Textile Industry Expects Foreign Trade Freezing Point Melting

When many foreign trade enterprises have not yet been able to breathe in the past year, the calendar has been turned into this year. Many uncertainties still exist, while the European and American economies are still in decline.

The foreign trade data released by Customs Department a few weeks ago showed that imports and exports decreased by 17.9% and 2.2% respectively in November last year, the first negative growth since February 2005 and since June 2001.

The "cold winter" of China's foreign trade really comes.

At present, the six major factors directly affect the foreign trade this year: the continued deterioration of the US and European economies leads to a decrease in China's export orders; the risk of a devaluation of the US dollar makes Chinese enterprises afraid to take up large orders or long lists; trade protectionism is aggravated and trade barriers increase; foreign financial institutions or enterprises are closed down, causing domestic enterprises to increase the risk of foreign exchange collection; the situation of raw material price fluctuation is hard to predict; and domestic SMEs are facing difficulties in financing.

The two big suspense of "cold winter" and "melting point" of foreign trade are still dependent on international market demand.

If the economic recession in Europe and the United States is becoming more and more severe, and even the demand for emerging markets is decreasing rapidly, then China's import and export is still hard to say this year.

Pessimism from the Ministry of Commerce's report to the analysis of major investment banks, from research institutions to foreign trade enterprises, it is hard to find optimistic and positive forecasts for China's foreign trade this year.

In November last year, the Ministry of Commerce issued a report on China's foreign trade situation (autumn 2008), which suggests that the deterioration of the international economic situation may further deepen China's import and export.

Last year, foreign trade data have not yet been released.

The NDRC forecast last month that total import and export volume exceeded US $2 trillion and 500 billion last year, an increase of over 15%, with a surplus of more than US $280 billion, an increase of more than US $18 billion over the same period last year.

In the eyes of the outside world, this situation of high surplus and high export will end with the past year.

This year's economic forecast report released by international investment bank Merrill Lynch said that as the financial crisis intensified and global growth slowed down, global exports will weaken in the next two years, and the global export boom of more than 10 years will come to an end.

This reminds us of China's last export negative growth.

In the first 5 months of 2001, exports increased by 11%, much lower than the 27.8% growth rate in 2000.

At that time, through a series of reforms in the foreign trade system and the recovery of the US economy, China's exports gradually entered an upward path.

Most importantly, China entered the WTO at the end of 2001.

Some experts pointed out that the severity of China's export situation is close to the Asian financial crisis in 1997, and the external environment is more severe.

Moodie, an international rating agency, issued a rating report last month, predicting that China's real GDP growth will slow to 7%~8% this year, because exports and exports of goods and services are expected to shrink by 2% this year, which will exceed the effect of fiscal stimulus to promote investment.

At present, the adverse impact of the global financial crisis on China's foreign trade seems to be higher than that of the 1997 Asian financial crisis or the 2001 US recession.

When the external environment is bad, it is also a time when China's foreign trade system reform or policy intensive comes out.

In 2001, the then Ministry of foreign trade and Economic Cooperation issued a circular that China will expand the opening of the trading rights of foreign investment enterprises, cancel the export approval system for many years, and implement the registration and approval system for import and export business rights for all kinds of ownership enterprises.

In response to the impact of the financial crisis on China's exports, the export tax rebate rate was adjusted 4 times in the second half of last year: the first time was mainly aimed at some textiles and clothing; the second aimed at some textiles, clothing and toys; the third time to raise the export tax rebate rate of some labor-intensive products, electromechanical products and other products with greater impact; the fourth time refers to mechanical and electrical products.

In addition, the suspension of processing trade restricted margin accounts, the "real pfer" policy, the processing trade restriction category and the prohibited catalogue adjustment policy have been promulgated, plus the SME financing policy, and foreign trade enterprises have fully felt the "spring" of the domestic policy environment.

How much can the policy effect play?

When will exports get warmer?

It is expected that the policy will start early in the first quarter of this year.

However, if the external environment continues to deteriorate, the effectiveness of the policy will be discounted.

Some Mechatronics giants say that policy adjustment helps exporters to reduce export costs and enhance international competitiveness. Enterprises can further optimize the industrial structure and pform the mode of economic development.

JP Morgan said in a quarterly forecast report that the adjustment of foreign trade policy can only help enterprises maintain moderate growth.

In the first half of this year, global economic growth will slow down, which will lead to a decline in China's exports and export growth of only 3% over the same period this year.

In the suspense of foreign trade, the price factor has weakened. The inflation situation has changed since the beginning of the year, and global raw material prices have entered the downward channel.

The General Administration of Customs recently issued a commentary on early warning commodities in November last year.

The import volume of iron ore rebounded to 32 million 520 thousand tons in the same month, though it was the first negative growth last year, but the average import price continued to drop to 122.7 US dollars / ton in that month, an increase of 8.6% compared with the same period last year, while the ring ratio decreased by 11.7%.

The average monthly import price of soybeans fell continuously, and the import price was $509.3 / ton in that month, down from the beginning of last year.

Last month, the State Council executive meeting set up a stable foreign trade policy and measures mentioned that expanding imports of domestic demand products.

We will increase imports of advanced technology, key equipment and components, as well as important energy and raw materials.

In fact, in the context of stimulating domestic demand, imports will certainly increase, especially imports of raw materials, machinery and manufacturing will increase to a certain extent.

In the "cold winter" of foreign trade, what we can expect is that Chinese enterprises will seize the favorable opportunity for the decline of international raw material prices to promote the resumption of China's imports.

Editor in charge: Yang Jing