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    Before The Two Digit Decline In Export Volume In February, Will China'S Textile Industry Face More Challenges This Year?

    2019/3/27 21:52:00 6088

    TextilesClothingExportsJapanEconomic Operation

                                                                         

         

    According to a notice issued recently by the General Administration of customs, according to the Japanese Embassy in China, the Ministry of finance of Japan decided not to grant tariff preferences to the GSP for China's exports to Japan from April 1, 2019 onwards.

    This means that the annual average tariff of US $12 billion in goods exported to China is about 3% as a whole.

    This is not a good news for our textile and garment export enterprises.

    At the same time, the data in the first two months of this year also show that China's textile and clothing exports are under downward pressure.

    According to customs statistics, in 2019 1~2 months, the total export volume of textiles and clothing in China was 38 billion 155 million US dollars, down 11.6% from the same period last year, of which the total export volume of textiles was 17 billion 380 million US dollars, down 7.8% compared with the same period last year. The total export volume of clothing was 20 billion 775 million US dollars, down 14.6% from the same period last year.

    However, the superposition of export pressure is only the tip of the iceberg in this year's industry challenge.

    It is predicted that due to the complex external environment, the textile economy in 2019 will face greater challenges.

    New situation tests textile industry's ability to resist risks

    According to the analysis of the China Federation of textile industry, the external environment facing the economic operation of the textile industry in 2019 is more and more complex and severe, and the operating pressure will also increase significantly. It is expected that the growth rate of the main operational indicators will be down compared with that in 2018, and the pressure of export growth will be particularly prominent.

    1. international market downside risks increase

    According to the analysis of China Textile Union, in 2019, the development trend of international economy and market demand became more complicated.

    On the one hand, the driving force of economic growth still exists.

    At present, the global employment situation is at a historical high level, which helps to form a virtuous cycle of mutual promotion and gradual growth of corporate profits, household income, consumption expenditure and production investment.

    On the other hand, the downside risks of the global economy are obvious.

    Affected by factors such as liquidity contraction and tight international trade situation, the sustainability of the recovery trend of the developed economies is expected to decline, and the market vulnerability of emerging economies is highlighted.

    According to the latest forecast of the International Monetary Fund (IMF) in January 2019, the level of global economic growth will slow from 3.7% in 2018 to 3.5% in 2019, and the slowdown in developed economies will be larger than that in emerging economies.

    Although the export market structure of China's textile industry is increasingly diversified, the proportion of the three traditional markets in the United States, Europe and Japan is still around 40%. After considering the export of some of the upstream products such as chemical fiber and fabrics to the emerging market, the products will eventually flow into the developed countries. The market demand of the international market, especially the developed economies, will slow down, which will lead to a significant increase in the export pressure of the textile industry. It is estimated that the total export volume of China's textile and clothing will be lower in 2019 than in 2018.

    2. domestic demand growth will slow down steadily.

    In 2019, the pressure of China's macro-economic operation has also increased. The slowdown in external demand is expected to be obvious. The negative effects of Sino US trade frictions are gradually emerging, which will further increase export pressure and thus have a negative impact on domestic employment, investment and final consumption.

    Under the external environment of "worry about change", the central economic work conference still made important judgments that China's development is still in a long-term and important strategic period. It shows that China's generally stable macroeconomic environment and the continuously upgraded domestic demand market will still provide the basic driving force for the textile industry's innovation and development.

    Although the slow economic growth will restrict residents' income growth, the consumer confidence and consumption intention in the domestic market are still at a good level. With the new round of tax reform promoting the residents' income and promoting the formation of a strong domestic market, the relevant domestic and foreign market environment of textile industry is expected to remain basically stable, and the opportunity to tap the potential of domestic demand upgrading still exists.

    It is estimated that domestic textile and clothing sales will continue to grow steadily in 2019, and the growth rate will be slightly slower than that in 2018.

    3. multi pressure test industry anti risk ability

    While the growth of domestic and foreign demand is slowing down and the pressure of market sales is increasing, the textile industry is facing a series of other factors, including the development pressure of comprehensive cost upgrading, shortage of labor structure, strict supervision of environmental protection and so on. There are also some uncertain factors such as Sino US trade friction and liquidity tightening.

