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    Challenges Seek New Opportunities: How Can The US Market Continue?

    2018/7/13 11:19:00 149

    Sino US TradeThe United StatesThe Market

    In June 15th, the US government issued a list of tariffs, which would impose a 25% tariff on imports from China of about $50 billion.

    Among them, about $34 billion has been imposed on Tariffs since July 6, 2018, while public tariffs have been solicited for tariffs of about $16 billion.


    Although trade between China and the United States is still fluctuating, the China Textile and clothing trade exhibition (New York) and the American Texworld clothing fabrics exhibition, the Apparel Sourcing USA (Apparel Sourcing USA) and the New York international home textile purchasing Exhibition (hereinafter referred to as "New York Exhibition") are indeed in full swing.

    According to the organizers, as of now, the overall scale of the exhibition is flat with last year.

    The backbone export enterprises and professional foreign trade groups of foreign trade provinces have made New York exhibition the most important market platform for opening up the US market.

    From the perspective of corporate registration, the exporters of China's textile and garment industry still have high hopes for the US market.

     

    Adjust the structure to the middle and high end

    "The United States is still our main market, and we will do our best to keep it."

    When asked about the impact of Sino US trade friction on the company's export business, Ma Jiaqiang, assistant general manager of the 3542 China Textile Co., Ltd. categorically replied.

    "The annual production capacity of home textiles is about 1 million 500 thousand units. Last year, the total export volume was US $25 million, of which US exports amounted to US $19 million."

    According to Ma Jiaqiang, Jihua 3542 Textile Co., Ltd. began exporting bedding products since 2008. The most profound feeling in the past ten years of export trade is that profits are getting thinner and thinner.

    "In 2010, the soaring cotton prices caused great impact on us, and orders were largely draining away.

    Because at that time the price difference between domestic and foreign cotton was large, India's cotton price advantage was obvious, which led directly to many of our orders to India.

    Since then, the appreciation of the renminbi has led to a narrowing of China's competitive advantage in bedding suites. Now, we can say that we need to survive in the cracks.

    Coincidentally, it is also the main home textile product. Since 2008, Qian Qian, the manager of the Changzhou home textile trade department of the US foreign trade, has officially launched that although the company's business has not been affected too much at this stage, the profit space has been compressed to some extent.

    In such a difficult situation, how can enterprises seek opportunities in the face of Sino US trade friction?

    "Industrial upgrading is particularly important."

    This is the way out for the company that Ma Jiaqiang has repeatedly stressed to reporters.

    "At present, the company mainly adjusts the product structure, and the reason why the company survives these years is also because the product structure is relatively large.

    Nowadays, non cotton fiber products account for about 60% of all products.

    On the current policy, once the trade frictions are escalated, cotton products are more likely to be hit, so even after the relevant tax shocks, the cost of raw materials is not much different from that of foreign countries.

    In addition, we have our own original research and development advantages. The company develops dozens of new products every year to promote it to customers.

    In this regard, Wuxi Yu Mei Trading Co., Ltd. business manager Qian Li Xia feels the same body, the company mainly exports children's clothing, under the comparative advantage of India and Pakistan cotton products, the company has basically abandoned the adult cotton T-shirt and other clothing production, and specializing in children's clothing.

    "Now a lot of adult and basic clothing companies are losing a lot of orders. We can do baby clothes now, because matching is still there.

    After so many years, the printing and embroidery factories and accessories factories still have matching facilities. This is our competitive advantage.

    The baby takes more than 50% of the velvet material, and the velvet is also a strength in Wuxi. Southeast Asian enterprises have to import fabrics from us here, plus pportation costs, and so on. They will compete against us.

    According to the organizers, the functional fabric companies participating in the New York exhibition increased significantly over the past year, and the number of enterprises producing high-end clothing increased compared with last year, showing that the technology content of China made a marked increase.

    "This time to New York exhibition, cotton products are rare, the main new products, the main new development of the new development of more than 30 new fiber fabric products, such as bamboo carbon fiber, coffee carbon fiber, silver ion fiber, seaweed fiber, recycled polyester fiber, regenerated silk fiber and so on.

    These products were on display in the Canton Fair in May this year, and the response was good, so this time we wanted to bring the American exhibition.

    They were interested in sending samples to American customers before, so we went to the exhibition this time to visit old customers and see if there was a possibility of increasing orders for these products. "

    Ma Jia Qiang told reporters with anticipation, "our newly developed new products belong to medium and high-end products, and the price is higher than that of similar cotton products.

    Products are mainly for high-end customers, mainly partial functional products, such as antibacterial, hygroscopic, breathable and deodorant.

