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Shanghai’s textile and apparel exports present four major characteristics



Shanghai’s textile and apparel exports present four major characteristics According to Shanghai Customs statistics, in the first four months of this year, the Shanghai Custom…

Shanghai’s textile and apparel exports present four major characteristics

According to Shanghai Customs statistics, in the first four months of this year, the Shanghai Customs District exported US$18.41 billion in textiles and clothing (including clothing and clothing accessories, textile yarns, fabrics and products, the same below), a decrease of 11.6% compared with the same period last year (the same below). Among them, exports of clothing and clothing accessories were US$11.73 billion, down 5.9%; exports of textile yarns, fabrics and products were US$6.68 billion, down 20.1%. Its exports mainly present the following characteristics:


1. After a brief year-on-year increase in exports in March, exports turned from increase to decrease again in April. In the first four months of this year, Shanghai Customs District’s textile and clothing exports fluctuated greatly, with year-on-year growth and decline in single-month exports alternating. Among them, exports in January were US$6.54 billion, an increase of 2.9%; however, the export value in February dropped sharply to US$2.34 billion, a sharp drop of 47.6%, which was the largest decline since joining the WTO; the export value in March rebounded rapidly to US$4.75 billion, down from the previous month. The decline reversed and increased by 5.9%; however, the export value in April was US$4.79 billion. Although it increased by 0.9% from March, it once again turned from increase to decrease year-on-year, with a decrease of 13.4%.



2. General trade exports dominate, and the decline in processing trade is even more obvious. In the first four months of this year, the Shanghai Customs District exported US$15.14 billion of textiles and clothing through general trade, a decrease of 10.9%, accounting for 82.3% of the total textile and clothing export value of the Customs District during the same period. At the same time, exports in the form of processing trade were US$3.19 billion, a decrease of 15.1%, which was 3.5 percentage points higher than the average decline in textile and apparel exports in the customs area during the same period.



3. The exports of private enterprises declined slightly, while the exports of state-owned enterprises shrank significantly. In the first four months of this year, private enterprises exported US$6.97 billion of textiles and clothing through the Shanghai Customs Area, a decrease of 3.6%, accounting for 37.9% of the total textile and clothing export value of the Shanghai Customs Area during the same period, and the proportion increased by 3.1 percentage points. At the same time, foreign-invested enterprises and state-owned enterprises exported textiles and clothing of US$6.41 billion and US$4.13 billion respectively, down 11.9% and 19.4% respectively.



4. The European Union, Japan and the United States are the main export markets, and exports to Japan still maintain growth. In the first four months of this year, the European Union, Japan and the United States still occupied the top three textile and apparel export markets in the Shanghai Customs District, accounting for 65.1% of the total textile and apparel export value in the Customs District during the same period. Among them, exports to the EU were US$4.38 billion, a decrease of 11.7%; exports to Japan were US$3.98 billion, a growth of 2.5% against the trend; exports to the United States were US$3.63 billion, a decrease of 4.5%.



The textile industry is an important labor-intensive industry in China, directly employing more than 20 million people and indirectly involving the employment of hundreds of millions of people. However, affected by the financial crisis, the real economy was sluggish and consumption capacity shrank significantly, which directly caused a significant decline in Shanghai Customs District’s textile and apparel exports in the first four months of this year. Judging from the situation of the just-concluded 105th Canton Fair, the textile and clothing export transaction volume was only 3.23 billion US dollars, a decrease of 11.7% compared to the previous session. At the same time, the original large orders and long orders were replaced by the current small orders and short orders. , indicating that it will still be difficult for textile and apparel exports to resume full growth in the next stage, and the pressure they face is concentrated in the following four aspects:



