Cost Increases "Zero" Profit Of Garment Enterprises

According to customs statistics, Zhongshan exported $90 million of textile and clothing in 1-10 this year, an increase of 15.5% over the same period last year (the same below).

As a traditional export industry in Zhongshan, textile and clothing are not only exported large quantities, but also many SMEs in their industry.

According to customs statistics, textile and clothing exports increased in the same month in October, but export value declined for 4 consecutive months.

Since the beginning of this year, the textile and clothing exports in Zhongshan have increased except for a slight decrease in March.

In June, the export value of US $257 million in the month ended in a 4 month decline in the first consecutive year, and 198 million US dollars in October, an increase of 21.6% compared with the same period last year, a decrease of 12.6%.

Although textile and clothing are traditional industries, according to the latest data, the general trade accounts for half of the industry, and the increase is greater than that of processing trade.

In the same period, the total value of import and export of processing trade in Zhongshan accounted for 66.6% of the total value of Zhongshan's foreign trade imports and exports.

According to the analysis of the industry, this change occurs. On the one hand, the government and departments in Zhongshan are trying to promote the pformation of the processing enterprises, and several large garment processing enterprises have been successfully pformed. On the other hand, many textile and garment enterprises have begun to take the road of brand after the financial crisis, and have abandoned the simple three way trade.

In addition, according to statistical data, the emerging market of garment export in Zhongshan is showing a rapid growth momentum.

In 1-10 months, Zhongshan exported 760 million, 440 million and 470 million dollars to Hongkong, the European Union and the United States respectively, 10.8%, 14.7% and 33.9% respectively. The total export market share accounted for 79.9% of Zhongshan's total textile and garment exports in the same period.

Over the same period, Zhongshan exported 26%, 67.9% and 18.7% to textile, clothing and 48 million, 58 million and 0.21 dollars respectively for ASEAN, Latin America and Africa.

This year, with the gradual recovery of the European and American markets, consumer confidence has recovered. The demand for Chinese textile and clothing in the European and American markets has increased considerably compared with the period of the financial crisis. In addition, the policy of "adjustment and revitalization of the textile industry" issued in 2009 and the policy of raising the export rebate rate were gradually brought into effect. The export environment of textile and clothing was effectively improved, and the export of textile and clothing in Zhongshan continued to grow this year. However, in the past 4 months, the export value continued to decline.

Zhongshan customs analysts believe that the rapid appreciation of the renminbi, the rapid rise in cotton prices, the possibility of export price increase is almost zero, and other factors, some garment enterprises appear "the more we do the more, the more we lose", so that some garment enterprises stop making orders to reduce losses.

In view of the current predicament of textile and garment enterprises, customs experts suggest that enterprises should establish a more perfect risk management system to implement effective price monitoring for cotton and other major textile raw materials. In addition, while striving for the market for foreign demand, enterprises should make up for the loss of overseas business caused by RMB appreciation and trade friction through expanding domestic market.