Attention: International Development Trend Of Export Textile Enterprises In 2021

The outbreak of new crown pneumonia has a profound impact on the world economic development in 2020. Under the background that China has taken the lead in curbing the spread of the epidemic and rapidly and comprehensively returning to work and production, through the joint efforts of the upstream and downstream of the industrial chain, China's textile and garment export enterprises have withstood the impact of the poor world international trade environment and achieved rapid export growth throughout the year, which has become an important driving force for the growth of China's goods trade.

China's textile and clothing foreign trade enterprises have experienced the tempering in 2020, and their pressure resistance has been significantly enhanced, and they have established strong confidence in realizing the export target in 2021.

Looking forward to 2021, what challenges will China's textile and clothing foreign trade enterprises face in terms of export and what problems should be paid attention to?

The expectation of RMB appreciation deserves attention

As China took the lead in controlling the epidemic, the economy recovered rapidly and the RMB appreciated all the way. From June to December 2020, the RMB began to appreciate. In these seven months, the exchange rate of RMB against the US dollar rose by more than 6000 points. Looking forward to 2021, analysts believe that international capital favors RMB assets, market forces should be in the state of promoting strong RMB appreciation, and the RMB appreciation rate will probably continue in the first half of the year.

The depreciation of US dollar and the appreciation of RMB affect the nerves of textile and garment enterprises. "All the orders signed by export enterprises are in US dollars. If the RMB continues to appreciate, some orders will not be profitable or even lose money." A person in charge of a medium-sized textile and clothing export enterprise from Jiangsu said that, coupled with the rise in raw materials and shipping freight, the pressure on the enterprise's operation increased sharply.

The business staff of a small foreign trade enterprise engaged in the export of masks and other textiles in Zhejiang Province said that the continuous appreciation of the RMB in recent years has reduced the company's profits by 7% to 8%, and some of its products are in a state of loss. Previous orders have been unable to raise prices, exchange rate fluctuations caused by the loss can only be borne by themselves.

The person in charge of a medium-sized enterprise specializing in children's clothing export in Fujian said that in order to avoid the exchange rate risk, the price of export products increased by about 5%, and some customers could not accept the price increase, which led to the company losing some orders. "Some of our products have very low profits, customers are not willing to bear the risk of exchange rate fluctuations, and enterprises can not sell at a loss." She said.

It is worth noting that some large foreign trade enterprises have adopted foreign exchange locking, hedging and other financial instruments to avoid risks, while small and medium-sized foreign trade enterprises lack financial resources and professional skills to cope with frequent exchange rate fluctuations. How to deal with the exchange rate fluctuations has become an obstacle for small and medium-sized export textile and clothing foreign trade enterprises in 2021. If the RMB continues to appreciate, it may also affect the good export situation since the second half of 2020.

In order to avoid the risk of exchange rate fluctuations, some professionals suggest that RMB pricing and settlement or appropriate foreign currency pricing and settlement can be selected instead of relying too much on US dollar settlement. At present, some textile and clothing foreign trade enterprises have begun to use RMB settlement to avoid the risk brought by the fluctuation of the US dollar exchange rate. For buyers from Southeast Asian countries, Chinese textile export enterprises have already started to use RMB for settlement. In addition, there are also many foreign trade textile enterprises in Africa using RMB for settlement. In recent years, the acceptance and range of RMB are becoming larger and larger, which is worthy of attention of export textile enterprises.

Export potential to be tapped in post epidemic Era

2020 is a special year, affected by the epidemic situation, China's textile and clothing export fluctuates greatly. In 2020, the sudden outbreak of new crown pneumonia caught the world by surprise. At a time when many countries in the world are still under the severe impact of the epidemic and the market economy recovers slowly, China will give full play to its institutional advantages, curb the spread of the epidemic in a timely manner, and export textile enterprises are not afraid of difficulties to organize production and vigorously deliver anti epidemic materials to all parts of the world. Under the pull effect of global demand for epidemic prevention materials, textile export including masks in the first half of last year has indeed played a greater role in promoting China's textile and clothing export as a whole. Subsequently, affected by the second wave of epidemic, overseas production faced stagnation. The huge "magnetic attraction" formed by the stable industrial chain supply chain system of China's textile and clothing industry made some international orders begin to flow back, and quickly assumed the responsibility of producing orders for the whole world. From the third quarter of last year, many foreign trade orders of clothing factories began to recover or saturate, and even burst orders 。

So, in 2021, can this export momentum continue and continue?

