A Survey Of China'S Foreign Trade In Textiles And Clothing In The First Half Of The Year

In the first half of the year, China's exports of goods showed a good growth trend, but the profits of enterprises were generally squeezed. From the data point of view, the textile and clothing export as a whole shows a good and healthy growth trend, still growing by 12.8% under the influence of a high base, and all traditional commodity exports have achieved double growth (compared with the same period in 2020 and 2019). In the field investigation, enterprises also generally reflect that the hand orders are sufficient and the factory operating rate is full.

However, the profits of enterprises have been squeezed by the fluctuation of RMB exchange rate, the soaring of sea freight and the rapid rise of import prices of raw materials and semi-finished products. The sea freight has doubled compared with last year, and it is difficult to get one container, which leads to a substantial increase in transportation costs of enterprises and an increase in the probability of default. As of the end of July, the phenomenon of freight increase and port congestion has not been fully alleviated, which has become the biggest uncertain factor affecting exports in the second half of the year. The rising prices of raw materials in the upstream caused by global inflation did not transmit to the sales prices of downstream products. In the first half of the year, the total export prices of knitwear and woven garments decreased slightly by 0.8% year-on-year. In the domestic market, the ex factory prices of industrial producers increased by 5.1% in the first half of the year, including a decrease of 0.9% in clothing. Instead of rising, the overall level of consumer prices across the country rose by 0.5% over the same period last year, and the price of clothing remained unchanged. Under the impact of both sides, the downstream clothing enterprises, especially the small and medium-sized enterprises, are in a situation of no profit or even loss.

Excluding the sudden uncertainty factors, the probability of achieving a small increase in exports in the whole year is high. Looking forward to the second half of the year, the sustained growth of the world economy and China's economy will provide a driving force for exports.

According to the latest forecast of global economic growth rate by IMF, this year's global economic growth will reach 6%, the highest growth rate in nearly 40 years; It is expected to reach 4.4% next year, significantly higher than the average growth rate of the world economy since 1990. Among them, China is still the first engine driving global economic growth. Due to China's remarkable anti epidemic performance and rapid recovery of economic activities, the IMF predicts that China's economic growth rate will reach 8.4% this year, higher than the 6% target set by the Chinese government.

In the second half of the year, although it is hard to say that the global epidemic situation will reach a turning point, it is expected to further alleviate the situation of the continuous expansion of vaccination coverage, and the consumption will continue to recover, which will lead to the recovery of demand in key markets and promote the growth of Global trade. In addition, there are still opportunities under the epidemic. It is reported that the epidemic situation in Vietnam has become serious again recently. The government has taken isolation measures, resulting in the decline of local production capacity. Some orders are returned to China and undertaken by our enterprises, which is favorable for export. It is expected that the textile and garment export will still maintain a steady and good development trend in the second half of the year, and there is a high probability of exceeding the expected performance.

Due to the large base in the same period of last year, from the overall export data, it is expected that the export in the third quarter will be in the decline range, and the decline rate is large. However, the probability of double growth of key commodities, including clothing, yarn, fabric and home textile products, is very high. With the decline of the proportion of epidemic prevention materials in the same period of last year, the decline rate of export in the fourth quarter of this year will be rapidly reduced, and even may return to the level or growth.

Excluding the impact of accidents, it is preliminarily estimated that exports will achieve a small growth in the whole year. If we take into account the existence of uncertain factors, such as large fluctuations in exchange rates, floods in Henan, repeated outbreaks in Europe and the United States and so on, it is more likely that it will be the same as last year or slightly decreased.

Trade volume in the first half of the year increased by 13.8%

In the first half of 2021, China's textile and clothing trade volume reached 157.09 billion US dollars, a year-on-year increase of 13.8%, accounting for 5.6% of the total national trade. Among them, exports amounted to US $143.39 billion, an increase of 12.8%, an increase of 15.6% over the same period in 2019, accounting for 9.44% of China's total exports; Imports amounted to 13.7 billion US dollars, an increase of 25.6%, 13.3% compared with the same period in 2019, accounting for 1.1% of China's total imports; The cumulative trade surplus was US $129.69 billion, an increase of 11.6%, an increase of 15.8% compared with the same period in 2019, accounting for 51.6% of the total trade surplus of goods in China.

In June, the trade volume of textiles and clothing was US $30.56 billion, a year-on-year decrease of 1.7%, an increase of 15% over the same period in 2019, and a 13.1% month on month increase. Among them, exports amounted to US $28.28 billion, a decrease of 3.7%, an increase of 15.1% over the same period in 2019 and a 13.8% increase on a month on month basis; Imports were $2.28 billion, up 30.9%, 13.9% and 4.9% respectively over the same period in 2019. The trade surplus of the month was 26 billion US dollars, down 5.8%, increased by 15.2% compared with the same period in 2019, and increased by 14.7% month on month.

Cumulative export decline in the second quarter

Since the second quarter, the monthly growth rate of textile and clothing exports has gradually declined. In May, the export fell by 16.8%, and in June, the export continued to decline, but the decline rate was significantly narrowed than that in May, only 3.7%. Compared with the same period in 2019, it still maintained a rapid growth.

