2019 Sino US Textile Trade Analysis

Major economic and trade concerns of China and the United States

Liu He, a member of the Political Bureau of the CPC Central Committee and vice premier of the State Council and the Chinese leader of the Sino US comprehensive economic dialogue, will visit Washington in from January 13 to 15, 2020 to sign the first stage economic and trade agreement with the US side. The agreement includes nine chapters: preamble, intellectual property rights, technology transfer, food and agricultural products, financial services, exchange rate and transparency, expanding trade, bilateral assessment and terminal settlement, and final provisions. At the same time, the two sides agreed that the US side will fulfill relevant commitments to phasing out tariffs on Chinese products at a phased stage, so as to achieve a shift from increased tariffs to lower tariffs. The Sino US trade war, which lasted for 22 months, finally came to a turning point.

The Sino US economic and trade agreement accords with the general direction of China's deepening reform and opening up, and its inherent needs to promote the high quality of economic development. The implementation of relevant agreements will help to strengthen intellectual property protection, improve business environment, expand market access, better safeguard the legitimate rights and interests of all kinds of enterprises including foreign enterprises in China, and also protect the legitimate rights and interests of Chinese enterprises in the US economic and trade activities. With the expansion of China's domestic market, Chinese enterprises, in accordance with the WTO rules and the principles of marketization and commercialization, will increase the import of high-quality and competitive products and services from all countries including the United States, which will help to conform to the trend of domestic consumption upgrading and meet the growing needs of the people. )

Two, 4 rounds of tariff combing in Sino US trade war

In July 6, 2018, 25% tariffs were added to China's $34 billion export to the United States (the dependency ratio of tax related goods on China's imports was 6.2%).

In August 23, 2018, 25% tariffs were added to China's $16 billion export to the United States (the dependency ratio of tax related goods on China's imports was 6.3%).

In September 24, 2018, 10% tariffs were added to China's US $200 billion commodity and was raised to 25% in May 10, 2019.

(dependence on imports of tax related goods to China 8%)

(including textile products in excess of US $4 billion)

In September 1, 2019, the first batch (A list) of China's US $300 billion commodity was added to 15% tariff. And plans to impose a 15% tariff on the second batch (B list) of China's US $300 billion commodity in December 15, 2019.

(dependence on imports of tax related goods to China 21.5%)

(including clothing, home textiles products, more than $40 billion)

The above 4 rounds of tax related goods import dependency on China totaled 42%, which means that 42% of the US imports were imported from China, and the impact of tariffs on the US market was bigger than the other.

(source: Japan's cabinet world economic trend report, July 26, 2019; China textile international capacity cooperation enterprise alliance)

Progress:

On December 13, 2019, the office of the United States Trade Representative (USTR) issued a notice of amendment to the tariff increase of US $300 billion in goods exported to the United States. It formally suspended tariffs on the commodities listed in the B list originally scheduled for entry into force in December 15th, and the tariff on goods added to the A list was reduced from 15% to 7.5% (15%).

Three. Statistics on textile and apparel trade between China and the US

According to China Customs Statistics:

In 2019 1-11, China's textile and clothing exports totaled 246 billion 940 million US dollars, down 2.80% from the same period last year. Among them, clothing exports amounted to 137 billion 648 million US dollars, a year-on-year decrease of 4.93%, and textile exports of US $109 billion 292 million, an increase of 0.03% over the same period last year.

Over the same period, exports of textiles and clothing to the United States amounted to 41 billion 950 million US dollars, down 6.97% from the same period last year, and exports accounted for 16.98%. (EU data for the same period: exports amounted to US $42 billion 844 million, a year-on-year decrease of 5.67%, and exports accounted for 17.35%).

Among them, exports to the United States:

Textiles: $11 billion 514 million, a year-on-year decrease of 8.62%, and exports accounted for 10.54%. (EU data for the same period: exports amounted to US $12 billion 18 million, a year-on-year decrease of 1.72%, and exports accounted for 11%).

Clothing: $30 billion 436 million, a year-on-year decrease of 6.33%, and exports accounted for 22.11%. (EU data for the same period: exports amounted to US $30 billion 825 million, a year-on-year decrease of 7.13%, and exports accounted for 22.39%).

According to the statistics of the US Department of Commerce:

In the 1-11 month of 2019, the United States imported 103 billion 463 million dollars of textiles and clothing (102 billion 607 million dollars in 2018), of which 25 billion 411 million dollars were imported from textiles (25 billion 792 million US dollars in 2018) and 78 billion 52 million dollars of clothing imports (76 billion 815 million US dollars in 2018).

Import from China:

Textiles and clothing: 34 billion 270 million US dollars (US $37 billion 483 million in 2018), accounting for 33.41% of US imports (33.78% in 2018).

Textiles: US $10 billion 758 million (US $12 billion 39 million in 2018), accounting for 43% of US imports (42.83% in 2018).

Costumes: $23 billion 512 million (US $25 billion 444 million in 2018), accounting for 30.25% of US imports (30.71% in 2018).

According to the statistics of the US Department of Commerce, in the 1-11 months of 2019, the import volume of clothing in Vietnam and Bangladesh increased by more than 10% over the same period of 2019, the unit price rose by 4.3% and 5.3% respectively, while China dropped by 4%.

