China'S Export Situation Is Hard To Reduce Textile Industry Profits

In the US retail chain MACY 'S, a large number of garments made in India, Vietnam and Bangladesh were produced in 2008. Most of the clothes sold in China were made in China two years ago.

Zhou Shijian, executive director of the China International Business Association, recently visited the United States and said that the Chinese textile industry was worried about the development of the US quota for China until the end of this year. The US has not listed China as the primary importer because of the appreciation of the renminbi.

In the US, under the influence of subprime mortgage, the major stores are offering a discount, and a $6-10 clothes can be seen everywhere.

In the first half of this year, thanks to the appreciation of the renminbi and the impact of US subprime mortgage loans, China's imports and exports to major trading nations changed. The volume of trade to the United States and Hongkong dropped significantly, with the US growth rate dropping by 4.8%, and the Hongkong growth rate by 15.5%.

The appreciation of the renminbi has seriously affected the export of Chinese garments.

In the first half of this year, the export value of China's garments and accessories was $49 billion 960 million, while exports grew by only 3.4%, down 18% from the same period last year.

Although the export value of yarns and fabrics reached 25 billion 220 million US dollars and grew by 9.8%, the Chinese textile import and Export Chamber of Commerce pointed out that this is just a representation, mainly due to the rapid development of the textile and garment industry in neighboring countries and the increasing demand for raw materials and semi-finished products in China. Therefore, this phenomenon actually means that the competition of China's textile and garment industry will become increasingly fierce.

According to the data of the textile clothing office of the US Department of Commerce, the number of textiles and garments imported from China in the first quarter of this year decreased by 1.68% and 7.74% respectively, while Vietnam's exports to the United States remained strong. The number of textiles and garments exported to the United States increased by 29.69% and 33.06% respectively. The number of textiles and clothing exported to India also increased by 0.54% and 1.72% respectively.

Although the market share of Chinese textiles and garments is still the highest in the United States, with the rapid increase in the cost of the "Chinese system", some orders have been pferred to other Asian countries, and the profits of Chinese enterprises are very small.

Many garment exporters say that the profits of a garment are usually only tens of cents, or even negative.

Some manufacturers say that the rapid appreciation of the renminbi has reduced the average profit of each export garment by 50 cents, making almost half the profit.

In 1990s, China's largest exporter of Woollen Textiles, Dalang Town, Dongguan, a processing export sweater could earn 30 yuan in 1990s, while the current profit is only about 1 yuan, and some orders even lose money.

According to the statistics of China Textile Industry Association, under the combined influence of various factors, the actual profit margin of 2/3's textile manufacturers is only 0.62%.

Improving product prices is one of the most commonly used methods in enterprises.

But in the global economic downturn, the cost of rising is not easy to pass on to overseas buyers.

Some enterprises say that this year, WAL-MART and other large purchasers are more vicious than before, while some small and medium-sized buyers are affected by subprime mortgage loans, which reduce the number of purchases to China.

Therefore, the price increase of labour intensive export enterprises may lead to the loss of orders.

Zhou Shijian suggested that China's top priority is to stabilize the exchange rate and other foreign trade policies, and the appreciation of the Renminbi should be slowed down.

Transformation and upgrading is necessary, but we need to push forward smoothly. In this process, the government should invest funds to support enterprise R & D and innovation.

meanwhile

In the adjustment of export structure, we should take market orientation as the main factor, not emphasize high-tech blindly, and prevent the shrinking market of labour intensive export products, which may lead to business failures and unemployment.

China's Ministry of Commerce issued the report on China's foreign trade situation in spring 2008, saying that since last year, the policies of some Ministry of commerce were to assist China in the pformation of foreign trade, and the cost of pformation needed to be paid. The enterprises in the Pearl River Delta and Yangtze River Delta did encounter problems, but this is a necessary process.

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