The traditional peak season of “Golden Nine and Silver Ten” has arrived. Compared with the polarization of the domestic trade market, the performance of the foreign trade market is remarkable. No, the person in charge of a textile company revealed to the editor that the export sales environment this year is acceptable, and the order levels of customers with whom he does business have basically returned to pre-epidemic levels. During recent visits, the editor also found that many foreign trade companies do not have a deep experience of the off-peak and peak seasons, and they all said that foreign trade orders have been basically stable and rising since the beginning of this year.
Foreign market demand is strong, and the return of orders has become a new driving force for textile and apparel exports
As can be seen from the figure above, since 2014, due to a series of reasons such as the gradual disappearance of the domestic demographic dividend, the textile industry has moved to Southeast Asia, where costs are lower, and my country’s clothing exports have shown a downward trend year by year. The sudden epidemic in 2020 plunged the global supply chain into an unprecedented crisis, and also caused my country’s textile and apparel exports to fall back to the level of ten years ago.
It can be seen from the clothing export data in the past ten years that the growth rate curve in 2021 is particularly prominent. Behind this growth against the trend is the return of orders brought about by the production capacity substitution effect under the epidemic, as well as the continued recovery of international demand. Thanks to the effective prevention and control of the epidemic, my country’s industrial chain has been restored in a timely manner, while Southeast Asia and other regions have been deeply affected. In order to ensure continuous supply, European, American, Japanese and Southeast Asian purchasers have transferred orders directly or indirectly to my country, which has brought about the return of clothing production capacity to a certain extent. According to incomplete statistics, in 2021, the return of foreign clothing orders will exceed 200 billion yuan.
Entering 2022, strong foreign market demand has become the main factor driving the growth of my country’s textile and apparel exports. Data from the General Administration of Customs released on September 7 shows that in RMB terms, from January to August 2022, the cumulative exports of textiles and clothing were 1.43779 billion yuan, an increase of 11.9% over the same period last year (the same below), of which textile exports were 665.6 billion yuan. An increase of 10.8%, clothing exports reached 772.19 billion yuan, an increase of 12.8%. It can be seen that clothing has made a more prominent contribution to the growth of the industry’s overall export volume, and the export volume and price of fabrics and knitted clothing have both increased.
Unleashing policy dividends, RCEP brings new opportunities for foreign trade exports
With the implementation of the RCEP agreement, trade costs among member countries have gradually declined. Since this year, my country’s textile and apparel exports have mainly flowed to Europe, the United States, Japan and the ASEAN region. From the perspective of growth rate, the ASEAN and Bangladesh markets have obvious growth trends, with ASEAN growing by 23% and Bangladesh growing by 36%. From January to June, the share of RCEP member countries in China’s textile and apparel exports also increased from 27.6% to 29.1%.
Since the RCEP agreement came into effect, Japan has twice reduced import tariffs under RCEP, with textiles and footwear products being important tax reduction commodities. This benefit has enabled my country to continue to unleash its trade potential with Japan, reversing the trend of my country’s continued decline in its market share in Japan over the years. Through tax reduction, my country also has certain growth potential in Japanese clothing exports.
In addition to enjoying direct tariff reductions and exemptions, the RCEP agreement also helps companies expand their “circle of friends.” With the RCEP agreement comes more and more options, more sources of goods and suppliers, allowing companies to save import costs while also increasing industry competitiveness, injecting new impetus into the development of companies.
With the help of the RCEP agreement, my country’s competitive advantages in textile and apparel exports have been further highlighted, and the number of orders has steadily increased, which has also boosted the export confidence of foreign trade companies.
RMB depreciation brings positive support on the cost side
Recently, what may have attracted the most attention from foreign traders is the continued depreciation of the RMB.
In the short term, exchange rate fluctuations have brought certain benefits to foreign trade export companies. On the one hand, the depreciation of the RMB has brought higher cost performance to our products, significantly increasing the purchasing desire of foreign consumers. For businesses, this means an increased likelihood of receiving orders. On the other hand, the depreciation of the RMB also brings benefits on the cost side. Even if the export order volume of enterprises is almost the same as in previous years, with the advent of exchange rate differences, enterprisesThe industry’s revenue will increase.
During the interview, the editor found that many companies will pass on part of the benefits brought by the exchange rate difference to customers. The person in charge of a textile foreign trade company revealed to the editor that since the beginning of this year, the depreciation of the RMB has given them an advantage in negotiations with customers. They have given up some exchange rate points when finalizing orders, which not only shows sincerity to customers, but also enhances their reputation in disguise. Stickiness with customers. The person in charge of another foreign trade company said that since September, regular customers from Europe and the United States have come to place orders. Orders that were not placed in the first half of the year have been implemented recently, and the advantage in exchange rate has become a factor that cannot be ignored.
Taken together, there are signs to follow that the foreign trade market is improving. Although there is still a certain degree of uncertainty in foreign market demand in the second half of the year, the strong resilience of my country’s textile and apparel industry chain since the epidemic has effectively supported the recovery of foreign market demand. Facing the upcoming two major overseas consumption seasons “Christmas” and “Black Friday”, orders may be arriving at a “fast pace”!
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