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    Trade War Or Accelerate The Pfer Of Textile And Garment Industry Chain To Southeast Asia

    2019/5/22 17:37:00 9934

    Trade WarTextiles And ClothingSoutheast AsiaInternational Observation

                                                                         

         

    China's demographic dividend has disappeared, and environmental protection and security inspection pressures have been unprecedentedly strict. With manufacturing capital as the capital, accelerating the construction of supporting industrial chain facilities in Southeast Asia, and the escalation of Sino US trade war will accelerate the shift of the textile and garment industry chain to Southeast Asia.

    China's textile and garment market is more dependent on exports. According to incomplete statistics, China's textile and garment products exported over 270 billion US dollars in 2018, while domestic retail sales of textile and apparel were around 200 billion US dollars.

    The United States is China's largest exporter of textile and clothing products, of which the total number of pure cotton textiles and clothing exported to the United States in 2018 accounted for about 17% of the total export volume of cotton textile and clothing products in China.

    The United States impose tariffs on textile and apparel products, which will directly increase the export cost of China's textile and clothing products and weaken the price competitiveness of China's textile and clothing products.

    In recent years, Vietnam's main textile and garment industries in Southeast Asian countries have developed rapidly. JOYOU information predicts that Vietnam will seize some of the textile and garment market share originally exported to China.

    The escalation of trade wars between China and the United States also accelerated the depreciation of the RMB directly. Since the announcement of Trump's tax increase in April 2019, the RMB has depreciated from around 6.7 to about 6.9 against the US dollar and depreciated by 3% or so.

    Since the Sino US trade war began in March 2018, the value of the RMB against the US dollar has depreciated from 6.3 to about 6.9, with a depreciation of about 9.5%.

    Although the depreciation of RMB temporarily benefits China's textile and clothing exports, Argentina's Turkey currency and other domestic currencies have depreciated sharply against the US dollar, triggering the financial crisis in the country, resulting in the deterioration of the economic situation of the economy and more likely to lead to capital outflow. JOYOU's information suggests that the rapid depreciation of the RMB caused by trade wars is not optimistic about the long-term impact of China's textile and apparel market.

    China's textile and garment industry is carrying out structural adjustment of the survival of the fittest. Statistics from the National Bureau of statistics show that the gross profit of China's textile and garment industry has dropped from 12.14% at the end of 2012 to 10.16% at the end of 2018.

    The textile and garment industry showed a continuous decline in the gross profit margin under the rising trend of labor costs and environmental costs. The gross profit margin in 2018 dropped to its lowest point in nearly 10 years.

    China's annual revenue of 20 million above the scale of textile enterprises also fell from 22 thousand in March 2011 to more than 19 thousand at the end of 2018, with fierce competition in the industry, which accelerated the textile enterprises going to small factories and moving factories abroad.

    At present, the Sino US trade war has entered a stalemate. The attitude of both sides is very tough. The trade war will be a protracted war.

    If the US tax on China's other 300 billion dollars is increased later, it will impact China's textile and clothing exports to a certain extent. JOYOU believes that the trade war will speed up the pfer of some textile and garment enterprises in China to Southeast Asia.

         

         

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