The decline in textile exports may be a foregone conclusion
The decline in my country’s fabric workwear exports in 2016 is a foregone conclusion, unless there will be special counter-cyclical factors in the later period. Accordingly, my country’s fabric workwear exports will experience a rare continuous decline since last year’s decline in more than 20 years.
Compared with the export of fabric products, the export situation of workwear this year is almost bleak. Except for the export data in the second quarter, which is basically flat, the rest of the time has been negative growth. In this regard, He Xiaosi explained that compared with the more technology-intensive and capital-intensive characteristics of the fabric industry since its transformation in recent years, the labor-intensive characteristics of the workwear industry have not changed much.
Breaking down the cost structure of related products, it can be seen that the raw material cost of fabric (gauze) products accounts for 65% to 70% of the total cost, and the raw material cost of workwear products accounts for close to 50% to 60% of the total cost, with low added value. ,The competition of related products is also mainly reflected in ,cost. Therefore, in comparison with a series of advantages in raw materials, labor, and policies in Southeast Asia, China’s comparative advantage in workwear exports is increasingly weakening.
The impact of the G20 Hangzhou Summit is temporary, and its restrictions on my country’s fabric workwear exports will be removed as factories resume production. “In the fourth quarter, the decline in my country’s fabric workwear exports will narrow.” However, He Xiaosi also reminded that the Internet Conference to be held in November also arranged for limited production suspensions in surrounding areas when it was held last year. This year’s conference is scheduled to be held in Wuzhen. , it is more likely that a limited production stoppage will be arranged at that time, which will also have a negative impact on the export of fabric workwear.
The usual “Golden Nine” market caused by Christmas orders did not appear. In September, my country’s fabric workwear exports experienced an unexpected increase in decline despite the narrowing of the previous decline. Customs data shows that in September alone, my country’s exports of fabrics and workwear totaled US$22.765 billion, down 15.4% year-on-year. The decline was 12.3 percentage points larger than in August (exports dropped 3.1% year-on-year) and 12.3 percentage points higher than in September last year (exports dropped 5.7% year-on-year). ) expanded by nearly 10 percentage points. From January to September, the cumulative exports of fabric workwear reached US$198.654 billion, a year-on-year decrease of 6.02%. The decline expanded by 1.4 percentage points from the previous eight months and by nearly 3.6 percentage points from the first half of the year.
The traditional peak season of the fabric market is not prosperous, and the chill in the export market makes He Xiaosi, Fabric Workwear Information Manager of Huarui Information, feel that winter has arrived early for the industry. Broken down by monthly data, since this year, the year-on-year growth rate of exports of fabrics and workwear both achieved high positive growth in March, and have basically continued a downward trend since then. Only exports of fabrics achieved positive growth again in August. At the same time, workwear exports have continued to decline since May this year. Although the decline increased in September, the decline has not changed much. In September, the export of fabric products was US$7.72 billion, a year-on-year decrease of 20.5%, which was 25 percentage points lower than that in August (exports were US$10.246 billion, a year-on-year increase of 5.2%); the export of workwear was US$15.045 billion, a year-on-year decrease of 12.6%, a year-on-year decrease of 25 percentage points. (Exports were US$17.686 billion, down 7.3% year-on-year), the decline expanded by 5 percentage points.
It can be seen that the year-on-year growth rate of fabric workwear exports expanded from a single-digit decline in August to a double-digit decline in September, mainly due to the fact that the export of fabric products changed from positive growth in August to a sharp decline in September. Why did fabric exports turn around in September? Although the breakdown of specific products has not yet been released, He Xiaosi pointed out in an interview with a reporter from International Business Daily that this was mainly due to the fact that many exports in Zhejiang and other places were affected by the G20 Hangzhou Summit. The impact of the limited production suspension of fabric printing and dyeing enterprises for nearly half a month. Exports of fabric products are mainly spun yarns, fabrics and finished products, of which fabrics account for about 50%. The decline in fabric exports, which accounts for half of the country, will undoubtedly directly affect the export trend of fabric products.
In order to ensure the convening of the G20 Hangzhou Summit in early September, Hangzhou and surrounding areas implemented a limited production shutdown for nearly half a month (August 24 to September 6). The printing and dyeing volume in Zhejiang accounts for about 65% of the national production capacity, and the finishing of natural cotton fabrics into fabrics often requires post-processing processes such as bleaching, coloring, and printing. During the period when printing and dyeing factories suspended production and restricted production, the professional cloth workwear markets in many places in Zhejiang also fell into a state of shutdown without goods. Based on this, He Xiaosi deduced that the main factor that caused the export of fabric products to shift from positive growth in September should be the stagnation of fabric production caused by the large-scale stagnation of printing and dyeing production, which in turn affected the export of fabrics.
Of course, the continued impact of weak external demand, industrial relocation, and dispersed orders have also restricted the export of fabric workwear to varying degrees. This year, as foreign trade demand continues to be weak, black swan events have occurred frequently in the Philippines, Turkey and other places, and Brexit has further worsened the foreign trade environment.
At the same time, my country’s industries including fabric workwear are in the throes of transformation. With rising costs, compared with Southeast Asian countries such as Vietnam and Cambodia, my country’s comparative advantage in fabric workwear production has weakened, and trade orders have declined. dispersion. Under this situation, many Chinese companies have transferred part of their production capacity to Southeast Asia, which has also caused the diversion of related trade orders.
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