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    The Impact Of China'S Textile And Clothing On European Exports

    2010/5/31 17:11:00 125

    Foreign Trade | Ministry Of Commerce

       "The European sovereign debt crisis will have a serious impact on China's foreign trade. It is expected that in May and June, and even in the whole third quarter, the performance will be relatively obvious, and the growth rate of China's exports to Europe may decline by 6% to 7%."


    Huo Jianguo, president of the Research Institute of the Ministry of Commerce, told reporters recently.


    The reporter found in the interview that textile enterprises that have not recovered from the financial crisis will again be hit by the European debt crisis. However, from the current situation, the market believes that this blow will not reduce the export of the whole industry to the level of early 2009.


    According to the latest data released by the Ministry of Commerce, in 2009, the total amount of textiles and raw materials imported from China by the 27 EU countries reached US $42.832 billion, despite a year-on-year decline of 6.2%. China has become the largest source country of textiles and raw materials imported from the 27 EU countries, and the amount of textiles and raw materials imported from China accounted for 41.1% of the total amount of EU imports.


    European and American markets have always been the largest export destination of China's textile and clothing. According to the data from the First Textile Network, in recent years, the share of China's textile and clothing exports to Europe has remained around 20% of the total.


    "In the export of the whole industry, orders settled in dollars account for 70%, while those settled in euros only account for 30%. The average settlement in dollars of textile and clothing exported to the EU is 30%." Kong Jun, an analyst with CIC Securities, told reporters that from this perspective, the impact of the European debt crisis on export textile enterprises will not be as great as that of the United States when the financial crisis first occurred.


    "Our products are exported to the European market, mainly settled in US dollars, but not in euros," Jia Xiaobin, deputy general manager of Tongniu Group, told reporters.


    "Recently, I was extremely depressed. My clients are all those countries under the debt crisis: Spain and Portugal. Since I placed the order in March, there has been no new order," complained a foreign trade businessman.


    Many enterprises with competitive products have begun to prepare for future shocks. Jia Xiaobin told reporters that at present, the company is talking with European customers about raising the price of products.


    Wang Qianjin, chief analyst of First Textile Network, said that on the one hand, the devaluation of the euro means that textile enterprises should pay more attention to the macroeconomic aspects of the European market, such as the consumption rate and unemployment rate. Since this year, the European market has been weaker than that of the United States. In the first quarter, the average growth rate of exports to Europe was 16.8%, 5 percentage points lower than that of the US market.


    At present, China's textile and garment exports to Europe are mainly to Germany, France, Italy and other countries. Export enterprises are worried that the European debt crisis will further spread to these countries in the future. Industry insiders believe that what enterprises need most is orders, followed by reducing cost pressure. Recently, the market reported that the National Development and Reform Commission will issue an import quota of about 1.1 million tons of cotton in the near future to alleviate the pressure of high domestic cotton prices.


    River whirl


    "The European sovereign debt crisis will have a serious impact on China's foreign trade. It is expected that in May and June, and even in the whole third quarter, the performance will be relatively obvious, and the growth rate of my exports to Europe may decline by 6% to 7%." Huo Jianguo, president of the Research Institute of the Ministry of Commerce, told reporters recently.


    The reporter found in the interview that textile enterprises that have not recovered from the financial crisis will again be hit by the European debt crisis. However, from the current situation, the market believes that this blow will not reduce the export of the whole industry to the level of early 2009.


    According to the latest data released by the Ministry of Commerce, in 2009, the total amount of textiles and raw materials imported from China by the 27 EU countries reached US $42.832 billion, despite a year-on-year decline of 6.2%. China has become the largest source country of textiles and raw materials imported from the 27 EU countries, and the amount of textiles and raw materials imported from China accounted for 41.1% of the total amount of EU imports.


    European and American markets have always been the largest export destination of China's textile and clothing. According to the data from the First Textile Network, in recent years, the share of China's textile and clothing exports to Europe has remained around 20% of the total.


    "In the export of the whole industry, orders settled in dollars account for 70%, while those settled in euros only account for 30%. The average settlement in dollars of textile and clothing exported to the EU is 30%." Kong Jun, an analyst with CIC Securities, told reporters that from this perspective, the impact of the European debt crisis on export textile enterprises will not be as great as that of the United States when the financial crisis first occurred. {page_break}


    "Our products are exported to the European market, mainly settled in US dollars, but not in euros," Jia Xiaobin, deputy general manager of Tongniu Group, told reporters.


    "Recently, I was extremely depressed. My clients are all those countries under the debt crisis: Spain and Portugal. Since I placed the order in March, there has been no new order," complained a foreign trade businessman.


    Many enterprises with competitive products have begun to prepare for future shocks. Jia Xiaobin told reporters that at present, the company is talking with European customers about raising the price of products.


    Wang Qianjin, chief analyst of First Textile Network, said that on the one hand, the devaluation of the euro means that textile enterprises should pay more attention to the macroeconomic aspects of the European market, such as the consumption rate and unemployment rate. Since this year, the European market has been weaker than that of the United States. In the first quarter, the average growth rate of exports to Europe was 16.8%, 5 percentage points lower than that of the US market.


    At present, China's textile and garment exports to Europe are mainly to Germany, France, Italy and other countries. Export enterprises are worried that the European debt crisis will further spread to these countries in the future. Industry insiders believe that what enterprises need most is orders, followed by reducing cost pressure.


       Recently, the market reported that the National Development and Reform Commission will issue an import quota of about 1.1 million tons of cotton in the near future to alleviate the pressure of high domestic cotton prices.

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