After Two Months Of Purchasing Textile Raw Materials Inventory, We Encountered 20 Million Dollars Of Unmarketable Goods. The Global Textile Production Chain Will Press The Pause Button.

China's foreign trade enterprises, which have just come out of the first wave of pressure to resume production and return to work, will face up to the second pressure: due to delayed consumption, orders shelved or cancelled due to foreign epidemic control, they will have to press the pause button just when they start work. Factory rent and tax paid, wages paid, part of the workers may be laid off... Nearly fifty million of China's foreign trade practitioners are under collective pressure. In 2019, the contribution of China's foreign trade enterprises to GDP was 10%.

In the January and February, China played the first half of the game and the world played the half court in March and April, and became embarrassed under the butterfly effect. In the field of economy and trade, the global supply chain has been cut off because of the epidemic situation.

The closure of multinational routes led to serious disruption of the shipment of goods, and some domestic or foreign trade enterprises will be on holiday.

"After a period of efforts, factory production has been fully restored. But with the rapid spread of the overseas epidemic, the situation is turning rapidly. Over the past few days, many notices have been received from American and European customers to postpone or cancel orders. " Sun Jianbo, general manager of Zibo Hongxu Textile Co., Ltd., told reporters. Hongxu textile is an infant clothing manufacturer. It has maintained rapid development in recent two years, and its products have entered the high-end market in the US and Europe.

Zhejiang, a European market leader and chief export operator of men's jackets, said that Europe is becoming a new center of the epidemic. The closure of multinational routes led to poor logistics and serious disruption of exports. At the same time, the epidemic situation in European countries is continuing to spread, residents' lives are affected, local clothing consumption market demand is sluggish, orders decline significantly.

"This Monday. Now many European and American customers do not work, they are working at home. When asked whether the order was suspended or cancelled, He Hui, a pseudonym, was engaged in the textile and garment trade.

It is understood that most of the European and American customers He Hui's clothing trade company is suspending or cancelling orders.

"Because of the epidemic situation, many European clothing stores are closed, at least two or three months will be the case, and stores even open, business is not good, so all orders suspended, some new orders may be directly canceled. 80% of the European and American customers have this situation. He Hui said.

Now, the first thing that he wakes up every morning is from watching the domestic epidemic data and becoming a focus on foreign epidemic data. Under the background of economic globalization, practitioners of foreign trade, including ho Hui, deeply feel that the global economy is a community and no single economy can be single.

"Our company may start off next month. As far as cash flow is concerned, we can still be quite ready to reorganize the organizational structure and do some internal training to get through the epidemic. He Hui reluctantly indicated that if there were no new orders, besides the impact of trading companies and the upstream garment production factories, they might face a situation of no work to do.

The same is expected in the early control of foreign epidemic, as well as in Guangzhou shoe processing foreign trade FA fa (alias), it is understood that ahair's shoes are mainly exported to Japan, as compared with Ho Hui, affected by the epidemic less. A hair told reporters that although the Japanese epidemic is not serious, but customers also began to wait and see state, the next order has not been determined.

Ho Hui told reporters that at present, the global customers are in a state of panic. They have no definite idea about the duration, impact and response measures of the epidemic. They are also in a wait-and-see state, so most of them have not explicitly pointed out that they should cancel their previous orders, but rather postpone delivery.

Under the double attack of Sino US trade friction and the new crown pneumonia epidemic, a carpet exporting enterprise from Shandong felt a lot of pressure. The head of the company said that the United States is suffering from more serious epidemics. The exhibition is postponed and the tourism industry is stagnant. The demand for carpet products for local hotels and conference centers is greatly reduced. The newly built hotels may be postponed or shut down, and the original meeting rooms will not be replaced with carpets. The field share is compressed again.

In March 19th, the Ministry of Commerce held an online press conference. The new crown pneumonia epidemic is spreading around the world. More than 160 countries and regions have confirmed cases. Some countries have been hit by production, consumption and other fields. Trade activities have been reduced, and the downward pressure on the global economy has increased. And so on.

Vietnam's textile industry has been stopped by US law, or 20 million US dollars are facing unsalable sales.

With the increasing epidemic in Europe and America, Vietnamese textiles have plummeted in the US and Europe. Recently, Vietnam's textile exports have been reported for a long time.

According to Vietnamese media reports, Truong Van Cam, vice chairman of the Vietnam textile and Garment Association (VITAS), said recently that the European Union and the United States, the largest exporter of Vietnam's textile industry, had ordered telephone calls to stop ordering products from Vietnam. Vietnam is expected to reduce exports to the EU by 8% in the first and second quarters of 2020, due to a sharp reduction in demand from the EU.

Take TNG, a clothing manufacturer in Taiyuan, Vietnam, for example, according to the company, a French company has cancelled orders for clothing with the company. In addition, its buyers in the United States also announced that they would cancel or postpone their orders, and the accumulated orders that were cancelled or postponed would be an alarming figure. According to TNG statistics, the container that the company should have shipped to the European Union and the United States with a total value of up to US $20 million is still stuck in Vietnam and cannot be exported.

Not only is TNG, but Vietnam's other Hu Zhiming textile company, which is mainly exporting to the US, has recently connected to the US buyers' stop call, and at least stopped ordering for three weeks. In addition, Vietnamese companies are generally very worried that many enterprises in Europe and the United States claim to be delayed orders, but with the development of the epidemic, it is likely to evolve to stop orders.

This makes Vietnamese textile companies have to start thinking about reducing production lines, reducing staff work hours, and reducing staff salaries to reduce costs in order to cope with a possible large-scale withdrawal. This was unthinkable a month ago. In the early March, Vietnam's textile industry was still complacent and bought enough textile raw materials to meet the demand for production in March and April. Now, it is the same thing.

The successive suspension of orders from European and American enterprises is a great blow to Vietnam. As the third pillar of Vietnam's exports, the textile industry has always been the top priority for Vietnam's development. According to Vietnam's statistics, in 2019, the United States and the European Union accounted for two of the largest buyers of Vietnamese textiles by 45% and 13% respectively. According to Vietnam's target, Vietnam's textile exports reached US $42 billion 500 million in 2020. In fact, in the first 2 months of 2020, due to the difficulty of purchasing raw materials in China, Vietnam's textile and clothing exports did not grow as expected, but dropped by 3.5%, which was only 5 billion 300 million US dollars, which is still quite a long distance from the average monthly target value of us $7 billion 100 million.

Vietnam's dependence on China's textile raw materials is very large. According to Vietnamese statistics, in 2019, Vietnam imported 60% of its fabric and fiber market and 55% of it came from China. At the end of February, China resumed most of its raw material supply, and the Vietnamese textile industry finally succeeded in acquiring large quantities of raw materials exported by Chinese enterprises, which could roughly meet the production demand in March and April.

This makes it impossible for Vietnam to complete its export targets set in 2020. Because if Vietnam wants to achieve that goal, the average export of the textile industry in the coming month must be 3 billion 720 million dollars. At present, the withdrawal of European and American enterprises and the possible withdrawal of the epidemic in the future will make it difficult for Vietnam to achieve the export target of $42 billion 500 million. In fact, Vietnam's export target of 40 billion US dollars in 2019 has been lost, with a real value of only US $39 billion.