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    Textile Industry: Export Rebound From Strong To Robust

    2010/8/21 16:10:00 21

    Textile Industry Export

    The General Administration of Customs of China issued an import and export newsletter in August 10th: in July 2010, China's textile and apparel exports totaled 20 billion 795 million US dollars, up 27.01% over the same period last year, of which total textile exports amounted to US $7 billion 191 million, an increase of 35.09% over the same period last year, and clothing exports totaled US $13 billion 604 million, an increase of 23.12% over the same period last year.

    1-7 months, China

    Textile and clothing

    Total exports increased by 22.94%, of which textiles

    Export cumulative

    An increase of 32.74%, and clothing grew by 17.33%.


    Comment on events:


    Industrial exports increased substantially in July, but

    Rebound dynamics

    Somewhat weakened.

    The strong rebound in exports has pushed the total export volume to the highest level in 2008, and the value of exports in the 1-7 months has reached the highest level in recent years.

    Industry exports continued to expand significantly in the early stage, while the rebound intensity weakened. In July, the export growth rate of industry decreased by 6.8 percentage points compared to June, and the growth rate of textile and clothing decreased by 9.34 and 4.96 percentage points respectively.

    The data of textile and clothing excluding seasonal factors were -4.48% and -2.24% respectively, lower than 3.37% and 2.95% in June, which means that the impact of driving export rebound was weakened in July.


    The driving factors for the recent strong rebound in exports are foreign demand for replenishment, appreciation of the renminbi and rising cost, which are expected to move forward.

    Although the existence of low base in the same period in 2009 has a certain impact on the recent export trend of industry, the revival of foreign demand and lower inventory are the fundamental reasons for the rebound in exports.

    Since 2010, the recovery of apparel retail in the US, Europe and Japan and the low inventory level have increased the country's demand for textile raw materials and clothing, and the expectation of appreciation of the renminbi and the rising cost has prompted the advance of export orders to add to the icing on the cake.


    Strong rebound is not sustainable.

    In the near future, the demand for replenishment of foreign stocks is a fundamental reason for the promotion of industrial exports. Under the condition of constant growth in foreign consumption, low inventory level will encourage foreign enterprises to have a continuous replenishment demand.

    However, the price trend of cotton both at home and abroad shows that the gap between Chinese and foreign cotton prices has expanded dramatically since April. The rise of raw material costs has weakened the price advantage of Chinese textile and clothing products, and prompted foreign orders to shift to major competitors such as India and Pakistan. On the other hand, China's exporters have been attacked by compressing profit margins.

    At the same time, the existence of RMB expectation factor only changes the time distribution of orders and does not change the total amount of orders. Therefore, as time goes on and the expectation of RMB appreciation is realized, the total amount of orders will decline year by year.


    The strong rebound in the export season laid the foundation for export growth throughout the year, and the uncertainty behind the expected data increased.

    Behind the recent expected export figures, the twists and turns of the external economic recovery, the improvement of the export base in the fourth quarter of 2009, the price trend of new cotton listed in 9-10 and the fluctuation of the RMB exchange rate will become an unstable factor affecting the export of the industry.

    We believe that the pressure of industrial exports in the fourth quarter of 2010 will increase, and the growth rate of industrial exports is expected to remain within 15%-20% in 2010.

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    Textile And Garment Exports Face A Risk Of Falling After Exceeding Expected Growth

    In 1-7 months, China's textile and garment industry achieved a total export volume of US $109 billion 667 million, representing an increase of 22.94% over the same period last year, and its growth rate continued to climb at a high level. In July, exports of textiles and clothing increased by 27.01% over the same month, rising by 11.41% compared to the same period, and export performance was still relatively strong. However, it was also seen that the growth rate of the chain was declining.

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