Sluggish garment exports, domestic demand fills the gap

by mttason31 on 2009-11-23 00:59:41

More than half a year, the various economic indicators of the industry that were highly concerned by the industry have been announced one after another. Relevant data shows that compared with other industries, the textile and apparel industry has already shown signs of recovery first. In the first half of the year, my country's textile and garment exports were still in negative growth, but the decline narrowed in June. In sharp contrast to the sluggish export was that domestic sales growth became the main support for the whole industry to stabilize and recover.

It will take some time for exports to recover. The latest statistics from the General Administration of Customs show that in June, China's textile and garment exports amounted to 13.947 billion US dollars, down 10.13% year-on-year. Of which, textile exports amounted to 4.911 billion US dollars, down 13.06% year-on-year; garment exports amounted to 9.036 billion US dollars, down 8.46% year-on-year. From January to June, the cumulative export of textiles and garments in our country amounted to 72.794 billion US dollars, down 10.88% year-on-year, less than the 21.8% drop in overall foreign trade exports. Relevant personnel of the China Chamber of Commerce for Import and Export of Textiles said that there is still room for development for our textile and clothing products in the international market, and the several adjustments of the export tax rebate rate by the state also promoted exports to a certain extent.

My textile industry has a high degree of external dependence, and the export market largely depends on the global economic recovery. In March this year, benefiting from the increased purchase volume due to low inventory in the overseas market, the export of my country's textile and clothing appeared to grow for the first time. However, the subsequent export decline gradually widened, reaching 1.07% in April, 14.95% in May, and 10.13% in June.

Although textile and garment exports are in a state of negative growth, their international competitiveness is still improving, and the international market share remains stable. From January to May, the share of China's textile and garment exports in the US import market increased by 3.75 percentage points; the industry's trade surplus increased by 11.58% year-on-year, and the export competitiveness coefficient increased by 1.22 percentage points over the same period last year.

Wang Jinquan, editor-in-chief of the First Textile Network, said that the weak external demand caused by the financial crisis has kept my exports in negative growth. In addition, buyers in Europe and the United States are increasingly aggressive in pressing prices, and price-cutting competition in the industry is becoming increasingly fierce. The export average price of some products has dropped by more than 10%, and even the situation of "goods transported on ships, sales halved" has occurred. A person in charge of a Jiangsu textile enterprise reflected that after the buyer replenished a certain amount of inventory at the beginning of the year, he slowed down the purchasing pace, causing the company's export data in the second quarter to be "not good-looking". Wei Wei of the Marketing Department of Shanghai Xieda International Trade Co., Ltd. said that the export situation of the company in the second quarter was better than that in the first quarter. She revealed that the government raised the export tax rebate rate for textiles and clothing twice on February 1 and April 1. In order to maintain business and retain customers, the company actively or passively made concessions in price.

Compared with the continued decline in exports, the growth in domestic sales has become the main support for the stabilization and recovery of the entire industry. The data provided by the China National Textile and Apparel Association shows that the domestic sales value of the textile industry continues to grow. From January to May, the cumulative domestic sales value realized by enterprises above designated size reached 1,053.247 billion yuan, up 9.42% year-on-year, an increase of 2.79 percentage points from the end of February. The proportion of domestic sales in the industry rose from 77.07% of the same period last year to 80.03%. The pulling effect of domestic demand on the steady recovery of the industry is constantly increasing. The growth rate of domestic clothing consumption is very encouraging, rising from 15.6% in the first quarter to 22.1% in May, exceeding the national retail total growth rate of 21.6%.

The data shows that in the first five months, enterprises above designated size in China's textile industry realized a profit of 43.248 billion yuan, down 0.14% year-on-year, narrowing by 10.87 percentage points from January to February. The total profit from March to May increased by 5.06% year-on-year. Among the 50,000 enterprises above designated size nationwide, 32% of the enterprises saw their total sales increase by 11.28%, higher than the industry average, and their total profit increased by 34.23%, once again proving the importance of technological competitiveness and brand contribution rate.

Relevant personnel of the China National Textile and Apparel Association analyzed that the warming of the textile and apparel industry depended on the overall stability of the domestic sales market. Affected by the financial crisis, many foreign-funded companies withdrew. These foreign-funded companies lost some stores and transferred them to agents to operate, giving some companies doing domestic sales a chance to develop. On the other hand, after the export was blocked, some enterprises began to turn to the domestic sales market. The economic stimulus package introduced by the government played a role, and many enterprises' domestic sales business was extraordinarily prosperous.

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