Why did textile and clothing export “Golden Nine” break the promise?

Why did the textile and clothing export “Golden Nine” break the promise

The usual Christmas orders bring ” The “Golden Nine” market did not appear. In September, my country’s fabric workwear exports experienced an unexpected increase in the decline despite the narrowing of the previous decline.

“Winter” front

Customs data shows that in September alone, my country’s exports of fabric workwear were US$22.765 billion. , down 15.4% year-on-year, 12.3 percentage points larger than August (exports dropped 3.1% year-on-year), and nearly 10 percentage points larger than September last year (exports dropped 5.7% year-on-year). From January to September, the cumulative exports of fabric workwear reached US$198.654 billion, a year-on-year decrease of 6.02%. The decline expanded by 1.4 percentage points from the previous eight months and by nearly 3.6 percentage points from the first half of the year.

The traditional peak season of the fabric market is not prosperous, and the export market is chilling He Xiaosi, Fabric Workwear Information Manager of Huarui Information, feels that winter has arrived early for the industry.

Breaking down by monthly data, since this year, fabrics and workwear The year-on-year growth rate of exports all achieved high positive growth in March, and then basically continued the downward trend. Only fabric exports achieved positive growth again in August. At the same time, workwear exports have continued to decline since May this year. Although the decline increased in September, the decline has not changed much.

In September, fabric exports were US$7.72 billion, a year-on-year decrease of 20.5% , the decline expanded by 25 percentage points compared with August (exports were US$10.246 billion, a year-on-year increase of 5.2%); workwear exports were US$15.045 billion, a year-on-year decrease of 12.6%, a decline that was 5% larger than August (exports of US$17.686 billion, a year-on-year decrease of 7.3%). percentage points.

It can be seen that the year-on-year growth rate of fabric workwear exports increased from August The single-digit decline expanded to a double-digit decline in September, mainly due to the fact that the export of fabric products changed from positive growth in August to a sharp decline in September.

Stop production and limit production to “show off your power”

Why did the export of fabric products turn around in September? Complete control of specific products The breakdown of the data has not yet been announced, but He Xiaosi pointed out in an interview with a reporter from the International Business Daily that this was mainly affected by the suspension of production of many fabric printing and dyeing companies in Zhejiang and other places for nearly half a month before and after the G20 Hangzhou Summit.

Fabric exports mainly include spinning yarn, fabrics and finished products Mainly, fabrics account for about 50%. The decline in fabric exports, which accounts for half of the country, will undoubtedly directly affect the export trend of fabric products.

In order to ensure the holding of the G20 Hangzhou Summit in early September, Hangzhou and surrounding areas A limited production shutdown was implemented for nearly half a month (August 24th to September 6th). The printing and dyeing volume in Zhejiang accounts for about 65% of the national production capacity, and the natural color cottonFinishing fabrics often requires post-processing processes such as bleaching, coloring, and printing. During the period when printing and dyeing factories suspended production and restricted production, the professional cloth workwear markets in many places in Zhejiang also fell into a state of shutdown without goods.

Based on this, He Xiaosi inferred that the export of fabric products in September dropped from normal The main factor behind the downward shift in growth should be the stagnation of fabric production caused by the large-scale stagnation of printing and dyeing production, which in turn affects the export of fabrics.

Of course, the continued impact of weak external demand, industrial transfers, and scattered orders will also The export of fabric workwear has been restricted to varying degrees. This year, as foreign trade demand continues to be weak, black swan events have occurred frequently in the Philippines, Turkey and other places, and Brexit has further worsened the foreign trade environment. At the same time, my country’s industries including fabric workwear are in the throes of transformation. With rising costs, compared with Southeast Asian countries such as Vietnam and Cambodia, my country’s comparative advantage in fabric workwear production has weakened, and trade orders have declined. dispersion. Under this situation, many Chinese companies have transferred part of their production capacity to Southeast Asia, which has also caused the diversion of related trade orders.

Negative growth is a foregone conclusion

Compared with the export of fabric products, this year’s workwear exports The situation is almost bleak. Except for the export data in the second quarter, which is basically flat, the rest of the time is negative growth. In this regard, He Xiaosi explained that compared with the more technology-intensive and capital-intensive characteristics of the fabric products industry since its transformation in recent years, the labor-intensive characteristics of the workwear industry have not changed much. Breaking down the cost structure of related products, it can be seen that the raw material cost of fabric (gauze) products accounts for 65% to 70% of the total cost, and the raw material cost of workwear products accounts for close to 50% to 60% of the total cost, with low added value. ,The competition of related products is also mainly reflected in ,cost. Therefore, in comparison with a series of advantages in raw materials, labor, and policies in Southeast Asia, China’s comparative advantage in workwear exports is increasingly weakening.

The impact of the G20 Hangzhou Summit is phased, and its impact on my country’s fabrics Restrictions on the export of workwear will be removed as factories resume production. “In the fourth quarter, the decline in my country’s fabric workwear exports will narrow.” However, He Xiaosi also reminded that the Internet Conference to be held in November also arranged for limited production suspensions in surrounding areas when it was held last year. This year’s conference is scheduled to be held in Wuzhen. , it is more likely that a limited production stoppage will be arranged at that time, which will also have a negative impact on the export of fabric workwear.
He Xiaosi believes that this year’s fabric work in my country will The decline in exports of equipment is a foregone conclusion, “unless there will be special counter-cyclical factors in the later period.” Accordingly, my country’s fabric workwear exports will experience a rare continuous decline since last year’s decline in more than 20 years.