2021 marks the 20th anniversary of China’s accession to the WTO. Over the past 20 years, China’s textile and apparel trade has experienced a process from extensive and rapid growth to rational growth. The average annual growth rate of trade volume is 8.7%, of which export volume has more than quadrupled from US$50 billion to more than US$300 billion, with an average annual growth rate of 9.5%, and imports have doubled, with an average annual growth rate of 3.7%.
Data source: Compiled based on China Customs data
The period of fastest export growth was mainly concentrated in the first five years after joining the WTO and the two years after the US subprime crisis. The average annual growth rate exceeded or was close to 20%. After that, it entered a rational growth range, especially during the “13th Five-Year Plan” period. Overall growth slowed to less than 1%. The foreign trade pattern has gradually evolved from traditional methods to new foreign trade situations, and the export market structure has been further diversified. New trade models and platforms such as cross-border e-commerce and market procurement are developing rapidly, providing more choices and opportunities for foreign trade companies. The number of export markets worth tens of millions of dollars or more has expanded from 115 countries and regions at the beginning of China’s accession to the WTO to 164. Countries and regions along the “Belt and Road” have become emerging markets with great potential. The new and old driving forces of foreign trade are accelerating the transformation, from focusing solely on quantitative growth to focusing on qualitative improvement. At the beginning of China’s accession to the WTO, export commodities were mainly low value-added clothing processing, with clothing exports accounting for 68%. In the first year of the “14th Five-Year Plan”, the export proportion of intermediate products and industrial textiles increased to 46%, and the gap with the proportion of clothing was rapidly narrowed. The textile industry has given top priority to high-quality development factors such as quality and efficiency improvement, innovation-driven, energy conservation and emission reduction, and social responsibility construction. Enterprises strive to be individual champions in the manufacturing industry. A large number of outstanding enterprises with unique characteristics have emerged across the country, and a number of outstanding enterprises have emerged across the country. Hundreds of industrial clusters centered on superior products and with complete upstream and downstream supporting facilities have been established. Strengthen cooperation consensus with neighboring countries, actively “go out” layout, and basically form an industrial coordination area between China and ASEAN with China as the core. Fully optimize resource allocation to drive exports of intermediate and final consumer goods from neighboring countries and my country to achieve common development. There is sufficient endogenous driving force for the development of China’s textile and apparel industry and foreign trade.
Today, the external trade environment we face has changed significantly. The golden period of international trade growth has basically ended. Globalization has entered the “second half”. Systemic risks have increased significantly. The trend of reverse globalization and the epidemic that has not yet ended have brought troubles to the global economy and trade. It is expected that the next 5 to 10 years will be a period of accelerated reconstruction amid major changes unseen in a century, and a critical period of turmoil in the global political and economic fields. The uncertainty of various factors intertwined with the epidemic has posed new challenges to industry operators and foreign traders. As far as the textile and apparel industry is concerned, it has adapted to the pace of global economic integration and wider opening up over the years. The coordination of the global industrial chain and supply chain has become a prerequisite for ensuring the stable development of the textile and apparel industry. Enterprises can also face the expansion of industry relocation. , actively participate in and accept lean production, and advocate inventory reduction. Under this development model, the industry has been able to maintain good and smooth operation for many years. However, the continued fermentation of the epidemic has gradually revealed the underlying crisis that has been ignored: once the industrial chain and supply chain are broken, it will cause a series of domino effects, posing a threat to the seemingly stable industrial structure. The U.S.’s legislative suppression of Xinjiang cotton, measures to limit production and electricity during the year, soaring raw material prices, global logistics obstruction, and soaring freight costs have caused unprecedented difficulties for production and export in 2021. On the one hand, the influx of orders has reduced production capacity Insufficient; on the other hand, the supply chain is forced to interrupt, the upstream lacks raw materials, the midstream production lacks power and manpower, and the downstream delivery logistics is blocked, resulting in even tighter capital flows, and corporate profits are meager or even unprofitable.
Facing the unknown future, the government and industry organizations have the responsibility to help companies seize the opportunities during and after the epidemic, accelerate the adjustment of strategic thinking, improve foreign trade pricing power and voice; diversify supply channels and appropriately disperse the geographical distribution of suppliers. , reduce dependence on a single source; accelerate the layout of international and domestic dual cycle construction, further expand the external market; improve the quality of research and the speed of information release at both ends of the supply chain, assist companies in timely adjustment of inventory scale and shipping time, and strive to be in the era of major changes The times have led enterprises to break through bottlenecks and take advantage of the new competition track after the epidemic.
annual analysis
Overcoming multiple disadvantages, exports hit new highs throughout the year
Overview analysis of my country’s textile and apparel foreign trade in 2021
In 2021, the unstable and uncertain global political and economic situation caused by the COVID-19 epidemic will be further highlighted. my country’s foreign trade environment will become more turbulent under the combined effect of the epidemic and multiple factors. The global industrial chain and supply chain will be exposed under the impact of the epidemic. Vulnerability. Unfavorable factors such as shortages of raw materials and electricity, sharp increases in production materials and shipping freight prices, and appreciation of the RMB are intertwined, posing a huge challenge to my country’s textile and apparel exports. With the support and encouragement of the country’s active and effective prevention and control measures and policies to stabilize the economy and exports, the textile and apparel industry has overcome many difficulties, strengthened the upstream and downstream coordination of the industrial chain and supply chain, and seized the rare opportunity for overseas orders to explode and orders to return. , achieving export growth beyond expectationsAt the same time, due to the loose liquidity of the US dollar and the overall price increase of international commodities, the prices of domestic procurement and imported raw materials have remained high, and this has been further transmitted to the downstream, resulting in a rare price increase across the entire industry chain. In terms of domestic procurement, the purchase price index for textile raw materials turned from negative to positive at the beginning of the year, increasing month by month, with a cumulative increase of 5% throughout the year. In terms of imports, the price of cotton, the main raw material, continued to run at a high level, with the cumulative import unit price rising by 16.4%, and the price of chemical fiber rising by 6.5%. The export prices of yarn, fabrics, and woven garments increased by 22.4%, 11.5%, and 11.2% respectively, and the price increase of downstream end products was even lower, indicating that garment production and export enterprises have borne more cost burdens, and profits have been squeezed. The pressure on production and operation is the most prominent.