    The more prominent factors are:

    First, the impact of Sino US trade friction can not be ignored.

    Although the amount of tax related products exported to the US is limited at the present stage, the uncertainty of the international trade environment of the textile industry has been greatly improved, which not only directly affects export orders, enterprise confidence and related production and employment, but also will have a potential impact on the international procurement pattern and the international division of labor and investment layout structure of China's textile industry.

    Two, the situation of environmental protection is becoming more and more serious.

    In 2019, the laws and regulations on soil pollution control and the public participation in environmental impact assessment will enter into the implementation phase. The second round of environmental supervision will start soon, and the pollutant discharge permit system will cover all key industries.

    Although the state clearly stipulates that regulatory measures must not be "one size fits all", in the work plan of the local environmental protection departments, it is still mandatory for all printing and dyeing enterprises in the area to stop polluting and stop production in view of problems such as excessive pollutant concentration, excessive sludge volume and centralized development in the park.

    How can China's textile industry respond to Japan's tariff preferences?

    According to a notice issued recently by the General Administration of customs, the Ministry of finance of Japan decided that it would no longer grant preferential tariffs on GSP to China for shipment from April 1, 2019, and that customs would no longer issue GSP certificate of origin for goods exported to Japan.

    According to the latest GSP policy in Japan, from 2019, more than 35%~90% of China's traditional superior commodities, such as organic chemicals and plastic products, will no longer enjoy the Japanese GSP treatment.

    The average tariff rate granted by Japan to China was about 3%, which means that the average tariff of about 12 billion US dollars per day will float about 3% as a whole, and some commodities will even go up to 10%.

    According to the analysis, first of all, this will have the greatest impact on textile and other labor-intensive Chinese products.

    According to statistics, China's textile exports to Japan accounted for more than 60% of the Japanese import market.

    It is worth noting that, while eliminating the treatment of China's GSP, Japan has retained the GSP treatment in Southeast Asian countries such as Vietnam, Kampuchea, Indonesia and Bangladesh.

    After the implementation of the new GSP policy in Japan, the import tariff rates of textiles and raw materials in Japan will be 1.06~14.2 percentage points higher than those in the above countries. China's related commodities will face more severe competition in the Japanese market.

    At the same time, electromechanical and chemical products, as two other main commodities exported to Japan, will also be seriously affected.

    At present, China's Japanese electrical and chemical products are still dominated by Japanese funded enterprises in China. Many Japanese enterprises are importing raw materials from China, or selling products to China as production bases, and they can not enjoy the GSP treatment, which will have a huge impact on the production layout and commodity prices of these Japanese enterprises.

    Japan did not suddenly announce the end of China's GSP preferences.

    As early as November 2016, the Ministry of finance of Japan formally announced the readjustment of the preferential tariff system.

    The new standard exclude 5 countries from China, Mexico, Brazil, Thailand and Malaysia from the list of tariff relief lists of developing countries, and will terminate the GSP policy from 2019.

    In this regard, insiders said that textile export enterprises could adopt multiple strategies to deal with the negative effects.

    In the short term, enterprises with export goods to Japan will be required to notify the export consignors to secure the GSP certificate of origin and the shipment of goods before April 1, 2019.

    Long term choice is to speed up the pace of productivity and invest in factories and developing countries that still enjoy the GSP treatment, and then export them to the GSP supplier countries. Two is to actively develop new markets outside the EU and Japan. Three, in response to the guidance of the state and industry, we should accelerate industrial upgrading, technological development and independent brand building, and strive to foster competitiveness at the core of brand, quality and service, pforming the low cost advantage into a comprehensive advantage of factors such as complete industrial chain, talent gathering and huge market, and gradually get rid of the dependence on price advantage.

    In addition, China is now actively promoting negotiations on the China Japan Korea free trade zone. It is hoped that in the near future, products exported to Japan will also enjoy preferential tariff treatment in the agreement of the free trade area.

         

         

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