In the second quarter, the cumulative export of US $76.93 billion, a year-on-year decrease of 4.9%, of which textiles was the main cause of the decline. The cumulative export of textiles decreased by 27.9% year-on-year and increased by 17.2% compared with the same period in 2019. Clothing maintained a good growth trend, with the cumulative export increasing by 35.7% year-on-year and 10% compared with the same period in 2019.

The performance of the four key markets is different

The four major markets of the United States, the European Union, Japan and ASEAN together accounted for 55% of China's exports. In the first half of the year, China's exports to the United States and ASEAN maintained a relatively stable growth, while the growth to the European Union and Japan slowed down or declined.

With the gradual recovery of demand, the U.S. market tends to be stable, and exports to the United States have achieved rapid growth. From January to June, China's exports to the United States reached US $25.31 billion, up 12.8% year on year and 19.4% over the same period in 2019. Among them, the key commodities of woven clothing increased by 49.4%, decreased by 3.2% compared with that in 2019, and basically recovered to the level before the epidemic.

China's exports to the European Union have dropped sharply due to the sharp decrease in the export of epidemic prevention materials. From January to June, China's textile and clothing exports to the EU reached 21.22 billion US dollars, a year-on-year decrease of 19.1%. The average monthly decline in the second quarter was as high as 43.2%, which was mainly driven by the rapid decrease of epidemic prevention materials. In the second quarter, the export of medical masks and protective clothing to the EU decreased by 94%. The export of key commodities, knitted and woven garments, increased by 24.5%, 3.7% compared with that in 2019.

Restricted by the slow economic recovery, the Japanese market demand has not improved significantly, and since the second half of last year, Japan has taken the lead in restoring import transfer from countries other than China, which makes China's exports to Japan perform poorly. From January to June, China's textile and clothing exports to Japan reached 9.65 billion US dollars, a year-on-year decrease of 8.2%, and an increase of 6.6% over the same period in 2019. Among them, the key commodities of knitted and woven clothing increased by 9.6% year-on-year, 4.5% lower than that in 2019.

We will maintain a steady growth in exports to ASEAN and continue to increase the share of ASEAN in China's exports. From January to June, China's textile and clothing exports to ASEAN reached 22.73 billion US dollars, a year-on-year increase of 36% and an increase of 23.5% over the same period in 2019. Among them, yarn fabrics of key commodities increased by 40.8% year-on-year, 6.9% higher than that in 2019. ASEAN's share in China's textile and garment export market further increased to 15.8%, 2.4 percentage points higher than that in 2020, surpassing the EU for the first time.

The share of China's products in the three key markets fell from last year's high level, but remained at a high level. The share of key commodities in the European and American markets was still higher than that in the same period in 2020 and 2019, while the Japanese market fell back.

From January to April, 27 EU countries imported US $43.55 billion from the world, an increase of 7%. Imports from China amounted to US $14.37 billion, down 3.9%. China accounted for 33%, down from the same period in 2020 and still higher than that in the same period in 2019. Textile accounted for 43.7%, lower than that in 2020, higher than that in the same period of 2019, and clothing accounted for 28.4%, both higher than that in the same period of 2019 and 2020. Textile and clothing imports from ASEAN reached 5.75 billion US dollars, an increase of 35%, accounting for 13.2%, both higher than the previous two years. ASEAN's status has surpassed that of Bangladesh and Turkey, the EU's traditional source of imports.

From January to may, the United States imported $54.06 billion from the world, an increase of 24.9%, and the import from China was $16.29 billion, an increase of 10.9%. China accounted for 30.2%, lower than that in 2020 (34.06%) and the same period in 2019 (30.85%). Among them, textiles accounted for 36.3%, lower than the same period in 2019 and 2020, and clothing accounted for 27.9%, both higher than that in the same period of 2019 and 2020. Textile and clothing imports from ASEAN reached 14.07 billion US dollars, an increase of 37%, accounting for 26.06%, both higher than the previous two years.

The share of Chinese products in the US market has fallen, but the outlook is not very pessimistic. According to the 2021 fashion industry benchmark report released by the American fashion industry association in July, although American buyers continue to reduce their purchases from China, they still regard China as the most competitive and balanced source of procurement, and few countries can achieve the flexibility and sensitivity of China's industrial chain.

Of the US companies surveyed, 63% plan to further reduce their purchases from China in the next two years, slightly lower than 83% in 2019 and 70% in 2020. At the same time, 30% of respondents want to maintain the current volume of procurement from China, which is significantly higher than the 13% in 2019 and 25% in 2020.

From January to may, Japan imported 8.21 billion US dollars from China, a decrease of 14.4%. China accounted for 55.1%, lower than the same period in 2020, but higher than the same period in 2019. The proportion of textiles accounted for 57.6%, lower than that in the same period in 2020 and higher than that in the same period in 2019; Clothing accounted for 54.2%, both lower than the same period in 2020 and 2019. The import of textiles and clothing from ASEAN reached 4.42 billion US dollars, an increase of 2.9%, accounting for 29.7%, both higher than the previous two years.

