Chinese textile export companies will face a real severe winter
Recent statistics from the General Administration of Customs show that in November 2008, my country’s total foreign trade import and export volume was US$189.89 billion, down 9% from the same period last year. Among them, exports were US$114.99 billion, a year-on-year decrease of 2.2%; imports were US$74.9 billion, a year-on-year decrease of 17.9%. This is the first time since 2000 that all indicators of import and export have experienced negative growth at the same time. At the same time, foreign trade exports dropped by nearly 1/6 from the 19.5% year-on-year growth rate last month, marking the first negative growth since 1998. The sudden and sharp decline in export volume indicates that China’s textile export enterprises will face a real severe winter.
“The end of 2008 is just a slight cold, and the real severe winter is still to come. The first quarter of 2009 will be even colder for Chinese textile companies, and this feeling of severe winter will even last throughout the year.” Industry authority pointed out that the recent sharp decline in exports has sounded a cold warning for Chinese textile companies in 2009.
A professional website has previously released such a research report. The export tax rebate rate was adjusted to 15%. The average exchange rate of RMB against the US dollar in 2009 was estimated at 6.5. Without taking into account other changing factors, the adjustment of export tax rebates will increase the entire textile industry by approximately Net profit of 5.7 billion yuan.
Under the good news of net profit growth of 5.7 billion yuan, domestic textile companies are not “happy”. Perhaps the export tax rebate rate will be further raised to the 17% expected by everyone, which will bring a 51.69% profit increase in 2009. However, such a major benefit cannot be compared with the decline in overseas market demand that will bring China’s textile exports. Not smooth.
No wonder export textile companies can’t be excited. “Without orders, nothing can be discussed.” Cai Mingxiang, vice president of the China National Garment Association and chairman of Guangdong Mingrui Group Co., Ltd., believes that this situation is difficult to deal with. If they don’t give you an order, you won’t be able to deal with it. The most important thing now is to preserve our strength, strengthen the training of the workforce, and wait for the opportunity. Once the market recovers, time rushes into the market. Cai Mingxiang said: “Currently, Mingrui can only use anti-aircraft guns to kill mosquitoes, starting from low-priced products, and striving to cater to the market in terms of technological innovation.”
According to the author’s understanding, in November 2008, Mingrui’s foreign trade Orders dropped by 50%, and by December, Mingrui was unable to receive orders from major American companies half the time. In the past, Mingrui was a well-known export enterprise known as the flower inside the wall and the fragrance outside the wall. The wedding and evening gowns it produces have always been high-end consumer goods on Fifth Avenue in the United States. Foreign businessmen who can place orders with Mingrui are almost all well-known international brands. Mingrui has never had to worry about foreign trade orders.
Experts point out that raising tax rebate policies is unlikely to turn the tide, and may cause companies that originally needed to enter a state of “hibernation” to start learning to “winter swim.” However, the state’s measures to support industrial upgrading are the key to the industry’s eventual rebirth.
Various signs indicate that the export situation in 2009 is not optimistic. First of all, the Eurozone economy has begun to fall into recession since its establishment in 1999, and the cumulative appreciation of the RMB against the euro has reached 19.2%. The EU has become the main region to follow in the footsteps of the United States. Secondly, as the growth rate of domestic retail sales of consumer goods declines, some sources predict that the growth rate of retail sales of consumer goods will fall back to around 12.2% in 2009, while the growth rate of wholesale and retail industries such as clothing, shoes and hats, and knitted textiles may fall back to Below 20%.
Some experts believe that the government’s policy to expand domestic demand will have a positive impact sooner or later. However, due to the current unique domestic objective conditions and the historical awareness and habits of focusing on savings over consumption, the effect of the state’s policies on stimulating domestic demand on textiles and clothing in the short term still needs to be observed. Clothing is an optional consumer product with greater flexibility. When pessimistic expectations are not fundamentally reversed, consumption is likely to be more cautious.
Sun Huaibin, spokesperson of the China Textile and Apparel Industry Association, pointed out that the international situation in 2009 will be more severe. With the spread of the financial crisis and the intensification of trade protectionism, the export situation will not be optimistic. However, the national policy atmosphere this year is better than that in 2008. The introduction of multiple favorable policies and the promotion of domestic demand policies have provided the textile industry with a relaxed external environment. The textile industry should seize the opportunity, work hard on technology and branding, and make full efforts to expand the domestic demand market. (China Business Times)AAVBJYTUJGHNH
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