Special report: Analysis of the impact of RCEP on China’s textile industry

Summary:

From the changes in the global textile industry, we can see that political relations, technological development and labor costs have all played a very important role in the transfer of the industry.

The pace of textile industrial transfer has accelerated significantly in recent times, and the technological barriers to the textile industry are getting lower and lower. It is increasingly difficult for a country or region to maintain its long-term leading position in the textile industry. The role of technological barriers is weakening, while the role of cost and geopolitics is increasing.

Although China’s textile and apparel exports are currently the undisputed leader in the world, we see that the peak has been reached near 2015. In 2020, due to the epidemic, China regained part of its market share. However, based on labor cost considerations, the direction of the transfer of textile and apparel supply chains in Europe and the United States will not change, and the “southeast flight” of the textile industry is still a mid- to long-term trend.

The Sino-US trade war began in 2018, and the pace of globalization has slowed down. In addition to suppressing China’s high-tech industries, the United States has increased tariffs on Chinese products and restricted exports. Among them, textiles and clothing have become a key “care” industry, forcing the Chinese textile industry to open up new areas. market. This is also one of the important reasons why China strives to promote RCEP.

After the RCEP agreement takes effect, China’s textile and apparel tariffs on Japan and South Korea will be significantly reduced, which will first squeeze Vietnam’s markets in the two places. Vietnam’s textile industry has developed rapidly in the past decade. It first took advantage of labor cost advantages to undertake China’s industrial transfer. Subsequently, it actively explored the European, American, Japanese and Korean markets and began to compete with China. After the Sino-US trade war, the probability that US textile and apparel orders will continue to tilt towards Vietnam has increased.

The largest consumer market for textiles and clothing in the world is still traditional developed countries such as Europe and the United States. The reduction and clearance of tariffs in the RCEP area is just a re-division of the “stock market” cake.

If the trade agreement between RCEP member states can promote the further improvement and development of the regional economy and the further optimization of the industrial chain, it will undoubtedly bring new increments to the textile industry. RCEP will bring us not only “Involution” also involves win-win cooperation.

AAA

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