The phenomenon of order reshoring is unsustainable
When the epidemic broke out in 2020, with the support of China’s strong industrial and supply chains, major developed countries’ imports from China surged. That year, the share of Chinese products in the EU, US and Japanese markets all rebounded significantly, temporarily suspending the year-over-year growth before the epidemic. declining situation. In 2021, as the epidemic normalizes, the procurement model of developed countries will once again return to “China + Vietnam + other Asian low-cost countries”. The share of ASEAN and other places has rebounded from last year. In particular, Bangladesh’s share of clothing imports from the United States and Japan has reached a record high new highs. The share of Chinese products fell back that year compared with last year, but its market share in the EU and Japan was still higher than the level in 2019 before the epidemic. According to Eurostat statistics, China’s textile and apparel market share in the EU market in 2021 will be 33.7%. According to statistics from the Japanese Ministry of Finance, the share of the Japanese market in 2021 was 56.8%, down 8.7 and 1.9 percentage points respectively from 2020, but both were slightly higher than in 2019. According to statistics from the U.S. Department of Commerce, our products accounted for 30.4% of the U.S. market in 2021, a decrease of 8.3 and 2.3 percentage points respectively compared with the same periods in 2020 and 2019. As the resumption of work and production in Southeast Asia and other places accelerates, orders are once again “flowing out” from the country, and the market share of Chinese products in developed countries will continue to show a slow downward trend.
The leading role of the eastern provinces is highlighted
In 2021, the top five provinces (autonomous regions and municipalities) in terms of textile and clothing export volume are Zhejiang, Jiangsu, Guangdong, Shandong and Fujian. The total export share of the country has rebounded from 73.7% in 2020 to 75.8%, close to the pre-epidemic level. . The large eastern provinces are still the most important force driving export growth. In terms of geographical regions, the eastern region achieved an overall growth of 9.1%, driving overall export growth by 7.8 percentage points, the western region increased by 29%, and only the central region fell by 2.7%.
Among the 31 provinces (autonomous regions and municipalities) in the country, a total of 21 have achieved growth, accounting for more than 2/3, and 26 have achieved growth on average over the two years, accounting for more than 80%. Although some regions, such as Hubei and Beijing, experienced rapid year-on-year declines due to the rising base last year, the export scale was still higher than the pre-epidemic level, with the two-year average growth rates in the two places still reaching 12% and 8.4% respectively.
Imports overall achieved steady growth
Driven by the recovery of production and exports, the expansion of domestic demand, and the appreciation of the RMB, textile and clothing imports have always shown a steady growth trend throughout the year, achieving a growth of more than 10% in each month, and a cumulative growth of 20.5% throughout the year.
The expansion of finished garment exports drove the total import of textile intermediate yarns and fabrics to increase by 29%. At the same time, due to restrictions on domestic consumers’ overseas travel due to epidemic control, consumer demand for foreign mid-to-high-end clothing and apparel shifted to imported purchases. The import of knitted and woven garments throughout the year The cumulative growth was 29.3%, and the growth rate of fur clothing and clothing accessories was as high as 60% and 43%. The proportion of clothing imports in all imports increased from 40% last year to 43%.
Import growth is also driven by both quantity expansion and price increases. The import volume of yarn and needle-woven clothing increased by 10.5% and 4.6% respectively, and the import volume of fabrics remained the same. The average import price of the three types of products increased by 22.5%, 23.5% and 16.7% respectively. It can be seen that the price-boosting effect is more obvious. .
Cotton imports show volume and price divergence
In 2021, the cumulative cotton imports were 2.147 million tons, a decrease of 0.6%, and the average import price was US$1.92/kg, an increase of 16.4%. From January to October, cotton imports showed a decline in volume and an increase in price, and a divergence between volume and price, which only eased at the end of the year. High cotton prices were the main reason for the decline in imports. Manufacturing companies reduced cotton imports and instead used imported cotton yarn, driving an 11% increase in cotton yarn imports throughout the year. From the perspective of the import market structure, the United States and Brazil are my country’s main sources of cotton imports, accounting for 68.6% of the total import volume. Australia’s share has further declined since being overtaken by India last year, and its import volume ranking has fallen to sixth place, lower than Burkina Faso and Benin.
According to statistics from the China Cotton Association, the country’s total cotton output in 2021/2022 is 5.774 million tons, a year-on-year decrease of 2.5%; imports are expected to be approximately 2.75 million tons; consumption is 8.34 million tons, a year-on-year decrease of 1.02%, and supply and demand are basically balanced. At the end of the year, there were fewer orders from textile companies. Due to high inventories of finished products, some yarn mills reduced production to reduce pressure, resulting in a decline in yarn and cloth output. Due to the high price of new cotton, textile companies did not accept enough and were more cautious in purchasing raw materials. Industrial inventories fell slightly from the previous month.
Data source: Compiled based on China Customs data
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