First, export market demand continues to shrink under the financial crisis. As the financial crisis continues to spread and deepen, the three major developed economies are all in recession, and the consumer demand of national residents has fallen sharply. According to reports, clothing sales are expected to decline further this year after U.S. clothing demand shrank last year for the first time since the late 1940s. Developed economies are the main markets for textile and apparel exports in the Shanghai Customs District, and their continued sluggish demand has directly led to a sharp decline in textile and apparel exports. A recent survey of 200 large textile companies showed that orders for these companies in the first half of the year fell by 20% to 30%. In addition, compared with clothing, textile yarns, fabrics and products not only face developed markets, but also supply a large amount of raw materials for the development of the clothing industry in emerging countries such as India and Vietnam. Due to the overall shrinkage of external demand, clothing exports from neighboring developing countries have also shrunk, and the demand for upstream fabrics has subsequently decreased. The decline in exports of textile raw materials has been under double pressure. In the first four months of this year, the overall decline in textile yarns, fabrics and products in the Shanghai Customs District was 14.2 percentage points higher than the decline in clothing exports in the same period.



Second, the relatively strong RMB exchange rate weakens the competitive advantage of product export prices. Although the exchange rate of the RMB against the U.S. dollar has remained basically stable this year, due to the strength of the U.S. dollar against currencies such as the euro and the Japanese yen, the RMB has also shown a rapid appreciation trend against the euro and the Japanese yen. As of May 6 this year, the appreciation rate of the RMB against the euro and the Japanese yen during the year reached 5.1% and 7.5% respectively. Since October last year, the currencies of many emerging economies have depreciated sharply against the US dollar. At present, the international textile and apparel market is in a highly competitive state, with limited room for product price increases. The strong RMB exchange rate has weakened the price competitiveness of our products in the international market.



Third, the cost advantage of major competitors is gradually increasing. As my country’s land, labor and other comprehensive costs continue to rise, the cost advantages of neighboring countries such as Vietnam and India have been reflected, and some clothing orders have begun to be transferred to surrounding emerging textile industrial zones. Data shows that the labor cost in Bangladesh is US$0.22/hour, in Cambodia it is US$0.33/hour, in Vietnam it is US$0.38/hour, in India it is US$0.51/hour, and in my country it is US$1.08/hour. Chinese textile and garment enterprisesChina’s labor cost advantage has declined significantly, and some European and American orders have begun to shift to neighboring countries.



Fourth, trade protectionism sentiment in the international market is heating up. my country’s textile and apparel products have always been the target of international trade protectionism. As the current economic situation worsens, many countries’ trade protectionist tendencies to protect domestic industries by restricting imports have further intensified. For example, the “Buy American” clause in the U.S. government’s economic revitalization plan in February stipulates that the purchase of some uniforms must be 100% American products. Although my country’s textile export quota restrictions to the United States have expired this year, the United States Textile Organization Association in March It also called on the government to take measures to monitor the situation of textile imports from China. In addition, trade protectionism has spread to more developing countries. Recently, Argentina, Turkey, and Indonesia have also announced restrictive measures on textile and clothing imports.



It is worth noting that while the consumption power of foreign residents has declined, the consumption structure has tilted toward the mid- to low-end, and international bulk raw material prices have fallen sharply, clothing export prices have bucked the trend and risen. In the first four months of this year, the export price of clothing in the Shanghai Customs District increased by 8.8% year-on-year. Among them, the export prices of the top 10 categories of products by export volume all showed an upward trend. This is not only contrary to the current international consumer goods price trend, but also inconsistent with the recent survey results of the China Textile Chamber of Commerce. According to survey data, due to further price reductions by European and American merchants, the prices of corporate orders generally fell by more than 20% from January to February this year. Since August last year, my country has raised the export tax rebate rate for some products six times in a row. The main purpose is to increase corporate profit margins so that they can participate in international competition with a higher price advantage. However, the high tax refund rate also increases the risk that some unscrupulous companies will try to defraud export tax refunds through various methods. Recently, the State Administration of Taxation has issued a notice requiring investigation and punishment of the illegal and criminal behavior of CPU, which also enjoys high tax refund rates, by using high export prices to defraud tax refunds.



In order to ensure the healthy and stable development of the textile and garment industry, it is recommended that: first, guide textile and garment enterprises to improve the core competitiveness of products through technological and brand innovation; second, encourage powerful enterprises to build factories overseas and effectively utilize local land and labor. The third is to strengthen the supervision of textile and clothing export prices, increase the crackdown on defrauding national export tax rebates, and ensure the implementation effect of national macro-control policies.

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