The impact of Brexit on the trade of Chinese textile and apparel companies
On June 24, local time, when the British referendum announced that they would leave the European Union, many British people regretted it. Although there was little chance of a comeback, they insisted on participating in the “second referendum” online, hoping to change the result. According to the latest news from China News Agency, European Commission President Juncker said that the UK should explain as soon as possible when it plans to leave the EU. But when and how long the peace talks will last, the timetable for Britain’s departure from the European Union is still subject to many uncertainties.
On June 24, some “Remain” supporters rallied in front of the British Parliament Building to oppose Britain’s departure from the European Union.
Therefore, although Brexit is currently at the forefront of world public opinion, and it will still be a long time after the UK launches the Brexit process, Chinese textile and apparel companies still need to rationally estimate and judge trade with the UK. situation and direction. In this regard, the reporter immediately interviewed the heads of the China Chamber of Commerce for Import and Export of Textile Products, the International Trade Office of the China National Textile and Apparel Industry Federation and relevant local industry organizations, as well as the heads of the top 30 companies exporting to the UK from January to May this year. Listen to their predictions and situation analysis on the impact of Brexit on the trade of Chinese textile and apparel companies.
The UK is the largest market for Chinese textile and apparel exports to the EU
According to the latest statistics obtained by China Customs, from January to May 2016, China’s textile and clothing exports to the UK reached US$4.2 billion, an increase of 3% compared with the same period last year. China’s textile and clothing imports from the UK Reaching US$76.34 million, an increase of nearly 1% compared with the same period last year. From January to May 2016, the import and export volume of textiles and apparel between China and the world declined year-on-year, with imports falling by 11% and exports falling by nearly 2%. At the same time, from January to May 2016, China’s cumulative exports to the EU were US$17.47 billion, a decrease of 3.9%, and the average unit price of exports fell by 6.6%.
In this regard, Zhang Xian, vice president of the China Chamber of Commerce for Import and Export of Textiles, said: “From January to May 2016, China’s exports to the EU and even the world as a whole declined, so it is not surprising that the UK still maintained a 3% growth. Recently. In the past few years, the UK has become the largest market for Chinese textiles and clothing in the EU, and it is also a relatively stable market. Judging from the statistical data on China’s textile and clothing exports to the UK in the past 20 years, China’s export share to the UK has been showing an upward trend year by year. A comparison of a set of global market share data can also confirm this: in the first five months of 2016, China’s textile and apparel exports to the UK accounted for 4.16% of total global exports, ranking fifth in China’s export market; In 2015, the Sino-British textile and apparel trade volume reached US$12.63 billion, of which exports to the UK accounted for 4.37% of China’s global exports, still ranking fifth in China’s export market; in 2014, China’s textile and clothing exports to the UK accounted for 4.37% of China’s global exports. Clothing exports accounted for 3.86% of total exports, ranking 6th in China’s export market.”
According to a list of China’s top 30 textile and apparel export companies to the UK from January to May 2016 obtained by the China Chamber of Commerce for Textile Import and Export, Guangzhou Textile Import and Export Group Co., Ltd.’s export volume to the UK reached 23.988 million. U.S. dollars, a year-on-year increase of 316.25%; Guangdong Province Foshan Shunde District Qishun Silk Import and Export Co., Ltd.’s export volume to the United Kingdom reached 12.062 million U.S. dollars, a year-on-year increase of 290.1%; Tianjin Likun Import and Export Co., Ltd.’s export volume to the United Kingdom reached 1083.1, a year-on-year increase of 290.1%. An increase of 367.32% million US dollars. The export trade volume of the above three companies to the UK from January to May 2016 doubled compared with the same period last year. In this regard, Wu Zhenghong, secretary-general of the Guangzhou Garment Industry Association, told reporters: “The number of textiles and clothing imported by the UK every year accounts for more than half of the total market, and the growth of the UK’s textiles and clothing imports from China is particularly significant. Since the international financial crisis, between China and the EU Among the countries’ bilateral trade, the growth rate of China-UK bilateral trade ranks first. The UK has always advocated strengthening economic and trade relations with China. The UK is regarded as the most active country in the EU in advocating trade and investment liberalization. Although its foreign trade regulations have adopted EU common policies, but generally the British government does not have many restrictions on companies importing or exporting from countries outside the EU, which has created a good business environment for Chinese textiles and clothing exports to the UK.”
To sum up, the Sino-British bilateral trade in textiles and apparel is in the honeymoon period. Will Brexit cause more cracks in the thorny Sino-British industrial cooperation? Will the benefits outweigh the disadvantages, or will the disadvantages outweigh the benefits?
Profit: The fall of the pound will increase the short-term profits of export companies
First, Brexit requires a long negotiation process, and the impact will take a long time to appear.
Wu Zhenghong said: “The UK will face a long legal process after proposing the Brexit schedule. Chinese export companies do not need to be too anxious and worried. The explanation of leaving the EU mainly focuses on Article 50 of the Lisbon Treaty. This regulation It only describes the regulations for EU member states to leave the EU, and there is no lesson learned from the past. Once Regulation 50 comes into effect, although the UK and the EU may have two years to negotiate, the trade agreement between the UK and the EU may be renegotiated, and the trade rules It may take several years to finalize.”
Second, after leaving the EU, “Made in China” will have easier access to the British market.
Whether it isPlaying the role of a logistics transfer station, European goods are exported overseas through the UK, and overseas goods often enter Europe through the UK. “Wu Zhenghong explained to reporters.
According to analysis by the British Treasury, after Brexit, the relationship between the UK and third countries needs to be restructured within 2 to 15 years due to the relationship between the UK and the EU. The relationship agreement between China, the United Kingdom, and the European Union may have to be re-signed after a long period of negotiation, which will have a greater impact on companies with large trade and investment exchanges between China, the United Kingdom, and China and Europe.
Fourth, currency depreciation will gradually reduce the UK’s ability to attract foreign investment, making China’s investment in the UK highly variable.
Wu Zhenghong said that in the industrial chain and trade chain, judging from the mutual dependence of the two sides, the UK is more dependent on the EU than the EU is on the UK. In recent years, China’s investment in the UK has gradually expanded in depth and breadth. If the UK leaves the EU, China is expected to lower its long-term investment in the UK because China will no longer be able to access the EU market through the UK. At the same time, other countries will take similar actions based on the same considerations. “However, it is also possible that Chinese companies will take advantage of the depreciation of the pound and the euro to take advantage of the British market. This opportunistic investment effect cannot be ignored.” Zhang Xian said.
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