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    Two Grey Rhinoceros That Will Affect The Textile Industry In 2020.

    2019/12/11 14:17:00 0

    Textile Industry In 2020

    In 20 days, 2019 will be over. The words "high inventory", "order less", "stop production" and "holiday" form the key words of this year's textile industry. From the surrounding textile enterprises, we know that this year's life is really bad. Some people jokingly said, "2019 is the most difficult year in 10 years, but it is also the best year in 10 years." The overture is the overture. In 2020, the year of the year of 10s and 20s will be very important. What will the textile industry do next year? We may look at the future through the global economic situation.

    The prosperity of the textile industry in the last century has been visions. Everyone is proud to enter the textile mill. However, history will never be repeated simply. The shadow of two grey rhinoceros moving slowly is enveloping the global economy, and it also has an impact on the development of the textile industry.

    The first grey rhino: the impact of uncertainty in the adjustment process of Sino US economic relations on global aggregate supply and demand;

    Second grey rhinoceros: the impact of European manufacturing recession, led by Germany, to global economic growth;

    The first grey rhinoceros.

    Uncertainty in the adjustment process of Sino US economic relations

    The impact of uncertainty in Sino US economic relations on global aggregate supply and demand

    Since 2018, the most profound, longest, and most uncertain factor that has plagued the global economy is undoubtedly the adjustment process of Sino US economic relations. So far, the two sides have held several rounds of consultations and negotiations (including the two heads of state meeting and the thirteen round of high-level economic and trade consultations).

    At present, the scale of imports from the United States accounts for about 3% of the world's total imports, and the proportion of China and the United States in the total global economy is also close to 40%. In addition, Sino US bilateral trade scale accounts for about 20% of the total trade volume between China and the US. Therefore, only from the trade level can we see the extent and extent of the adjustment of Sino US economic relations to the global economic operation.

       Sino US economic integration (data source: WIND)

    Therefore, for the global economy in 2020, the first grey rhino is the uncertainty of the adjustment process of Sino US economic relations. If the process occurs intermittently again and again, and the short-term discord will spread to a wider range, it will inevitably cause deep and medium-term negative shocks to the global economy.

    The impact on textile industry - declining orders and declining exports

    The adjustment of Sino US economic relations also has a negative impact on China's textile industry. The US tax increase list covers most of China's chemical fiber, yarn, fabric, carpet, industrial textiles, clothing and household textiles. According to customs data, the total trade volume of textile and clothing exported to the United States every year is about 50 billion US dollars.

    Under the background of Sino US trade friction, the wait-and-see sentiment of the industry is more intense, and the textile orders exported to the United States have declined significantly. Many manufacturers say that the reason for the sharp reduction in orders this year is due to the Sino US trade war. Many overseas orders are cancelled due to tariff reasons, while some orders are not exported to the US, but terminal customers are American. The long-term and uncertainty of Sino US trade war is obvious to the pressure of textile enterprises.

    According to the latest customs data, in the 1-10 month of this year, the total trade volume of China's exports of cotton textiles and clothing to the United States totaled US $9 billion 700 million, down 13.5% from the same period last year. The trade volume of cotton textiles and clothing imported from the United States was 64 million 390 thousand US dollars, down 27.9% from the same period last year. In 1-10 months, China imported 319 thousand tons of cotton from the United States, accounting for about 34.9% of China's total cotton imports from the world, compared with the same period last year, 1/5.

    Of course, Sino US trade friction is one of the reasons for the slowdown in China's exports, but it is not the only reason. It also includes the slowdown in global economic growth and the adjustment of international textile supply chain. For example, the growth of international trade in some emerging countries is outstanding.

    Second grey rhinoceros

    German manufacturing recession in Europe

    The impact of European manufacturing recession, led by Germany, on global economic growth

    Since 2018, German manufacturing has begun to show a downward trend. Driven by this, the European manufacturing PMI has fallen below 42%, the lowest level in ten years.

    At present, the global manufacturing industry is at the end of the 3 of industrialization. Germany, a powerful industrialized country, has proposed 4 of the industry in 2013. However, the dividend attenuation of the 3 of industrialization will continue to adversely affect Germany.

       German hi-tech exports and imports and exports of Germany and China (source: WIND)

    In 2018, the global economy amounted to about 85 trillion US dollars, of which the European Union accounted for about 19 trillion US dollars, accounting for 22%. In the European Union, the proportion of the British economy is 1/6, and the German economy accounts for 1/5. Accordingly, Britain's departure from Europe means that 1/6 will be separated from the European integration economy. If Germany really falls into recession, it will be a double blow to the European economy.

    What is more serious is that because of the global financial crisis in 2008 and the European debt crisis in 2012, the ECB policy orientation has been in an unconventional loose state, and the ECB's policy space to cope with the recession is almost exhausted. Correspondingly, European economic policy will be more dependent on the stimulus of German fiscal policy and policy coordination with other countries. However, because fiscal policy is still a short board of European economic integration, it is very difficult to expect the fiscal stimulus to really land.

    Therefore, for the global economy in 2020, second grey rhinoceros are the degree and duration of the decline of European manufacturing industry led by Germany. Once the recession and duration are far beyond their own tolerance, the negative impact will inevitably spread to the whole world.

    Enlightenment from German industrial upgrading 4 to China's textile industry

    At present, the global impact of the recession of European manufacturing industry remains to be seen. But the transformation and upgrading of German industry 4, especially the layout of Germany's textile industry, can bring us another way of thinking.

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