The competitiveness of foreign trade apparel companies has declined, and order profits have dropped
Recently, Hangzhou Customs released Zhejiang Province’s foreign trade data for the first quarter of this year. Due to slow global economic recovery and frequent trade frictions, the province’s total foreign trade import and export value in the first quarter of this year was US$69.95 billion, an increase of 5.2% over the same period last year and 2.1 percentage points lower than the national average growth rate. This is the first time Zhejiang’s quarterly foreign trade growth has fallen to single digits since 2010.
Zhejiang, a major foreign trade province, has encountered a more severe test than the 2008 global financial crisis.
Double drop in order profits
Guan Weimin, chairman of Hangzhou Xinyi Garments, has been busy opening a new store in Hangzhou Tower this year and has not been involved in foreign trade work much. In July this year, Hangzhou Xinyi Garment’s first domestic women’s clothing store will open in Hangzhou Tower. As a foreign trade company, Xinyi Garment’s sales in the first quarter of this year decreased by about 6% year-on-year. It is expected that this year’s business volume will shrink by about 10% compared with last year.
“The key is that even if there are orders, there is no money to be made. When selling a piece of clothing, the profit is only about 1%.” Guan Weimin said that the problems he is encountering now are more serious than during the 2008 global financial crisis.
Fang Baizhong, a foreign trade import and export company in Hangzhou who is engaged in selling Christmas supplies, said that the profits of his Christmas supplies are also very low this year, and now he can almost only rely on export tax rebates to support it.
Customs statistics show that in the first quarter of this year, Zhejiang’s export growth was slow. The export growth rate of traditional bulk export commodities such as mechanical and electrical products, textile yarns, fabrics and products, and clothing was less than 5%, while the export of high-tech products fell year-on-year. 3.5%.
The most critical factor is the decline in competitiveness
Factors such as the appreciation of the RMB and the decline in international market demand continue to have an unabated impact on export companies. Coupled with the rise in domestic factor costs, export companies in coastal areas are under great pressure. Some companies said that it’s not that they don’t have orders now, but that they dare not take orders. “The more they take, the more they will lose.”
Guan Weimin said that because there are few foreign orders, companies are very aggressive in lowering prices. However, the opponents he now faces are no longer domestic counterparts, but from Southeast Asian countries such as Vietnam and Indonesia where labor is cheaper.
Guan Weimin explained that Xinyi Garment has been established for more than 20 years, and the management costs in all aspects have been very scientific. However, the rising salary of personnel is the most critical factor that makes it difficult for enterprises to control costs. The year before last, Xinyi Garment Co., Ltd. The monthly salary of a garment worker is only about 2,000 yuan, and this year it has reached 4,000 yuan. In addition, the rising cost of raw materials, rent and transportation costs have eroded the profits of his products.
Zhang Handong, director of the International Economic and Trade Research Center of the Zhejiang Provincial Department of Commerce, said that the current situation faced by Zhejiang’s foreign trade companies is more severe than in 2008. He explained that the reduction in international external demand at that time was only temporary; but now Zhejiang’s foreign trade is faced with the fact that the competitiveness of export products has declined, and this problem will exist for a long time: “On the one hand, Zhejiang’s brand competitiveness has not been formed, and on the other hand, Zhejiang’s brand competitiveness has not been formed. On the one hand, the demographic dividend has been exhausted, and the price competitiveness is not as good as that of Southeast Asian countries. In the short term, we will have to face the embarrassing situation of failing to achieve high results and failing to achieve low results.”
The era of rapid growth is over
Zhang Handong said that judging from the import data in the first quarter of this year, the import of mechanical and electrical products and high-tech products has dropped significantly, which proves that the production enthusiasm of Zhejiang’s foreign trade enterprises is weakening. Foreign trade enterprises are already facing a critical period of survival and urgently need the government. Department policy support. At least the support levels of the 2008 period must be restored.
In fact, there are special reasons why the growth rate of Zhejiang’s foreign trade is lower than the national data. Zhang Handong explained that Zhejiang’s proportion of exports to the EU region is much higher than the national average. The economic weakness of EU countries has a great impact on Zhejiang’s foreign trade.
Zhang Handong said that if appropriate measures are taken, it is still possible for Zhejiang’s foreign trade to achieve a 10% growth throughout the year, but it is no longer possible to achieve an annual growth of 20% or even 30% as in the past. The increase in labor costs has forced enterprises to improve labor productivity and shift to capital- and technology-intensive exports. Export enterprises should work hard to improve their internal skills, increase the added value of export products, upgrade the structure of export products, and lay a solid foundation for future development.
Disclaimer:
Disclaimer: Some of the texts, pictures, audios, and videos of some articles published on this site are from the Internet and do not represent the views of this site. The copyrights belong to the original authors. If you find that the information reproduced on this website infringes upon your rights and interests, please contact us and we will change or delete it as soon as possible. </p
