In May, The PMI Index Increased, And The Trend Of Textile Trade Will Resume In The Second Half Of The Year.

It has been 5 months since the outbreak of domestic outbreaks to overseas outbreaks. Countries have taken emergency measures to prevent epidemic situation and treatment. Until now, the number of confirmed cases and infection rates has declined significantly. Therefore, many countries have begun to "unseal" and resume normal work and life. At present, foreign trade orders have returned. How about the foreign trade in the second half of this year?

Exports are one of the "three carriages" to boost economic growth. In 2019, the contribution rate of exports to China's economic growth was 11%. This year, the primary goal of the government's work is to promote "six stability" with "six guarantees". "Stable foreign trade" is very important not only for "ensuring residents' employment", "ensuring basic livelihood", "protecting market players", "protecting the industrial chain, and stabilizing the supply chain", but also relating to the export earning and foreign exchange reserves to the stability of the monetary system.

In 2020, China's heavy task of stabilizing foreign trade was severely affected by the global epidemic, the world economy was seriously slump, the industrial chain and supply chain were blocked, international trade and investment were shrunk, and commodity markets were volatile. According to the forecast issued by the World Trade Organization in April, global merchandise trade will decline by 13% in the optimistic situation in 2020, and the pessimism will drop by more than 32%, which will be accompanied by the possibility that the global GDP will decrease by 2.5%, 8.8% and two respectively.

01

New orders increased in May when the PMI index was released.

According to the National Bureau of statistics, in May, China's Manufacturing Purchasing Managers Index (PMI) was 50.6%, down 0.2 percentage points from last month.

According to the classification index, production index, new order index and supplier delivery time index are all higher than the critical point in the 5 classification indices of manufacturing PMI. Raw material inventory index and employment index are all below the critical point.

Continuous recovery of production

The production index was 53.2%, though 0.5 percentage points lower than last month, but higher than the critical point, indicating that manufacturing industry continued to improve. In the 21 industries surveyed, 14 manufacturing production indices were higher than the critical point, and 7 manufacturing industries such as textile, clothing and apparel were below the critical point. The supplier delivery time index was 50.5%, an increase of 0.4 percentage points from last month, indicating that the delivery time of manufacturing materials suppliers has accelerated. In addition, the employment index was 49.4%, down 0.8 percentage points from last month, indicating that manufacturing enterprises were less efficient than last month.

New orders increase

The new order index was 50.9%, an increase of 0.7 percentage points from last month, and a decrease in the difference from the production index. At present, the global epidemic situation and the world economic situation are still grim and complicated, and foreign market demand has been shrinking. Among them, the new export orders index and import index were 35.3% and 45.3% respectively, although they rose 1.8 and 1.4 percentage points from last month, but they are at a relatively low level in history.

Price index rebounded

The main raw material purchase price index and ex factory price index were 51.6% and 48.7% respectively, up 9.1 and 6.5 percentage points from last month, all of which are high in the past 4 months. The main raw material purchase price index has risen to above the critical point, and the purchasing price of raw materials has increased. In addition, raw material inventory index was 47.3%, down 0.9 percentage points from last month, indicating that the main raw material inventory of the manufacturing industry was reduced.

Business confidence improvement

Manufacturing enterprises' production and business activity expectations increased 3.9 percentage points from last month to 57.9%. Related industries in some industries are generally optimistic about the development trend of the industry in the next three months. In May, the composite PMI output index was 53.4%, unchanged from last month, indicating that the production and operation of Chinese enterprises improved steadily.

02

Overseas orders are still less.

Under the circumstances of a significant increase in global economic uncertainty and an overall decline in international trade, stabilizing domestic demand and giving full play to the potential of the domestic market can slow down the adverse impact on the overall economy through export to domestic sales. Expanding export credit insurance is conducive to the orderly operation of imports and exports.

At present, the decline in overseas orders is a big challenge for many export oriented enterprises. According to the feedback from the foreign trade industry, the actual overseas orders for domestic related industries are still very small, and many orders are still in the early stage of enquiry shortly after the beginning of the resumption of work in Europe and the United States. Only a few days before the inspection and the order, only the hope has just been seen, and seasonal goods such as clothing have already been washed away for very little spring and summer orders.