    All along, Changzhou walray is looking forward to going deep into the US and getting close to the US market to promote the company's products and tap potential customers.

    Qian said that the company is confident that the upcoming New York exhibition will be held in July. At present, all the samples have been sent to New York. New and old customers have also been invited, and all the links are ready.

    It is worth mentioning that in view of the New York exhibition, the company has designed new patterns, fabrics and products, and also added green bamboo fiber products to meet the needs of the target market.

    This year's first New York exhibitor, Fenghua Hengxiang garment factory, is a purely export oriented enterprise, which is mainly a man's wear. According to Zhuang Fangfang, sales manager, "this exhibition will develop some medium and high-end customers. The products will be mainly Menswear, casual men's wear and some women's clothing, mainly cotton, linen and some functional fabrics, such as moisture absorption, perspiration and iron free.

    At present, the market share of the company in the United States is not large, mainly through intermediaries to do some American orders, and the customer level is uneven.

    Through middleman's communication with guests, information asymmetry often occurs.

    So this time we want to face to face with our guests through the New York exhibition platform to better understand the guests' demands and communicate effectively.

    Product upgrading wins market

    Under the condition that China has gradually lost the dividends of labor and raw materials, for textile and garment enterprises exporting to the US market, upgrading products to high-end customers is undoubtedly a powerful starting point.

    It has become the consensus of enterprises to take differentiated roads and make niche products win the market.

    According to the organizers, from the current situation of the exhibitors, the number of small orders is increasing.

    Ma Jiaqiang said: "although the cotton products still occupy the mainstream consumer market, when the national cotton purchase and storage price is very high, with the advantage of its cotton cost, India's textile industry chain has been quite perfect over the past two years. Compared with us, their energy cost, raw material cost and labor cost are all cheaper than ours, so India has obvious price advantage.

    At present, China's cotton bed sheet products only occupy a small share in the United States, about 10 percent.

    Eighty or ninety of the share has been occupied by India and Pakistan.

    So it is very difficult for us to occupy the market share in cotton products. We can only take the differentiated road and make some niche products.

    According to Qian Lixia, Wuxi's orders in the US market are relatively random, and the quantity is not regular. Basically, they are orders of small quantities and varieties. If the coordination is good, the profits will be relatively high.

    "Such customers are more suitable for our trading companies.

    At present, we have about more than 40 customers. We will recommend other popular items to other customers who are in need.

    Customers from the United States and Canada will also come to China to look for fabric suppliers and ask for samples. When they are selected, let us buy them, so that they can do many small quantities and varieties of guests.

    Like this kind of customer, we operate more and more mature, and the efficiency is higher and higher.

    "The quantity of customer orders can not be particularly large, but the quality of fabrics and other products will be required.

    At present, the company is also upgrading the industry. It will eliminate some of the customers who are not profitable, and at the same time carry out a series of improvements to the factory, such as training workers' skills and updating equipment periodically, with a view to improving all aspects of production capacity and so on.

    According to Zhuang Fangfang, the company often visits some customers. At present, the feedback they get is that for those high-end customers whose orders are not very large, they have no advantage in placing orders in India or other Southeast Asian countries, because some fabrics need to be imported from China. After all, China has more advanced equipment and richer experience in fabric production.

    There may be some advantages for some guests who are single and not very qualified.

    "And we also consulted with customers. If they calculate the price of fabric and go to middlemen to cooperate directly with factories, they will be more cost-effective on our side."

    Recently, a reporter from the official website of the National Textile Federation (NCTO) announced that the head of a special yarn spinning factory reminded the American textile and garment industry: "if we want to survive, we must innovate and have no choice."

    The development of textile industry in the United States is so. Under the current complex circumstances, China's textile industry needs more enterprises to face market demand and innovate continuously.

    In recent years, China has made great progress in product quality, production efficiency, equipment technology, process flow and logistics, relying on the strong advantages of the textile and garment industry chain. It has also been developing towards high-end development in terms of brand building, product service, product design, R & D, and so on.

    In addition, the new orientation of "technology, fashion and green" is to highlight the advantages of China's textile and garment industry again.

    As Zhuang Fangfang mentioned earlier, in order to increase production capacity, the company in Wuxi will carry out technical training for workers, and it will also update equipment periodically.

