The textile market is uneven and stable and predictable exchange rates are important
Although the clothing export data in the first quarter showed signs of recovery, what is the future trend and what is the actual operating status of the company? During the 105th Spring Canton Fair, entrusted by the Marketing Department of the China Textile and Apparel Industry Association, a research team from the Textile Industry Branch of the China Council for the Promotion of International Trade visited 105 textile and apparel exhibitors.
The reporter learned that the 105 surveyed companies include 43 clothing companies, 30 textile fabric companies, and 32 home textile companies. Among them, clothing companies involve men’s and women’s clothing, children’s clothing, underwear, casual wear, sportswear and fur and down. The types of enterprises include both industry and trade integrated companies and pure foreign trade and import and export companies; there are both brand area enterprises and small and medium-sized enterprises; there are enterprises in key coastal provinces and cities, as well as enterprises in inland and central and western provinces and cities.
According to reports, the research team obtained some new information on clothing foreign trade exports in more detail by communicating with company leaders and front-line sales staff, and learned about the company’s feedback on the policies that have been introduced and their views on the future. Judgment of apparel export situation.
Export trend – the market is uneven and the phenomenon of price reduction is prominent
According to data from the General Administration of Customs, China’s clothing exports rebounded in March, reaching US$7.43 billion, an increase of 9.9%. Although some people believe that this data is not representative and it will take some time for clothing exports to pick up, the survey results show that most exhibitors at the Canton Fair report that foreign orders have begun to pick up significantly. Therefore, apparel exports may see a slight recovery in the second quarter.
“Orders were stable in the first quarter and have now been scheduled until June.” said Yin Kun, business manager of Hubei Baishiji Clothing Co., Ltd. It is understood that this clothing company has been established for three years, focusing on the European market, and its products are basically exported. In fact, during the visit of the research team, companies generally reported that production was relatively stable in the past quarter. Orders can now be scheduled until June and July. If the situation is good, they can be scheduled for the third quarter, and some companies even have a full year. Orders are fully booked. However, some companies said that orders fell by about 10% in the first quarter of this year.
It is understood that as the economy gradually stabilizes, there are signs of a gradual increase in orders from foreign customers. This is reflected in the fact that the order placement has changed from placing monthly orders in small batches in the past to placing orders in large batches for the entire quarter. Initially, It is judged that this is related to the initial stabilization of the market and the reduction of inventory pressure.
However, although market orders are increasing, buyers are very sensitive to prices, and the phenomenon of price reduction is very prominent, and purchases are concentrated on mid- to low-end products. Even if the price is reasonable, it also puts forward higher requirements for product quality. In addition, a new consumption hotspot is emerging: since professional attire is a big market at home and abroad, involving all walks of life, clothing seasons change and as a reflection of the need for uniform clothing of foreign companies, many exhibitors reported that orders from professional attire are common increase.
However, when will the garment industry’s exports really recover? In this regard, most companies expect the adjustment to next year, and a few pessimists believe that the adjustment will last 2-3 years. The basis comes from the order situation on the one hand, and the feedback from customers on the market on the other hand. Liu Wenjun, vice president of Shandong Yelia Group, said bluntly that Yelia’s orders for the whole year are basically full, but the market information the company has learned from contact is not optimistic.
Business Operations – “Labor Difficulty” Eased and “Loan Difficulty” Worrying
In the face of unfavorable external environments such as sharp turmoil in the international financial market and a significant slowdown in economic growth, it is important for the research team to further understand the impact of various production factors such as raw materials, labor, and money and credit on the production and operation of garment enterprises. One of the subjects of the investigation.
Raw materials, as the main factor in production costs, determine the product price and profitability of the company. According to the survey, companies generally reported that with the rapid decline in oil prices and the shrinking market, raw materials did not fluctuate as violently as in the first half of last year and were generally stable. However, the decline in raw material prices could not keep up with the decline in product prices.
“Difficulty in employment” is no longer a prominent problem. All exhibitors at this exhibition said that the labor shortage has been greatly improved, which may be related to the current economic downturn. If the market recovers, this old problem will be highlighted again.
