As the financial crisis approaches, Chinese textile companies and foreign merchants tide over the difficulties together

As the financial crisis approaches, Chinese textile companies and foreign merchants tide over the difficulties together

The financial crisis is causing China’s manufacturing companies to form a closer community of interests with customers from all over the world. When facing unprecedented difficulties, manufacturers and buyers have to think more about teaming up for warmth, and the life-and-death competition is temporarily abandoned. To the side.

The order volume of Guangdong Zhongshan Xiahu Shijia Clothing Co., Ltd., which produces T-shirts, has not decreased this year, but has increased slightly. Li Min, general manager of the branch responsible for part of the T-shirt production, said: The common practice of many international brands in Europe and the United States is that if they need 100,000 pieces of ready-made clothing, they will divide the order among five manufacturers in order to keep prices down and control the power of life and death. But this year is different. This year’s orders may be reduced to 50,000 pieces, but they will be concentrated on one or two reputable companies.

The reason for this is that if you are a reputable partner worthy of long-term development, overseas buyers are not willing to see you close due to the financial crisis.

However, there are still only a few lucky companies like Xiahu Family. More Chinese companies are worried about low-price competition triggered by the financial crisis.

The ex-factory price of an ordinary knitted garment is US$3.5, but now some foreign merchants have lowered the price to US$2.8. Zhang Chengzhi, general manager of Zhejiang Yongnan Knitted Garments Co., Ltd., said that this price cannot even guarantee the daily operating costs of the company. .

Gan Guohua, secretary-general of the Zhejiang Xiangshan Textile Association, said that local companies do not agree with such disorderly competition, but in order to ensure survival, Chinese manufacturers, who can always produce high-quality and low-priced products, are doing their best to reduce the cost of each link. The cost helps sellers maintain the increasingly depressed market in European and American countries.

Furun Import and Export Company has processed silk clothing for the American brand CITRON for many years. This year, orders from this company decreased by 20%. General manager He Haiqing said that silk clothing costs more than 30 US dollars per set. High-end clothing is not popular in the US market this year. Furun discussed with American customers to use cotton and linen to replace silk ingredients and develop relatively low-cost fabrics to develop Chinese products. end market.

He Haiqing said that factories and dealers are all part of the international brand production chain, and we are all doing our best to ensure that this chain is not broken.

Since the financial crisis, paying one hand and delivering the goods has become one of the principles of risk prevention. However, many Chinese factories have done the opposite and proactively extended the payment time for foreign merchants to help them reduce financial pressure.

Zhejiang Yongnan Knitted Garments Co., Ltd. has more than 1,500 employees and self-operated exports of US$40 million in 2019. Russian women’s clothing brand OGGI has cooperated with Zhejiang Yongnan Knitted Garment Co., Ltd. for seven or eight years. Due to the severe market decline, OGGI’s orders this year have been reduced by one-third.

General manager Zhang Chengzhi said: In addition to giving them a few percentage points of the tax rebate, this year we allowed one-third of OGGI’s payment to be deferred for one month or 45 days, giving them time to collect the payment.

There is a Chinese idiom that says, lips and teeth are dependent on each other, and another saying is, “lips are dead and teeth are cold.” We businessmen understand that the living space of downstream tourists is the living space of our manufacturers. Zhang Chengzhi said.

As the world’s largest exporter of daily necessities, China’s foreign trade exports fell 37% year-on-year in the first two months of this year, and the profit margins of industrial companies fell to multi-year lows. In Zhejiang Province, which has more than 300 manufacturing industry clusters, including tens of thousands of single-trade titles in China and even all of China, foreign trade companies are accustomed to double-digit growth every year. This year, more than half of the companies are hovering at the critical point of profit and loss.

This is a dilemma that Chinese foreign trade companies, which have been growing rapidly for 20 or 30 years, have never encountered before. Lou Chuang, director of Zhuji Foreign Trade and Economic Cooperation, said that many domestic entrepreneurs and overseas buyers also met during this crisis to the importance of corporate integrity and orderly competition.

80% of the companies in Juexi Street, Xiangshan, Ningbo are engaged in cotton knitting foreign trade exports. Zhu Anwei, secretary of the street party working committee, said that nearly a hundred local manufacturing companies with an annual output value of 5 million yuan have maintained a brotherly relationship with foreign businessmen for many years. Because of this sincerity and credibility, we were basically unaffected by the last round of the Asian financial crisis.

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