    In addition to the upgrading of the functional non cotton fiber based products from cotton to medium and high end, the company is planning new factories, eliminating backward production facilities and replacing new equipment to better cope with the competition pressure. 3542

    Talking about how to continue to maintain the advantages of China's textile and garment industry, Shanghai Ye Xin Trading Company CEO Ye Er Lai said that with the rapid development of China's textile and garment industry, the industrial structure of the textile and garment industry is also becoming more mature. In the industry from labor-intensive industries to brand and design as the critical stage of competition, textile and garment enterprises should change their traditional concept of production and operation, improve product quality, design and research and development, improve production efficiency, reduce production costs, personnel training, brand strategy, marketing promotion and product services, so as to enhance the comprehensive competitiveness of enterprises, not only to be an exporter, but also an export power.

     

    Actively cooperate for win-win situation

    According to the US Department of Commerce's International Trade Commission's textile and clothing office (OTEXA), as of April 2018, China exported about 10 billion 927 million US dollars to the United States, while China imported about 300 million dollars from the United States.

    Even though the trade situation between China and the United States is uncertain, a series of impressive figures seem to show that China's enthusiasm for export to the US textile and clothing is undiminished. It gives us some good anticipation. China and the United States are each other's largest trading partners and maintain normal international trade relations, which is a win-win for both sides, and is in line with the common interests of the two peoples.

    In May 11th, the 17 associations, including the AAFA, the North American uniformed manufacturers and Distributors Association (NAUMD), the National Retail Federation (NRF) and the retail Leadership Association (RILA), jointly sent a letter to Robert Wright F Ze (Robert Lighthizer) of the US Trade Representative Office (USTR), strongly opposed to any tariff imposed by the United States on consumer goods such as clothing, shoes and household goods imported from China.

    They believe that the increase in such tariffs will harm the interests of American consumers, American workers and American companies.

    According to the joint letter, in the United States, tariffs on some products have been very high, for example, the tariffs on ski jackets, baby clothes and tennis shoes are up to 27.7%, 32% and 67.5% respectively.

    These products have little or no commercial production in the US.

    So far, China is the largest supplier of these products.

    The US import from China has taken up most of the tariffs collected by the US government.

    In fact, the tariffs on imports of these goods from China have accounted for over 22% of all tariffs imposed by the United States from all countries.

    What needs to be clear is that these tariffs are paid by American workers, American consumers and American companies, rather than China.

    In addition, additional tariffs will increase the prices of these goods in the United States.

    Given the fact that China dominates the production of these products and the fact that every American buys these consumer goods, it means that every American will feel the negative impact of such behavior.

    It will also involve the employment of about 4000000 Americans currently employed in clothing, footwear, tourist products and household goods in the United States.

    In May 16th, Julia K. Hughes, chairman of the USFIA, testified at the US trade representative's office on the hearing of the 301 investigation.

    USFIA urged the Trump administration to remove clothing and other fashion products from the list of tariff increase products under Clause 301.

    Because tariffs on imports of these fashionable products are not conducive to solving the concerns about China's intellectual property policies and practices in the USTR 301 clause report.

    What we need is multilateral action, not tariff.

    Tariffs on clothing, footwear and other fashion products will constitute a huge increase in tax rebates.

    Tariffs on these products are among the highest in manufactured goods, with 32% of man-made fiber garments and 67% of footwear.

    Why do we increase burdens on American families? For many of these products, China is still the number one supplier in the world, and other procurement destinations cannot replace China.

    The most important thing in the testimony is that these tariffs will have a negative impact on the employment of USFIA members in the United States.

    In fact, according to its research on the global value chain of the industry, 70% of the value of imported clothing remains in the United States even though these garments are produced outside the United States.

    The US government should nurture, rather than prevent, the growth of these jobs in the most innovative and symbolic brands in the United States.

    "China is still an important supplier of the home textile products (such as bedding and bathroom products) in the United States, because it has proven that it is the most reliable source of large-scale projects leading the US business," said Warren Shouldberg, an American business reporter.

    Although other countries can offer similar products, they can rarely do this by regularly providing large quantities of goods to large US retailers such as WAL-MART, Target and Bed Bath&Beyond.

    China's infrastructure, manufacturing fundamentals, professional ethics and raw material supply enable it to continue to provide resources for the US market and is unlikely to change in the foreseeable future.

    It is gratifying to note that in the interviews with exhibitors, most enterprises can see the current trade friction with a positive attitude, and hope to do everything possible to maintain their old customers and develop new customers.

    Wuxi has begun to make the Americas market in the past 35 years, accounting for about 20% of its export share, and is in a growth trend.

    In the face of Sino US trade friction, Qian Li Xia hopes that the company can exhibit itself in New York to show itself well. "It feels like there is no impact at the moment, and it should not be very influential. The company's products always win by product quality, service and delivery time, rather than relying on large quantities and low price competition. Otherwise, we will not compete well with Southeast Asia.