Viewpoint:

From the data:

China Customs statistics caliber: Although China's textile and apparel exports to the US have declined, exports still account for a high proportion, compared with the European Union. This shows that China's textile and apparel industry still has a large competitive advantage in the US market.

The US Department of Commerce statistics caliber: horizontal comparison of textile and clothing in the United States import market share, China is still a self file.

From the unit price point of view, in 2019 1-11, Vietnam and Bangladesh increased the unit price of export clothing to the United States, while China fell, indicating the negative impact of Sino US trade war on Chinese and American enterprises and American consumers:

US buyers will transfer orders to China, and new suppliers are bound to raise their prices. At the same time, Chinese suppliers and American buyers share part of the tax increase costs, resulting in a decline in export unit price. So there is no winner in the trade war.

According to the US Department of Commerce, according to the US Department of Commerce, the amount of imports from the United States decreased by 15% in 2019 1-11, and China's exports decreased by 11.4%, and the trade deficit between Japan and Canada declined in 2019.

The "trade war" has been a blow to the US manufacturing industry and business investment has declined. According to the analysis of the US Department of Commerce, since February 2018, the United States has imposed tariffs on the US $46 billion loss, and the US commodity exports hit by retaliatory tariffs have also declined sharply. The analysis showed that, in the 12 months ending in late November 2019, US exports of goods hit by retaliatory tariffs fell by 23% over the same period last year.

From the international environment:

At the beginning of January 2020, the world bank issued the new version of the global economic outlook forecast report. Under the combined influence of various factors such as trade and investment weakness, the global economic growth rate in 2019 is expected to be 2.4%, lower than 0.6 percentage points in 2018 and 0.8 percentage points in 2017.

According to the classification, the growth rate of the major developed countries in the world will be reduced from 2.2% in 2018 to 1.6% in 2019. The growth rate of the 19 countries in the euro area and Japan is about 1.1%, which is a drag on the developed countries.

Forecast US economic growth in 2019 was 2.3%, 0.6 percentage points lower than in 2018.

In 2019, the economic growth rate of developing countries will be reduced from 4.3% last year to 3.5%, of which China's economic growth rate is expected to be 6.1%, higher than that of other major developing countries, and the only one of these countries is 6%.

That is to say: in 2019, China and the United States were the countries with the highest economic growth rate in their respective groups, and the "highest economic aggregate" among their respective groups.

The world bank believes that global growth prospects are dominated by downside risks. Major economies are falling more than expected. Some countries, especially emerging markets, are prone to financial turmoil, which indicates that they will still maintain slow growth in 2020. Policymakers should seize the opportunity to carry out structural reforms to promote broad-based growth, which is crucial to the global economic recovery.

From the domestic situation:

In 2019, although faced with the complex situation of risks and challenges and the increasing pressure of domestic economic downturn, the whole country persisted in the general keynote of steady progress, adhered to the new development concept, and persisted in taking the structural reform of supply side as the main line, thus maintaining the overall stable and steady progress of the economy.

The latest figures released by China Customs General Administration on 14 may show that in 2019, the total value of China's foreign trade and imports reached 31 trillion and 540 billion yuan, up 3.4% from the same period last year. In the context of the stagnation of Global trade growth, China's foreign trade has made remarkable achievements, showing the resilience and vitality of China's economy and playing an important role in the downward pressure on global economic confrontation.

The export of textiles and garments was RMB 175 billion 320 million yuan in the month, and increased by 9.3% compared with the same period (the same below). Among them, the export of textiles was 77 billion 340 million yuan, an increase of 12.8%, and clothing export was 97 billion 980 million yuan, an increase of 6.7%. In 1-12 months, textile and apparel exports totaled 1 trillion and 873 billion 10 million yuan, an increase of 2.6%, of which 828 billion 320 million yuan of textile exports, an increase of 5.5%, clothing exports 1 trillion and 44 billion 690 million yuan, a slight increase of 0.3%.

In dollar terms, exports of textiles and clothing increased by US $24 billion 950 million in December, an increase of 7.9%, of which 11 billion 10 million US dollars in textile exports, an increase of 11.4%, and clothing exports 13 billion 950 million US dollars, an increase of 5.4%. In the 1-12 months, textile and apparel exports totaled 271 billion 570 million US dollars, down 1.9%, of which 120 billion 200 million US dollars in textile exports, a slight increase of 0.9%, and clothing exports 151 billion 370 million US dollars, down 4%.

The traditional pillar industry of the people's livelihood, which is mainly market-oriented by private enterprises, is the textile industry. It adheres to the structural reform of the supply side as the main line, transforming the development mode, optimizing the industrial structure, and changing the driving force of growth so as to achieve a relatively stable development. Such achievements are hard won.

Four, coping

"Tell your story well and cultivate new international competitive advantage according to the advantages of industry factor endowment structure.

"Make full use of foreign trade and steadily improve quality and development initiatives.

"Diversification of export market.

"Taking the structural reform of supply side as the starting point, we will dig deep into the huge middle class, urban and rural settlement market in China.

"Firm confidence that trade globalization is irreversible.

The 22 month trade war is a severe encounter in China's development path. China has withstood the strong trade war impact of the United States, maintained a healthy economic fundamentals, continued to develop well, and the public psychology and social order were in good order.

Looking ahead, the Sino US trade war has not ended, and the next negotiation will be more difficult and sticky. But the mentality of the Chinese has become more relaxed. We can not predict what will happen in the future, but we are more confident that they will not fail us without exception.