Expanding Domestic Demand In The Spinning And Weaving Industry And Never Loosening Exports

In 2009, China's foreign trade situation was extremely grim.

However, the fundamentals of effective demand in the international market have not changed. PPI's continued downward trend will ease the pressure on textile prices, and policy adjustments will improve the trade environment.

A correct understanding of these favorable factors will help us establish confidence in breaking through difficulties.

"We emphasize the need to expand domestic demand and not relax exports."

When Premier Wen Jiabao made a government work report at the two session of the eleven National People's Congress in March 5th, he pointed out that China will strive to maintain steady growth in foreign trade this year.

After analyzing the economic data in 2008, economists predicted at the beginning of the year: in 2009, the total volume of China's foreign trade imports and exports will show a sharp decline in the same period, and the total import and export volume of the whole year will be about 20% lower than that in 2008.

Among them, the total annual import decline may reach about 25%, and the total annual export volume will probably decline by about 17%, and the foreign trade situation is extremely severe.

The consumption structure is changing to the low end. According to statistics of the General Administration of customs, China's textile and apparel exports totaled 185 billion 165 million US dollars in 2008, and the growth rate dropped from 26.28% at the beginning of the year to 8.18%.

Among them, the total export of textiles was 65 billion 375 million US dollars, the total export volume of clothing was 119 billion 790 million US dollars, the growth rate was 16.60% and 4.10% respectively. The growth rate of textile exports was 1.6 percentage points faster than that of 2007, while clothing exports slowed down 16.80 percentage points.

Sun Ruizhe, vice president of the China Textile Industry Association, explained the industry economic situation in 2009. Although the growth rate of textile and clothing exports was falling in 2008, we should correctly understand the real situation of the basic aspects of China's textile industry, grasp the development trend of domestic and foreign textile industry and the change of consumption demand, and establish the development mode of China's textile and garment industry in view of the effective demand.

"We should have confidence in China's textile industry."

Sun Ruizhe analysis said that since 1990s, China's exports to the US and EU have been growing, and there has not been a particularly big fluctuation, while some other suppliers have been undulating, especially India, Pakistan and so on.

The European, American and Japanese markets, which account for more than 60% of the world's textile and apparel imports, have become dependent on Chinese textiles and clothing. This long-term dependence will not change easily due to the current financial crisis.

"In fact, the financial crisis has not changed the needs of people's necessities, but the consumption structure and consumption habits have been changed, which requires us to study carefully."

According to Sun Ruizhe analysis, the financial crisis has made major changes in the consumption habits and ways of purchase in these areas, and more entertainment expenses have been cut down. In the past, consumers who did not pay much attention to price were sensitive to price today.

The change in consumption habits has led to huge losses in department stores and high-end brand stores, and a popular discount shop like WAL-MART will benefit from it.

The shift of this consumption structure to low-end products will make the supplier of cheap products a winner in the growth of sales and get a larger share of the market, which should be a good opportunity for cheap Chinese products.

(PPI) the price of the textile exports will be reduced. There is an agency forecast that the overall price level of China's textile exports will decline in a certain range in 2009, and the sharp drop in the growth rate of foreign demand will exert great pressure on the prices of textile exports.

Since 2008, this pressure has caused most enterprises to only maintain their profit margins, and a considerable number of enterprises have been in trouble.

The shrinking trend of overseas demand in 2009 will continue to exert greater pressure on China's textile export prices.

But at the same time, the sharp fall in the prices of basic energy and raw materials has provided some room for China's export commodity prices to fall.

In the first 9 months of 2008, the sharp rise in the prices of basic energy and raw materials was an important factor that led to the decline of China's commodity prices. In the first 8 months, the prices of manufactured goods in China (PPI) continued to rise sharply. After September last year, the rapid decline in basic energy and raw material prices and the rapid shrinkage of demand led to a sharp decline in PPI.

China's PPI growth rate is expected to be negative in 2009, and the annual average decline is estimated at around 3%.

Besides, since August 2008, the Chinese government has repeatedly reduced or cancelled export tariffs on some export commodities and raised the export rebate rate of textiles.

The RMB exchange rate against the US dollar is likely to show a certain depreciation, and it will also provide a certain room for the decline of China's textile export prices.

The trade environment will be effectively improved. Reporters learned from the relevant departments of the Ministry of commerce that China's terms of trade will be effectively improved in 2009.

Since July 2008, with the sharp fall in the prices of international energy raw materials, China's import prices have begun to fall sharply. Although the price index of China's export commodities is also dropping, the rate of decline is far less than that of the import price index.

Reflected in some of our export enterprises, due to the depreciation of the US dollar and the euro, as well as the loan interest rate of many developed countries in the world after the financial crisis dropped to zero, the pressure of repayment and interest payment has been reduced to the enterprises that have imported foreign exchange loans in the past few years. In 2009, enterprises with the need to import equipment for technological pformation should be regarded as the low cost opportunity for importing equipment.

According to the Ministry of Commerce, China's trade surplus will remain at a high level.

In the first three quarters of 2008, despite the rapid growth of China's foreign trade and import and export volume, China's trade surplus continued to be lower than the same period last year due to the deteriorating terms of trade in China.

However, since September 2008, with the continuous improvement of China's terms of trade, China's monthly trade surplus has continued to increase.

From September to November, China's trade surplus in that month rose to a record high of $29 billion 367 million, $35 billion 239 million and $40 billion 90 million respectively.

Among them, the monthly trade surplus in November was a new high of $40 billion, which was achieved on the basis of a decrease of 9% in total foreign trade and import and export volume.

According to expert analysis, in 2009, although the total volume of China's foreign trade imports and exports may show an unprecedented sharp decline, the scale of China's trade surplus will remain at a high level. The trade surplus of the whole year will probably be as high as 330 billion US dollars, which will be higher than the trade surplus level of around us $300 billion in 2008.

To sum up, as long as we are able to distinguish the situation, identify the market, conscientiously implement the principles and policies of the government work report, adhere to the strategy of diversification and quality win in the export market, consolidate the traditional export market, vigorously explore new markets, fully utilize the international fiscal and taxation policies to support exports, appropriately expand the scale of foreign trade development funds, focus on supporting SMEs to develop international markets and cultivate export brands, strive to expand imports, focus on the introduction of advanced technology and equipment, and increase imports of key components, components and raw materials, and so on, the current export predicament of China's textile and garment industry will be able to break through.

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