When asked whether operating funds are in good condition, most companies said there is no problem with capital turnover, but a few small and medium-sized enterprises reported difficulty in obtaining loans. “Companies are now mainly facing financial difficulties.” Guan Aiming, business department manager of Beijing Longxiang Knitted Garment Co., Ltd., said that the company exports cashmere products to the European market. Due to storage problems of raw materials, it needs to occupy a large amount of working capital. It feels relatively tight, but has been unable to Obtain loan support.
The research team believes that although the state advocates credit funds to be tilted towards small and medium-sized enterprises, the restrictions imposed by banks on the textile and garment industry have not changed. From the perspective of the banking sector, the textile and apparel industry is a low-profit industry with overcapacity, and it is difficult to change its view in the short term.
But there are also positive signals – Xiao Haotian, deputy director of the Foreign Affairs Office of Dayong Town, Zhongshan, said that some financial institutions in Guangdong have penetrated to the township level, improving the corporate financing environment. Each town has an unsecured loan limit of 50 million, as long as the chamber of commerce guarantees it. This�This measure solves the problem of insufficient influence of guaranteed loans for small and medium-sized enterprises.
During the Spring Canton Fair, the pilot regulations for RMB settlement were introduced. However, exhibitors still settled in US dollars, and to a small extent in euros and pounds. The companies surveyed basically do not use RMB for trade settlement. It is generally believed that European and American countries do not accept RMB settlement, but it can slowly penetrate into Hong Kong and Southeast Asia. Although RMB settlement pilot work has been carried out in five cities, the interviewed companies in Shanghai, Dongguan and other places said that they still do not know much about the specific implementation methods and operational details of the settlement pilot.
Policy controversy – tax rebate increase without profit, revitalization plan to be refined
Since 2019, the country has successively issued various policies to support the development of the textile and garment industry. The “Textile Industry Adjustment and Revitalization Plan” has clearly positioned the textile industry as a traditional pillar industry of our country’s national economy and an important people’s livelihood industry. It is also an industry with obvious international competitive advantages. So, how do companies respond to various national policies? Can relevant policies effectively reduce the burden on enterprises? Listening to the opinions and suggestions of enterprises on national and industry policies and understanding the enterprises’ response measures are also the key topics of this research team.
The survey results show that garment companies generally welcome the country’s four increases in the export tax rebate rate in the past six months. Many companies believe that this is also a measure to promote enterprises to promote exports and feel direct, and hope to increase the export tax rebate rate. Back to 17%.
Chen Weiyong, manager of Shanghai Textile (Three Guns), said frankly: The export tax rebate policy is too open, and the increase in the tax rebate rate has been reflected in the quotation, and it has become a better reason for customers to negotiate and demand price reductions. Therefore, the increase in the export tax rebate rate will have little impact on the overall profitability of the company.
Companies such as Zhejiang Hualian Group Co., Ltd. and Ruidon Outdoor Sports Goods (Xiamen) Co., Ltd. agree with the view that “the effect of export tax rebates is average.” At the same time, some companies also mentioned that several changes in the export tax rebate rate within a year have caused great trouble to the company’s quotations. Because the completion process of an order usually takes about 4 months, frequent tax rate changes are not conducive to enterprise quotations. Even if the industry’s exports recover in the future, the country should maintain the stability of the export tax rebate rate.
It is worth noting that enterprises unanimously recommended that the country adopt appropriate policies to maintain exchange rate stability and predictability of exchange rate trends. “This is important for stabilizing enterprise exports.”
After the “Textile Industry Adjustment and Revitalization Plan” was released, relevant people analyzed that textile enterprises are expected to become the industries that will benefit most from the top ten industrial revitalization plans. During the survey, most of the companies interviewed expressed confidence in the promulgation of the “Plan”, but their expectations and understanding of the plan are not high, and clothing companies are less enthusiastic about applying for technological transformation. Some companies also bluntly stated that short-term planning cannot solve a series of urgent problems they face.
Industry insiders who participated in the survey said that overall, the relevant industry development issues and adjustment and revitalization measures involved in the plan are basically in line with the current situation and development direction of the enterprise. Enterprises generally hope that the measures can be refined and implemented. . In addition, considering the full marketization of the textile and apparel industry, brand building, technology research and development investment and other issues, relying solely on corporate promotion is very weak and needs to be jointly promoted at the national and industry levels.
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, please contact us and we will change or delete it as soon as possible.
AA
