Factors Affecting Industry Development And Trade Trend This Year

The factors affecting the industry development and trade trend this year include:

1, the expectation of RMB appreciation is the biggest uncertainty that restricts exports.

The appreciation of the RMB is too fast and unpredictable, squeezing the profit margins of enterprises and affecting the confidence of enterprises in receiving medium and long term orders.

After entering 2008, the RMB appreciation rate accelerated. As of February 29th, in the short 2 months, the central parity of the RMB against the US dollar has hit 18 new highs, reaching 1 yuan to 7.1058 yuan, and the appreciation rate of RMB has reached 2.6%, which is nearly 40% of the appreciation in 2007.

Businesses are under a lot of pressure.

At present, the export dependency ratio of textile industry is over 30%, and the dependence degree of garment industry is as high as 60%.

According to the relevant departments estimates, the RMB appreciation of 1% per cent, the clothing industry sales profit fell by 1-4%.

The overall profit margin of the textile industry is only maintained at around 5%, and the appreciation of the renminbi is bound to offset some of the profits, so that the profit margins that the enterprises have not been further compressed are further compressed.

2, tight monetary policy makes enterprises face financing difficulties.

The central economic work conference decided to implement tight monetary policy in 2008. Financing for enterprises will be very difficult, and the cost of financing will be further increased. The survival of SMEs will be tested.

3, the implementation of the new labor law will accelerate the increase of labor costs.

Due to the implementation of the new labor contract law, enterprises' behaviors in employment, wages, insurance, compensation and other aspects have been standardized, and the interests of workers have been protected to a greater extent.

According to the enterprise estimate, after the implementation of the new labor law, the increase of wages, benefits and related expenses will increase the cost by 20 - 40%.

4. The rising cost of producing goods caused by inflation expectation will aggravate the burden of enterprises.

At present, enterprises feel that the rising cost of domestic industry is the biggest factor affecting exports.

As CPI prices rose for several months and the price level rose, the prices of major production materials showed a further upward trend, and the shortage of individual products appeared.

5, the uncertainty of the US due to the expiration of my quota limitation.

The Sino US textile agreement is due to expire in January 1, 2009. What kind of management measures will be adopted next year for us textile and garment exports? The industry is very concerned about this.

2008 is the year of election in the United States. There is a big uncertainty in the US policy toward China. The agreement between China and the United States on textile trade is unknown. If the relevant management methods can not be released in time, it is not optimistic that exports to the US will be optimistic in the second half of this year.

6, the impact of the US subprime crisis intensified, triggering a slowdown in the world economy and a decline in consumption growth in major economies.

The United States is the world's largest importer and the second largest export market in China. The slowdown in the US economy will have a direct impact on China's exports.

Experts believe that every 1 percentage point drop in the US economic growth rate will have a 4 percentage point impact on China's trade exports.

At the same time, the US economic recession will drive the growth of other major economies to slow down and consumption decline, which may lead to the rise of trade protectionism and increase the occurrence of trade frictions.

In addition, the textile industry of India, Pakistan, Vietnam, Kampuchea and other neighboring countries has been rising rapidly. If China's long-term competition continues, the competitive advantage and foreign orders of China's low-end products will gradually be lost, while the middle and high-end products are still in the initial stage of cultivation, and they will also be attacked by the developing countries.

Combined with various factors, the export situation of China's textile and clothing industry in 2008 is grim. It is estimated that export will continue to grow in the whole year, but the growth rate will obviously slow down.