The growth of textile and apparel exports slows down, and it is difficult to change the downward trend after the combination of positive factors
Data recently released by the General Administration of Customs shows that in the first 10 months of this year, my country’s textile and apparel exports totaled US$153.717 billion, a year-on-year increase of 5.89%. Industry analysts believe that due to the economic slowdown caused by the financial crisis, the decline in demand in the United States and other countries has led to a sharp decline in the growth rate of my country’s textile and apparel exports. Under the premise that both domestic and foreign demand are affected, a series of favorable policies cannot change the downward trend of the industry.
Export growth in the first 10 months hit a new low in nearly 6 years
In October this year, the export value of textiles and clothing was US$16.75 billion, a year-on-year increase of 9.32%, but a decrease of nearly US$1.3 billion from last month, an increase of -6.94%. Among them, exports of clothing and clothing accessories were US$11.185 billion, a year-on-year increase of 11.54%; textile yarns, fabrics and products were US$5.560 billion, a year-on-year increase of 14.33%.
Experts said that the 5.89% increase in the first 10 months fell by 5.19 percentage points from the first half of this year and 13.84 percentage points from the same period last year, which was the lowest in the past six years. Excluding the Spring Festival factors in February, my country’s textile export growth has declined for nine consecutive months since January, indicating that the trend of export deterioration is further expanding. If exchange rate factors are taken into account, textile and apparel exports in RMB from January to October fell by 3.49%, of which clothing fell by 8.83% and textiles increased by 8.90%. This is also the fifth consecutive month of RMB-denominated textile export growth. fall back.
The shrinking volume was also reflected in the just-concluded 104th Canton Fair. Data show that as of November 5, the textile and clothing hall’s transaction volume was US$3.42 billion, a decrease of 31.5% from the previous session. Among the main transaction areas, the transaction volume to the European Union was US$1.32 billion, a decrease of 28.6% from the previous session. The United States ranked second, with a total transaction volume of US$460 million, a decrease of 36.1% from the previous session.
Experts said that the driving force that had previously barely supported the growth of textile exports mainly came from Europe. However, the European economy is also showing signs of recession, and the appreciation of the RMB against the euro has accelerated significantly. The cumulative appreciation rate in more than four months has exceeded 20%. In the future, my country’s textile exports to the EU are very likely to follow the footsteps of the US market. “Next year’s negative export growth is a foregone conclusion. If the decline in textile exports from the end of this year to next year can be stabilized within -10%, it will be an ideal situation.”
It is difficult to change the downward trend of the industry
The State Council has recently issued ten measures to stimulate the economy, including the comprehensive implementation of the value-added tax transformation reform in all regions and all industries across the country starting from January 1 next year.
The VAT transformation will increase corporate profits to a certain extent and at the same time alleviate the current tight cash flow situation in the industry. Preliminary estimates show that the total tax incentives enjoyed by the textile industry in 2019 are approximately 16.1 billion yuan.
The “good” is not just here. The Ministry of Finance announced on October 21 that starting from November 1, the export tax rebate rate for textiles and clothing would be increased by 1 percentage point to 14%. This is the second increase this year. This year, the textile and apparel export tax rebate rate has been raised by a total of 3 percentage points.
Zhang Xianping of Donghai Securities said that the 3% increase in export tax rebates throughout the year will have a significant impact on 2009. If calculated based on this 1% increase, the profits of enterprises above designated size in the industry will increase by 5.935 billion yuan in 2019; if the impact of the 2% export tax rebate rate increase in July 2019 is also included, the industry profits will increase by 19.336 billion yuan in total. .
But this is just a static calculation. Shi Hongmei of Orient Securities pointed out that my country’s textile export enterprises have poor bargaining power, and part of the benefits of increasing the tax refund rate will be “shared” by foreign businessmen.
She said that the progressive effect of the policy will be beneficial to the industry, but it cannot completely solve the fundamental problems of the industry. The fundamental problems of the textile industry are declining demand and sluggish sales.
In addition to the serious decline in exports, domestic demand is also difficult to open. Experts point out that the benefits only solve the cost problem and help companies “reduce the burden.” Under the influence of demand, the industry has already formed a downward trend.
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