It can be predicted that first, the international market procurement direction will return to normal track with the improvement of the epidemic situation. Due to the strong and stable supply capacity of China during the outbreak of the epidemic, the main export markets in the world temporarily stopped the pace of purchasing outward, and the focus will be returned to China. The international market share of China's textiles and clothing has rebounded. However, with the gradual alleviation of the epidemic situation, the European Union, the United States, Japan and other markets have turned their attention to ASEAN, South Asia, and countries and regions with geographical advantages, and the market share of Chinese products may fall. Export textile enterprises should pay attention to the change of purchasing trend, arrange in advance and deal with it well.

Second, epidemic prevention materials are still an important force to boost export growth. At present, the global epidemic situation is still uncertain. Although China's export of epidemic prevention materials has dropped down compared with the peak period, it will still maintain the characteristics of large-scale and high growth, which is still the main force to promote the export growth. According to WTO data, in many major markets, China's masks account for more than 2 / 3 of the country's total imports of masks. In the United States and Italy, China's masks account for nearly 3 / 4 of the total imports of these two countries, and in Japan it accounts for 80%.

Third, the cross-border e-commerce platform for textile and clothing will be further developed in the post epidemic era. Affected by the epidemic situation, online purchasing and trading will become the main way for export textile enterprises to open up orders in 2020, and online exhibitions will attract more attention. Some experts predict that foreign trade orders will be more fragmented, small orders will become the mainstream, and the survival space of pure trade foreign trade enterprises will be narrower and narrower. China's foreign trade textile enterprises, especially B2B foreign trade enterprises, should adjust their product lines and reposition their customers.

"From outside to inside" seeking benefit from high quality

At present, speeding up the formation of a new pattern of high-quality development with the domestic big cycle as the main body and the domestic and international dual cycle promoting each other has become the theme of China's economic and social development. Not long ago, nearly 70 foreign trade enterprises in Hunan participated in the "export products to domestic sales" exhibition and docking activities. The purpose of this activity is to give full play to the guiding role of the government and the main role of enterprises. With the help of the pilot market platform of new foreign trade formats, foreign trade enterprises can cope with operational risks during the epidemic period, build a domestic sales platform, accurately meet domestic consumption demand, and support marketable export products to expand the domestic market.

In fact, as early as the Sino US trade frictions, some textile and garment foreign trade enterprises have consciously shifted their focus from foreign trade to domestic trade. The person in charge of a fabric production enterprise in Zhejiang said that in previous years, their orders were 80% of foreign trade and 20% of domestic trade. However, last year, affected by the epidemic situation, on the other hand, they consciously opened up new customers. Therefore, they gradually shifted their focus to domestic trade. At present, domestic trade has accounted for more than 70% of the total trade volume.

It should be noted that today's world economic environment is still deeply affected by the epidemic, and the textile and clothing industry is facing the dilemma of slow recovery of the end consumer market, especially the poor overseas economy, which leads to the rising unemployment rate and the number of bankrupt enterprises in some countries. Once the epidemic is repeated, it is easy to press the "pause" button again in foreign trade activities. Therefore, China's textile and clothing export enterprises should not put eggs in one basket. While developing overseas orders, they should also pay attention to the development of the mainland market, actively seek benefits from high quality and share business risks. The transformation to high-quality development is the way to realize the new development pattern of "double cycle".

A large textile and clothing export enterprise from Jiangsu Province has done a good job in this respect. In the aspect of external circulation, the enterprise, relying on the advantages of a complete industrial chain, is facing difficulties, speeding up the transformation and upgrading, and continuously enhancing its competitiveness in the global industrial chain reconstruction. Among them, the supply chain platform economic model has become a new bright spot in the growth of foreign trade. It takes the economic model of supply chain platform as the core of transformation and upgrading, extends to both ends of the industrial chain, continuously enhances the efficiency of the supply chain, actively makes full use of its own advantages and the comparative advantages and market space of other countries and regions, promotes the extension and upgrading of the supply chain, and creates a new pattern of international division of labor with high starting point intervention and high-end link extension.

In terms of internal circulation, the company gives full play to the advantages of domestic scale market, deeply studies and judges the market trend, expands and strengthens the domestic market with advanced technology and medium and high-end functional products, and explores new growth points.