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    Difficulties In Textile Exports

    2008/5/13 15:26:00 31

    Difficulties In Textile Exports.

    Affected by the weak external market, RMB appreciation and a series of export policy adjustments, China's textile and other labor-intensive goods export growth slowed down significantly, and the proportion of total exports declined.

    This trend continues in 2008.



    Objectively speaking, changes in the export situation of labor-intensive goods represented by textiles play a certain role in promoting the adjustment of industrial structure, and are consistent with China's industrial policies and trade policy orientation.

    But at the same time, the relevant industries in China will also face greater pressure, and the possibility of increasing and absorbing employment growth will be significantly increased.



    Therefore, how to assess the possible impact of the textile export situation on the development of related industries in China and reasonably grasp the direction and pace of industrial restructuring is becoming a hot issue of general concern.



     

    Textile export situation is grim



    In the first quarter, customs statistics showed that exports of textiles (including clothing) totaled 36 billion 420 million US dollars, an increase of US $6 billion 60 million over the same period last year, an increase of 19.9%.

    Through field research, it is found that this year's textile exports are facing a grim situation.

    Specifically, there are three reasons:



    First, the growth rate calculated according to the export amount does not accurately reflect the market demand change of the physical quantity of goods; from the perspective of domestic production, the demand growth of export commodities has obviously slowed down.

    Since the end of 2007, the global inflation rate has increased rapidly, and the textile price in the international market has also entered a continuous upward track.

    According to customs statistics, from December 2007 to February 2008, China's textile import prices increased by 2.6%, 13.8% and 14.4% respectively, while the export prices of the same period also increased by 4.4%, 8% and 12.3% respectively.

    Therefore, the export growth rate calculated in US dollars includes the influence of price rising factors, and the actual number of goods is not so high or even reduced.

    For example, in February this year, the volume of textile exports decreased by 18.1% in real terms, and the volume growth in the first quarter was only around 14%, far below the growth level of trade volume, which was relatively low in recent years.



    Two, the growth rate of US dollar valuation overestimated the growth level of domestic enterprises' sales revenue.

    Against the backdrop of the appreciation of the renminbi, the export growth rate calculated by US dollar will increase correspondingly.

    In the first quarter, the RMB appreciated by 4.2% against the US dollar. In terms of Renminbi, the growth rate of textile exports during the same period was not 19.9%, but 15.1%.

    For manufacturing enterprises, sales revenue has increased by 15.1% over the past few years.



    Three, the lag reaction of export to price rise and RMB appreciation will gradually appear.

    As there is a certain time difference between the export of the signed products and the actual customs clearance, the export of the current point reflects the demand for orders at a lower price in the case of a straight rise in the price and the local currency. The impact of market demand will be reflected gradually as the price increases and the order is reduced.

    For example, since the end of 2007, the upward trend of price and exchange rate has obviously accelerated, and many export enterprises reflect that it is very difficult to get orders for 1 quarters or half a year.

    Therefore, the growth rate of exports will drop significantly in the coming period, and the possibility of negative growth will increase.

    It is estimated that the growth rate of textile exports will reach 10% in 2008, down 10 percentage points from the previous year.



    Meanwhile, the growth rate of textile exports in the first quarter has been lower than the average growth rate of 21.8% of China's exports during the same period, resulting in a 0.14 percentage point decrease in total exports compared with the same period in 2007.

    In fact, this trend appeared in 2007.



      

    Multiple factors lead to export difficulties



    The slowdown in textile exports this year is complicated and complicated.



    First of all, the external market demand tends to be weak.

    China's textile exports, which account for nearly 25% of the world's exports, are bound to be affected by the global market, especially the depressed demand in the US market.



    Second, the appreciation of the renminbi increases the cost of export products.

    Since the reform in July 2005, the RMB has appreciated by 18% against the US dollar, especially in the 1 quarter of 2008, with the appreciation of RMB 4.2%.

    As China's exports are mostly denominated in US dollars, the appreciation of the renminbi has led to a decline in China's export competitiveness and a marked slowdown in the volume of exports.



    Third, domestic production costs are rising.

    With the continuous rise of global energy and raw material prices, the production cost of domestic enterprises has increased significantly.

    Taking the import price of crude oil and cotton as an example, it increased by 55.6% and 11.6% respectively in January 2008, and increased by 62.3% and 15.3% in February.

    Import prices of other textile materials have also been generally raised.

    In addition, the increase in domestic labor costs has also increased the upward pressure on production costs of labor-intensive enterprises.



    Fourth, the effect of policy adjustment is gradually emerging.

    Since 2006, the state has adjusted the processing trade and export tax rebate policy for many times in order to alleviate the excessive pressure on the current account surplus and curb the rapid growth of exports of "two high and one capital" products.

    Among them, the export tax rebate rate of textile and clothing has also been reduced many times. For example, in July 2007, the tax rebate rate of clothing dropped to 11%, and the impact on the slowdown of clothing export was obvious.



    Fifth, trade barriers.

    Under the background of economic slowdown, trade protectionism in various countries is clearly rising. China's textile exports will face more trade friction.

    The US textile restrictions on China are still being implemented, and the intensity of supervision and other restrictions will probably increase.

    Since January 2008, the EU restrictive measures for the 10 categories of textiles to China have ended, but under the pressure of market pfer and intra regional trade protection, the restrictions on Chinese textiles will still be strengthened through various means.



    Then there are domestic natural disasters and infrastructure factors.

    The freezing rain and snow disaster happened in the south of the beginning of this year has caused great damage to the power grids and pportation corridors. As of the end of April, some power supply capacity of the power grid has not yet been fully recovered. Many enterprises in Dongguan, Guangdong, can only get the electricity supply at the level of "three stops and four" at present, and the operating rate is seriously insufficient. Self generating electricity also leads to an increase of 2~3 times the cost of electricity price, which is unbearable for enterprises.



    There is no lack of structural adjustment effect.



    Represented by textiles

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