The export proportion of epidemic prevention materials decreased rapidly

In the first half of the year, China's textile exports totaled US $69.28 billion, a year-on-year decrease of 7%, an increase of 18.2% over the same period of 2019, and clothing exports of US $74.11 billion, a year-on-year increase of 40.9% and an increase of 13.1% over the same period of 2019.

In June, the total export of medical masks and protective clothing was only 1.15 billion US dollars. From January to June, the cumulative export of 9.02 billion US dollars, a year-on-year decrease of 76.6%.

Excluding masks, textile exports increased by 48.8% year-on-year, 11.2% over the same period in 2019; Excluding protective clothing, the export of clothing increased by 54.4% year-on-year, 11.5% higher than that in 2019.

The overall performance of bulk commodities was good, with yarn, fabrics, home textiles and other textiles except for masks, as well as clothing growth. Among them, the export volume of knitted and woven garments increased by 37%, 4.8% compared with that in 2019. One of the most prominent is sportswear. Under the relief of the epidemic situation, the export of sportswear (including swimsuits) has grown rapidly. From January to June, China's export of sportswear to the world increased by 50.23% year-on-year, 10.8% higher than that of the same period in 2019. Since March, the growth rate has expanded rapidly, and the monthly growth rate in the second quarter has reached or nearly doubled. It shows that with the opening of public activities, the demand for outdoor sports clothing in the global market rebounds, and even forms a retaliatory growth to a certain extent.

Yarn exports increased by 48.8% and 1.9%, while fabric exports increased by 48.6% and 4.7% respectively.

The proportion of epidemic prevention materials in exports fell rapidly. In the first half of the year, the proportion of medical masks and protective clothing exports in total textile and clothing exports has rapidly dropped to 6.3% from 22.4% last year. Among them, the proportion in June has dropped to 4.05% (2.5% in 2018 and 2.7% in 2019) in June, which is in sharp contrast to the proportion of 54.2% in May last year. The impact of epidemic prevention materials on the overall export trend is gradually weakened, and the textile and garment export will further return to the pattern dominated by traditional bulk commodities in the second half of the year.

Note: the statistics of masks and protective clothing are based on the HS8 code of Chinese customs, and the statistical caliber is slightly larger.

Exports of major provinces and cities increased rapidly

In the first half of the year, all the top five export provinces and cities achieved rapid growth, with double-digit growth except for Guangdong. Zhejiang, Jiangsu, Shandong and Fujian increased by 18.9%, 11.7%, 28.5% and 35.7% respectively. Hebei, Jiangxi, Xinjiang and other places increased by 50% or more.

In terms of geographical regions, the eastern region is still the main driving force of export growth. In the first half of the year, the cumulative export growth of the eastern region was 13.9%, while that of the western region was 30.7%. The central region fell back from the high base last year, with a decrease of 2.9%.

Import prices of bulk commodities rose

In contrast to the decline of export growth after entering the second quarter and negative growth for two consecutive months, the import of textile and clothing has maintained a high-speed growth for four consecutive months since March, and the growth rate from April to June has exceeded 30%. The cumulative import growth in the first half of the year was 25.6%, far exceeding that of exports. Affected by the epidemic situation, international personnel mobility has been greatly reduced, foreign procurement has stopped, and domestic consumers' pursuit of foreign clothing accessories has led to the rapid expansion of clothing imports.

In the first half of the year, clothing imports increased by 55.1%, driving the overall import growth by 19 percentage points. The proportion of clothing in imports further rose to 42.5%, 2.4% higher than that in 2020 and 6.2% higher than that in 2019.

The cumulative growth of textiles was 10.2%, of which yarn, fabric and household textiles increased by 44.2%, 14.9% and 29% respectively.

Price rise is an important factor leading to import growth. Among the garments, only the import price of chemical fiber clothing rose relatively slowly. The import price of clothing made of other materials increased by more than 20%, and that of silk and wool clothing increased by more than 50%. Yarn fabrics and other import prices have also increased to varying degrees.

Monthly import price of cotton reached a record high

From January to June, cotton imports grew rapidly as a whole, with a cumulative import of 1.547 million tons from the world, an increase of 72.1% year-on-year. All imports from the United States, Brazil, India and Burkinabe all grew rapidly, while imports from Australia decreased by 67.2%. In the first half of the year, the average import price was 1820 US dollars / ton, up 4%.

In June, the import volume of cotton was the same as that of the previous month, with 172 000 tons of cotton imported in the same month, with a year-on-year increase of 90.6%. The price of imported cotton has risen month by month since November 2020, and further accelerated in the second quarter of this year. In June, it rose to 2040 US dollars / ton, again setting a new high since January 2020.

According to the information released by China Cotton Association, in June, the state continued to introduce measures to strictly control the rise of bulk commodity prices, and the overall opening rate of textile enterprises remained high, and the domestic cotton price was stable and rising. In June, the average price of China's cotton price index (ccindex3128b) was 15985 yuan / ton, up 35 yuan / month on month and 4027 yuan / ton year-on-year. Affected by the rise of bulk commodities, the international cotton price rose more than that at home, and the difference between domestic and foreign cotton prices narrowed compared with last month.