Textile And Clothing Export: What Is The Turning Point?

According to the latest statistics from China Customs, in February this year, the import and export volume of textiles and garments decreased by 7.2%, of which 10 billion 290 million US dollars were exported, which decreased by 8.4%. This is the first time that monthly exports have been negative since March 2007. From the main export camp, the top five provinces and cities in February all declined, and the monthly decline in Guangdong and Shanghai was over 20%.

Meanwhile, textile and apparel exports totaled 25 billion 620 million US dollars in 1-2 months, an increase of 9.7%, an increase of 9.2 percentage points lower than that of last year, only half of last year's growth level.

"Due to the further deepening of the subprime mortgage crisis in the United States, the implementation of tight monetary policy, the acceleration of RMB appreciation, the rising prices of production factors such as energy and labor force, the adjustment of processing trade restrictions and the export tax rebate rate reduction, and the uncertainties in the international market, led to a sharp fall in China's textile and clothing exports in 1-2 months."

Recently, Cao Xinyu, vice president of the China Textiles Import and Export Chamber of Commerce, said.

At the same time, the overlap of the above factors has made the textile and garment export situation unprecedentedly severe this year, and the export of textile and clothing is facing more complicated situation.

Internal and external compression of exports

In order to reduce the trade surplus, in 2007, the Chinese government adjusted the foreign trade policy comprehensively, narrowing the surplus and expanding the import policy orientation, replacing the export oriented foreign trade strategy for many years, further reducing the export tax rebate rate, improving the threshold of processing trade, and increasing the intensity of environmental protection and energy saving measures.

"These measures are beneficial to the development of the economy in the long run, but enterprises will have to face the burden in the short run."

Sun Huaibin, director of China Textile Economic Research Center, said.

But these factors are not the main ones. The continued appreciation of the RMB, especially the rise in the US dollar exchange rate, is the biggest practical difficulty for textile exporting enterprises.

Despite certain expectations for the appreciation of the renminbi, some negative effects were also resolved through positive order negotiations and internal adjustment. However, according to the data from the textile industry association, in 2007 1-8, the profits of Enterprises above Designated Size in the textile industry were reduced by about 9 billion 600 million yuan, and the total industry profit loss was about 30 billion 600 million yuan.

Secondly, due to the impact of the subprime crisis, the US economy is plunged into recession, consumption capacity has declined, and orders from the United States have decreased significantly, especially the export of high-end textile and apparel to the US.

Export data in February further confirmed the weakness of China's textile and apparel exports to the US, and exports to the US fell 16.3% in that month, while the total exports in the first two months dropped by 7.5%.

Shandong is a large export oriented textile enterprise with an annual income of 5 billion yuan. Because of the appreciation of RMB, it directly affects 109 million yuan in 2007. The profit in 2007 of this year is 31 million 850 thousand yuan, resulting in the profit margin of enterprises decreasing from 3% in 2007 to 1% in February this year.

In the interview, reporters found that, because of the inability to predict the speed of RMB appreciation, many enterprises were afraid to take orders easily, and some enterprises had to take the lead in order not to stop production, or even to bear the pressure of losses.