Sino US Trade Friction Heating Up Textile Industry Worsening

Since the two quarter of this year, Sino US trade war frictions have been escalated.

The pressure of exports has been enormous, while the US dollar has been relatively strong in the same period and the RMB has accelerated depreciation. Especially since mid June, there has been a sustained and rapid depreciation.

In RMB 1~7, China's textile and apparel exports totaled 990 billion 200 million yuan in 2018, down 3.26% compared to the same period last year.

Insiders believe that the Sino US trade friction has heated up, the market has become more risk averse, stocks, commodities and foreign exchange markets have fallen sharply, and bond markets have soared.

The United States is China's largest exporter of textiles and clothing, and Sino US trade friction will constitute an obvious negative impact on China's textile and garment exports.

"The tax increase list of the US $200 billion product relates to the textile and clothing related to the people's livelihood, and the export of textile and clothing is probably doomed."

JOYOU's information analyst, an Guang, said the tax increase list shows chemical fibers.

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And almost all of the products involved in textile and clothing are within the range of tax, and China's textile

Heavily dependent on exports, tax increases will slump exports of Chinese textile and garment industry to the United States.

Yu Xiaohong, an information analyst at JOYOU, said that China is the largest exporter of textiles and clothing. Its textile and apparel exports account for about 13% of China's total foreign trade.

The top 10 export markets of China's textiles and clothing are: the United States (17%), Japan (8%), Hongkong (6%), Vietnam (5%), Britain (4%), Germany (3%), South Korea (3%), Russia (3%), Philippines (2%), United Arab Emirates (2%).

In 2017, China accounted for 15.5% of the total exports of textiles and clothing to the United States.

"In 2018, the US dollar strengthened and the United States launched trade frictions, and the currencies of some emerging economies continued to depreciate, including Argentina, Turkey and India. The exchange rate of China's Hong Kong dollar against the US dollar was at a low level in the past 35 years, and the RMB continued to depreciate."

An Guang said that trade frictions are persistent, and it is expected that the renminbi will continue to depreciate, though it is good for export.

However, the United States tax on textile and garment products will lead to the suppression of the export volume and price of China's textile and garment industry, which may completely offset the devaluation of RMB to textile and clothing exports.

The textile and garment industry is a labor-intensive industry. In recent years, China's demographic dividend has gradually disappeared, and the textile and garment industry has been pferred to Southeast Asian countries such as Vietnam.

"After the United States formally increases taxes on Chinese textile and clothing products, the United States will increase the import of textile and clothing products from Vietnam oriented Southeast Asian countries to replace imported Chinese textile and clothing products, just as China increases the import of soybeans to Brazil and other countries to replace some of the US soybeans that are rising after tax increases.

JOYOU believes that this trade war Vietnam and other emerging textile and garment exporting countries may be the biggest beneficiaries.

An Guang expresses.

"Despite the escalation of trade frictions and the increase in tariffs in the us to increase China's cost, the US textile and garment industry is less likely to produce reflux for high human costs under the background of severe shrinkage.

China's losses will be the pfer of orders in the US.

Yu Xiaohong said that the main importers of textiles and clothing in the United States were China, India, Vietnam, Pakistan, Mexico, Bangladesh, Indonesia, South Korea, Honduras and Canada.

Vietnam, as the second largest textile and Apparel importing market in the United States, is most likely to catch up because of its relatively complete industrial matching, low production costs and abundant labor force.

Yu Xiaohong stressed that Sino US trade friction will undoubtedly be a big challenge to the textile and garment industry. However, Sino US trade friction is not only affected by Chinese enterprises, but more American companies will face the great impact of trade war, and the integration of global economy is inseparable.

Follow up China will take a series of measures to safeguard relevant interests, stabilize the RMB exchange rate and maintain sustainable economic development.