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May 8Th March Mainland China'S Clothing Exports Serious Decline Report

2010/5/8 16:16:00 23

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In March (2010), the amount of garment exports in mainland China declined sharply compared with the same month last year.

However, according to the survey data of China's Purchasing Managers 1 (Index), PMI in March this year, the export orders in mainland China have been very strong, but facing the sharp rise in production costs and the possible appreciation of the renminbi, the export performance of the mainland garment industry in the first quarter of this year is inferior to that of other industries.

According to customs statistics from mainland China, the export volume of garment exports in mainland China in the first quarter of this year amounted to US $24 billion.

In March, the export volume declined by nearly 20%.

In contrast, mainland China

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Exports of goods remained strong in mainland China this March.

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The export volume increased by 6.7%, but the increase was far below the 78% increase in February.

The amount of garment exports in mainland China dropped by 19.9% in January, and in February it surged by nearly 100%.

Losing competitiveness?

The performance of garment exports in mainland China in March this year will be the first warning of the loss of some competitiveness in mainland China.

But according to the latest indicators, export orders in mainland China have rebounded in the past few months.

In March this year, China's garment industry Purchasing Managers 1, Index, PMI index exceeded 60%, this is a very strong performance.

The PMI index is based on a survey conducted by 700 manufacturing companies covering all industrial sectors in mainland China.

Exhibition on May 1st

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The Canton Fair for clothing products will probably be right.

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Demand for goods and garments has increased.

Mainland China is facing global challenges in the past year.

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Under the pressure of price competition, the price is lower.

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This year, exporters in mainland China will turn more clearly to higher export quality.

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To reflect the current sharp increase in production costs:

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Rising prices of raw materials: the cost of raw materials for garment manufacturers has been rising gradually since the beginning of this year.

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Cotton and polyester prices rose by 10%, while the first quarter cotton prices rose sharply by 15%. In addition, mainland China will soon be faced with a shortage of cotton, causing domestic and international cotton prices to rise further.

Labor costs are rising: the shortage of labor from other countries has made the production and growth of some industries of the textile and garment chains in China Limited. In addition, in order to recruit workers, the wage increase has reached 30%, but the cost of textiles and clothing factories has gradually returned to normal as the cost of production has risen sharply.

The renminbi will appreciate: RMB may rise in July 1st, and appreciation of the renminbi will reduce import costs and help curb inflation in mainland China. However, according to the so-called "stress test" in mainland China over the past month, the export of textiles and garments in mainland China will be hit hard.

Once the RMB appreciates, the textile and garment industry in mainland China will probably be the most influential industry in all industries.

Textile policy

The mainland authorities have made it clear that in order to reduce production costs, it is in line with its domestic and international levels.

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The new environmental regulations require that the domestic textile industry should accelerate investment in advanced and clean technologies.

In addition, in order to reduce production costs, factories located in coastal provinces should be relocated to the central and eastern provinces quickly, so as to take advantage of their low wages.

In this regard, progress has begun a few years ago, but it still takes years.

Meanwhile, at present, Li Feng Group, the largest trading buyer in Asia, recently warned that supply chains in mainland China could be damaged.

Mainland China is investing heavily in new pport infrastructure, mainly in terms of railways, which should help promote the westward shift of China's textile industry.

Where does the textile industry go?

Compared with other industries, the Chinese mainland government can also decide to let the textile and garment industry further decline.

According to official figures, the production of value-added textiles and clothing industry in mainland China has increased by 12.5% in the first quarter of this year, but its growth rate is still slower than other industries.

In the past year, the Chinese mainland has provided export subsidies in order to curb the decline in sales of textiles and clothing. Now the measures may be phased out, which will result in the export of its textiles less competitive.

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