    Because a win-win business can be done, for customers, we must have our value, customers will choose us, and our value is moderate price, not random offer; the second point is the same price, we are more competitive in terms of service, quality, delivery time and so on.

    Qingdao Chen Yu Home Textile Co., Ltd. mainly deals in curtains, shower curtains, tablecloths, kitchen curtains, home textile fabrics and so on.

    Wang Meng, manager of the company's trade department, said that the company began its trade with the United States in 2008, and summarized the past experience in the US foreign trade. Exchange rate fluctuations and raw material costs have always been the main factors determining the company's foreign trade to the United States. The company has been trying to control the cost of printing and dyeing, stabilize customers with reasonable prices and quality products, so the company has been particularly smooth on the US foreign trade.

    Although Sino US trade relations have fluctuated this year, so far, the domestic textile industry has not yet been involved. Business managers are also at risk of safety, paying close attention to the latest policies of the two countries. Besides, the company is also making new adjustments in the market layout to expand the new market.

    Shanghai Trading Co., Ltd., which has just started this year, is mainly engaged in import and export business of textiles, knitted cotton fabrics and accessories, clothing, shoes and hats.

    Yel said, "although the initial stage coincides with the tension between China and the United States, we will respond with a common mind."

    According to the market information, we have prepared suitable products to New York exhibition. We believe that the company can get a good start with the platform of New York exhibition.

    As a main trade and import and export enterprise, Wujiang Dahe is an integrated industry and trade enterprise with independent import and export rights.

    Niu Zheping, general manager of the company, said: "the US market business started in 2011 and has been developing smoothly so far.

    During this period, the company's products are constantly upgrading and upgrading, and the fabric of the company is in the United States.

    market

    Gradually expand the share, and the prospects for development will be better.

    In the future, the great river will pay close attention to the policies of the two countries and the changes in the US market. At the same time, it will devote more energy to the construction of its own products, constantly improve the quality and competitiveness of its products, and take a positive attitude to meet the challenges.

    Qian Lixia believes that in the face of a trade war, it is sure to protect customers first, rather lower profits, and some even break even.

    Because for any enterprise, the cost of maintaining old customers is definitely lower than the cost of developing new customers.

    So in this case, the first and foremost thing is to protect customers, protect orders, and don't worry about how much money they make.

    At the same time, we will consider providing better services for our customers in future cooperation, such as establishing offices in the United States.

    Zhuang Fangfang also believes that "ultimately, the quality and service of products will be achieved. If we sincerely want to cooperate and win a win-win situation, I believe that customers will not care about the simple tax rate.

    Last winter, an American customer came to check the goods. He thought the current trade policy was very bad for us.

    However, we feel that although there are trade disputes between the two countries, business is business and cooperation can be done as much as possible.

    No matter where the customers are, as long as there is demand for our products, we are willing to cooperate. Instead of saying that there is trade friction between the two countries today, I will not cooperate with you. Tomorrow you are open to me, and I will cooperate with you again.

    If you have the chance to do it, you will have to solve it if you have any problems. "

    Most companies believe that under the current complex trading environment, targeting the United States

    market

    The best plan is to make adjustments while doing things.

     

    Three exhibitions and cooperation go hand in hand

    The three professional exhibitions (China Textile and clothing trade exhibition (New York) and the American Texworld clothing fabrics exhibition, New York Sourcing USA (Apparel Sourcing USA) and New York international home textile purchasing Exhibition (HTSE) were held in conjunction with the same hall.

    The New York exhibition is a platform for integrating upstream and downstream resources of the supply chain, as well as a platform for the release and promotion of new products and technologies.

    With the effect of the three exhibition gathering, the huge audience resources are also one of the unparalleled advantages of the three exhibition linkage, and the huge audience resources on the upper and lower reaches are shared.

    The three exhibition linkage is realized.

    Fabric

    The joint operation of the upstream and downstream industries of home textiles and clothing has formed an irreplaceable trend of industrial centripetal force and linkage.

    At that time, buyers and spectators from various fields will swarm to unlimited resources for sharing.

    Sino US trade friction is constantly increasing, and the uncertain factors of enterprise development are strengthened.

    Against this background, the cooperation between upstream and downstream industries is becoming more urgent and important.

    Obviously, the New York exhibition will not only provide a display space for exhibitors at home and abroad, exchange and cooperation, expand the industry, but also bring more business opportunities and opportunities for enterprises.

    The upstream and downstream enterprises jointly explore the symbiotic channels of mutual cooperation, and promote the healthy development of the industrial chain with the strength of industrial combination.

    Only if the upstream and downstream industry chain goes hand in hand, can we better promote product iteration, meet consumer demand, and lead the development of the textile industry in an all-round way.

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