It is understood that the impact of external demand on different sectors of the pressure is not the same. The industry estimates the external demand of various industries in the manufacturing industry. The results show that the proportion of exports of electronics, clothing, shoes and hats, furniture and cultural and entertainment products is relatively high. These are also the industries with weaker foreign trade during the epidemic. With the gradual recovery of European and American countries in June and the marginal improvement of external demand, the time needed for overseas countries to resume work is relatively long, and the intensity should not be overestimated.

03

The trend of foreign trade is expected to resume in the second half of this year.

For export enterprises, the situation is crucial in the second half of the year. Will China's foreign trade continue to improve? China's foreign trade situation is closely related to global economic growth and trade situation. Under the overall economic downturn, China's foreign trade will also be affected. As the outbreak in the US and Europe is later than in China, the follow-up effect will continue to appear in the second half of the year. It is expected that China's trade will still be in the doldrums in the two quarter and will resume in the second half of the year. There is also optimism that the two quarter of foreign trade will recover moderately, and the trend of foreign trade in the whole year will be highly uncertain.

Many international institutions have a negative attitude towards the global economic trend in 2020. According to the latest data from the United Nations Conference on Trade and development, Global trade fell by 3% in the first quarter of 2020 compared with the previous quarter and is expected to decline by 26.9% in the two quarter. The European Commission has pointed out that Europe is experiencing economic shocks since the great depression, and the GDP of the 27 countries of the European Union will drop by 7.4% throughout the year. Japan's Economic Research Center predicted that the Japanese GDP will shrink by 11% in the two quarter in the two quarter.

Looking forward to the whole year, the overseas economy has been bogged down in mire or has brought pressure on China's exports. The United States has started large-scale shutdown and social isolation since late 3. In the two quarter of the prevention and control upgrade, the United States is facing more economic challenges. It is expected that the US GDP will shrink more than 10% in the two quarter and the unemployment rate will reach at least 15%. India, Brazil, Turkey, Russia and other emerging market economies are still unable to control the outbreak. From the global perspective, the developed countries may fall into a sharp decline from -7% to -10% in the two quarter, and the global economy will experience at least two quarters of negative growth.

China's import and export trade accounts for nearly 1/4 of Global trade and has been deeply integrated into the global industrial chain. Overseas recession will not only affect China's external demand, but also increase the risk of supply chain disruption. In particular, China is mainly exporting consumer goods and capital goods in the global value chain. If the epidemic situation falls overseas and the investment confidence is discouraged, the impact on the demand side and the industrial chain of China's foreign trade is likely to be more profound.

Affected by the epidemic, the structure of China's foreign trade has changed, and ASEAN has surpassed the European Union as China's largest export market. In January -4, China's exports to emerging markets increased by 2.2 percentage points to 50.9% over the same period last year, and the proportion of exports to traditional markets has dropped to 49.1%. The future opportunities of China's foreign trade will be mainly reflected in two aspects:

First, the new market opportunities brought about by the "one belt and one road" construction.

The two is the opportunity for innovation and development brought by the new technological revolution. Relying on technology, mode, format and management innovation, we will "squeeze out" a number of stronger Chinese foreign trade enterprises and promote the high quality development of foreign trade.

With the implementation of the strategy of expanding domestic demand, the scale of domestic economic cycle will further expand, and economic development will shift more from export to domestic demand. In the future, China's reliance on external markets, including traditional markets in the US and Europe, will be further reduced and its dependence on emerging markets will further improve.

Foreign trade will continue to play an important role in the development of China's economy, and its function will shift from "quantity driven" to "qualitative guidance". By fully mobilizing and utilizing two resources in two markets at home and abroad, the competitive advantage of foreign trade will be transformed from factor driven cost and price advantage to innovation driven comprehensive competitive advantage. Technology, brand, quality, service and standard will become the competitive factors necessary for the high quality development of foreign trade.