its contribution to the growth of national textile and clothing exports was as high as 51.0%, ranking first in the country. First place in every province and city.
RMB depreciation and industrial chain recovery
The fact that exports can still maintain strong growth has a lot to do with the depreciation of the RMB. From the perspective of the RMB exchange rate, the average exchange rate of my country’s exports (USD to RMB) in July was 6.74, which was a further depreciation of about 1.1% compared with June. The RMB exchange rate depreciated by 6% from May to July this year, which is one of the important factors supporting the high export growth rate.
At the same time, overseas prices have skyrocketed, while domestic raw materials have seen relatively low growth rates. Whether it is cotton or chemical fiber, both have certain price advantages. After June, the domestic epidemic situation continued to improve, supply chains and logistics recovered, and the resumption of work and production in Shanghai and other places accelerated. At the same time, some Southeast Asian countries Still facing strikes and rising electricity bills, my country’s export advantages and resilience still exist.
Overall, my country’s textile and clothing exports performed better than expected in July year-on-year. On July 26, the IMF lowered its global economic growth forecast for the third time this year, and concerns that the U.S. and European economies will enter recession continue. In the context of the slowdown in demand for overseas commodities, coupled with the obvious drop in raw material prices from high levels, the unit price of exports will decline to a certain extent, and the year-on-year growth rate of my country’s exports may tend to slow down in the next few months.
At the same time, constraints on global industrial production, international trade and market liquidity have become more prominent, creating lasting constraints on the recovery of market consumption capacity and the improvement of residents’ consumer confidence. With the gradual recovery of overseas textile supply chains, the international procurement pattern will also accelerate adjustment. my country’s textile industry will face intensified competition and export pressure will increase significantly.
A number of policies to support foreign trade enterprises have been implemented
At a special press conference held by the Ministry of Commerce on July 29, Zhang Bin, deputy director of the Department of Foreign Trade, said that currently, foreign trade development faces high risks, difficulties, and uncertainties. Many relevant officials said that in the second half of the year, in terms of stabilizing foreign trade, the Ministry of Commerce will focus on three major areas: expanding volume, stabilizing stock, and strengthening guarantees, and actively promote exports and expand imports.
All regions are actively introducing corresponding policies and measures to stabilize foreign trade. The person in charge of a textile foreign trade company in Shandong said that the local town government organized a series of courses, mainly around live broadcast training, to guide factories to participate in the live broadcast of a professional online platform for fabric trading. Many customers come from overseas. He originally didn’t think that the gray fabric business could also be used for live streaming, but he found that the effect was pretty good.
Policies to stabilize foreign trade are being continuously implemented in various places. For example, Jiangsu Province recently proposed 12 specific measures to help foreign trade companies grab orders, expand markets, and stabilize the foreign trade industrial chain and supply chain. For example, it supports companies to participate in 50 overseas international exhibitions in various ways; organize No less than 100 trade promotion activities for countries along the “Belt and Road”; implementation of cross-border e-commerce export tax rebate-related measures, etc.
Shandong Province took the lead in the country in launching the “Exchange Rate Hedging Guarantee Pilot” policy. By establishing a “government + bank + guarantee” operating model, financing guarantee institutions are encouraged to provide guarantee services for small, medium and micro foreign trade enterprises to provide exchange rate hedging services.
Participating in exhibitions is one of the main ways for textile and garment companies to expand markets. Affected by the epidemic, it has been difficult for manufacturers to participate in overseas exhibitions. Ningbo City launched the country’s first charter flight for foreign trade market expansion. On July 10, 36 representatives of Ningbo’s foreign trade companies used charter flights. , went to Budapest, Hungary to visit customers and look for orders.
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