Textile People Are Worried: Is There Any Hope For The Foreign Trade Market In 2021?

The foreign trade has gone through an unimaginable 2020 in a sudden fall, rise and fall.

Li Feng, the boss of Zhejiang foreign trade, remembers that in February 2020, when the epidemic was serious, he was confused about the future because of the lack of epidemic prevention materials and the proposal to delay the resumption of work. Whether to start or not is a question. The partner also keeps calling to ask whether the order can be delivered on time. However, when he spent a lot of money on epidemic prevention materials and officially resumed production in late February, the global epidemic spread in March, leading to the cancellation of foreign orders one by one.

As there was no order, in April, a company in Zhuhai announced that it would take a half year holiday and resume work on October 8. Li Feng, who barely started work, was also mortally wounded by the lack of orders and was nailed to the brink of bankruptcy.

However, by the middle of the year, foreign trade orders had gradually warmed up, and people in charge of foreign trade enterprises, represented by Li Feng, had finally breathed a sigh of relief.

However, no one expected that such a recovery would accelerate in the second half of the year. At the end of the year, the number of orders could not even be met. All major foreign trade enterprises were recruiting temporary workers to work overtime to complete orders.

It is not difficult to see from the data that in the first three quarters of 2020, China's import and export data went from - 6.5% to - 0.2%, and then to 7.5%, and foreign trade has gone through a bright reversal curve.

According to the estimation of the Ministry of Commerce, the total import and export volume of China's trade in goods is expected to reach about 32 trillion yuan in 2020, and the actual use of foreign capital throughout the year will exceed 140 billion dollars. The total import and export volume, international market share, and foreign capital attraction will all hit a new record.

Now, on average, 60 million yuan of goods enter and leave the country every minute. According to WTO data, China's international market share will further increase in 2020, which will exceed the historical peak of 13.8% in 2015. This will stand out under the dual pressure of the global economic recession and the COVID-19 epidemic, which may also affect the proportion of China's foreign trade in the world in the future.

Bottoming

"At the beginning of 2020, the epidemic prevention work was under great pressure, and the orders were extremely shrinking. We all felt that we were going to be unable to sustain it and might go bankrupt soon." Li Feng was worried when he was interviewed by the Huaxia Times.

Foreign trade is coming to the most difficult moment in history, from being unable to deliver the orders after suspension of production to being short of orders after resumption of production. Peers kept talking to each other on the phone, but they could only get the same notifications: "goods suspension", "order cancellation", "subsequent production suspension".

Although the impact of the epidemic has penetrated all walks of life, like foreign trade enterprises, few industries were affected by the domestic epidemic in February and the international epidemic in March.

Open the website where foreign traders gather, and there is a lot of wailing on it. Some well-known foreign trade enterprises collapsed, while others tried hard to transform. However, no matter which way they choose, Chinese foreign trade enterprises will suffer in the first half of 2020. The spreading epidemic situation makes foreign trade enterprises lose sight of the future.

Under heavy pressure, in April, Zhuhai Jinghao Electronic Technology Co., Ltd. and Shenzhen Huaxin Microelectronics Co., Ltd. successively announced a "long holiday" to "renew the life" of enterprises without orders by reducing consumption.

However, Li Feng chose to continue to produce products that could not be sold. "The factory can persist for a while and pay workers a little".

On June 9, Premier Li Keqiang chaired the executive meeting of the State Council to help foreign trade enterprises to rescue, encourage enterprises to expand the international market, and support marketable export products to expand the domestic market.

However, Gao Feng, a spokesman for the Ministry of Commerce, also said frankly that due to the different domestic and foreign trade market environments, foreign trade enterprises face some specific difficulties in expanding the domestic market, such as difficulties in expanding sales channels, turning production lines and brand building.

"Many domestic foreign trade enterprises mainly do OEM, that is, they take orders and then produce according to orders. They have neither their own R&D team nor a special sales team. They are not familiar with the rules of market access, sales, settlement, etc. It is difficult to win domestic orders and do domestic trade." Li Feng said.

