Textile industry: hardest hit by weak external demand

Textile industry: hardest hit by weak external demand

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As an export-oriented industry, the textile and garment industry has been in trouble before the national economy since 2007 due to factors such as the appreciation of the RMB and rising factor prices. In 2019, the growth rate of my country’s textile and clothing exports slowed down significantly.

Starting from February 1, 2019, my country has increased the textile export tax rebate rate to 15%. However, customs data shows that in the first quarter of 2019, my country’s total exports of textiles and clothing were US$34.067 billion, a sharp drop of 6.52% year-on-year. . At the China Trade Fair held in Shanghai in early March, the textile and apparel category only recorded a transaction volume of US$1.245 billion, a decrease of 32.47% from the previous session. This also reflects the pressure faced by the export of the textile industry from one aspect.

Although statistics show that the added value of the textile industry above designated size in the first quarter of 2019 increased by 6.1% year-on-year, the growth rate has rebounded from the 5.5% low in December last year.

However, some experts in the industry believe that when the inventory level in the European and American markets reaches a low level, the inventory must be reset, and the rebound in orders brought about by the inventory reset may help March or even the next few months. The improvement in China’s exports is not necessarily a rebound in demand. As for the rebound in exports in March, it is normal over the years, and the textile industry has not yet gone through the difficult period.

In addition, some media said that after the cancellation of quotas for China’s textile and apparel exports to the EU and the United States, all major export target countries have become more vigilant about China’s textile and apparel exports. It is reported that the number of Chinese textile and clothing products involved in the recall notices issued by the US Consumer Product Safety Commission (CPSC) from January to March increased by nearly 20% year-on-year; The number of notifications for fabrics and other products increased by 633% year-on-year.

What is even more worrying is that the trend of international trade protectionism triggered by the financial crisis has intensified.

It is reported that the US economic stimulus package will include textiles and clothing in the “Buy American” clause; the European Union has proposed new and higher requirements on the name of textile fibers, textile label content and other markings; Indonesia has forced national civil servants to Buy domestic products; Ecuador imposes a specific tax of US$10 to US$12 per kilogram of imported textiles.

“In the past, the European market could produce more than 100,000 pieces. So far, it is only about two-tenths. In previous years, this market had at least about six-tenths.” Shaanxi Edweis Cashmere has been involved in the foreign trade industry for more than 20 years. Sun Mingchi, general manager of the Products Co., Ltd., said in an interview with a reporter from China Economic News that in the field of foreign trade, the profits of the textile industry are too thin and there is not much room for price reduction.

After it was finally determined that the international market was not going well, Sun Mingchi’s company began to turn to expanding the domestic demand market this year. “There is no other way now, but to push it out, such as promoting yourself on the Internet.”

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