However, in order to survive, we have to do it no matter how difficult it is. Domestic manufacturers of foreign well-known brands have begun to switch to domestic trade. Transformation became the key word that foreign trade enterprises could not get around in the first half of the year.

Warming up

But no one expected that after the dark moment of "order shortage" in April and May, Chinese foreign trade enterprises suddenly felt warm in the traditional off-season of foreign trade in June and July.

According to the import and export data released by the General Administration of Customs, in June, import and export increased by 5.1% year on year, including export growth of 4.3% and import growth of 6.2%, both achieving positive growth.

The domino in the foreign trade chain has affected the fate of many enterprises. In the view of Zhang Jianping, deputy director of the Academic Committee of the Research Institute of the Ministry of Commerce, in 2020, China will effectively help our foreign trade enterprises to overcome difficulties through a series of policies such as stabilizing foreign trade, stabilizing foreign capital, and protecting market entities.

Shao Yu, chief economist of Orient Securities, said: "China's overall foreign trade performance is far beyond market expectations." Prior to this, the WTO predicted that the trade volume would decline by 30% - 40% in 2020. However, China has achieved growth against the trend.

Li Feng's factory also welcomes customers who constantly inquire. "There are more and more people making inquiries, and the number of orders has also increased. In July, we have five counters to go out. Compared with the traditional off-season of foreign trade in previous years, the foreign trade situation in 2020 has begun to improve." Li Feng said.

According to the data of the State Administration of Foreign Exchange, in July, China's international trade in goods and services in terms of international balance of payments received 1757.4 billion yuan and spent 1381.8 billion yuan. Among them, the trade surplus in goods was 451 billion yuan, and the trade deficit in services was 75.4 billion yuan.

Also at this time, in order to further stabilize foreign trade, high-level meetings were held for two consecutive days. On July 29, Premier Li Keqiang chaired the executive meeting of the State Council, deployed to further expand openness and stabilize foreign trade and foreign capital, and decided to deepen the pilot project of innovative development of service trade; On July 30, at the regular press conference of the Ministry of Commerce, Gao Feng said that he would introduce new policies and measures in time to do a good job in stabilizing foreign trade.

"In the second half of the year, the situation is more complicated and severe. The Ministry of Commerce will step up the implementation of various support measures, study and introduce more new policies and measures, effectively enhance the sense of gain of foreign-funded enterprises in foreign trade, and firmly stabilize the basic market of foreign trade and foreign investment." Ren Hongbin, assistant minister of the Ministry of Commerce, said in his outlook.

Explosion

8. In September and October, Chinese foreign trade enterprises suddenly ushered in a good day for several years.

Due to the impact of the epidemic, overseas production is facing stagnation. China has assumed the responsibility of producing orders for the whole world. Many textile foreign trade factories have broken orders, and even some factory orders are scheduled for May 2021.

"Orders began to return, and the turnover for two consecutive months was twice that of the same period in 2019, of which the production capacity in August was close to 300000 pieces, reaching 15% of the annual production capacity in 2019." The head of a foreign trade clothing factory in Panyu said.

With the sudden outbreak of the textile market, the entire foreign trade industry has been "lit", and orders for digital electronic products, leather shoes, large machinery and other products have also continued to rise. Especially in the traditional peak season of European and American markets in September, the purchase of Thanksgiving Day and Christmas materials brought a large number of orders, and the online demand also increased.

"In recent months, the road has turned from peak to peak, and orders have soared. We even need a large number of workers to work overtime to complete orders." Li Feng said.

Where there is an order, there is production, and where there is a production enterprise, it is revitalized.

In Zhang Jianping's view, at present, China's exports to other countries have formed a substitution effect, so the export counter trend has greatly increased. Before the global epidemic is controlled, this substitution effect will continue for a period of time. Therefore, China's foreign trade is expected to maintain a certain speed in 2021!