Economic Operation Of China'S Garment Industry From January To April 2022

In April, the domestic epidemic situation spread in many places, the supply chain of the industrial chain was blocked and stuck, and the domestic and foreign market expectations weakened. The production of China's clothing industry fluctuated slightly, the decline of domestic sales deepened, the growth rate of export slowed down, and the economic operation was under severe pressure. However, with the strict implementation of the policy of dynamic clearance of the epidemic situation and the intensive introduction of policies and measures by the state and local governments, the supply chain of the industrial chain is gradually unblocked and the market vitality is gradually restored. Enterprises should speed up their own adjustment, grasp the current policy opportunity period, market recovery period and overseas layout period, actively respond to and resolve various risks and challenges, and resume the normal operation of production and operation as soon as possible, Efforts should be made to ensure that the overall economic operation of the industry maintains a stable recovery trend.

　　 1. Economic operation of clothing industry

　　 Production growth fluctuated slightly

Affected by the shutdown and production reduction of enterprises in some regions due to the epidemic situation and the weakening of market demand, although China's garment production has maintained growth, the growth rate of production has dropped significantly. In April, the industrial added value of Enterprises above Designated Size in the clothing industry decreased by 0.3% year-on-year, which was the first negative growth since 2021. According to the data of the National Bureau of statistics, from January to April, the industrial added value of Enterprises above Designated Size in China's garment industry increased by 6.2% year-on-year, and the growth rate slowed down by 7.9 percentage points compared with the same period in 2021; Enterprises above designated scale have completed 7.752 billion pieces of clothing, up 5.64% year-on-year, and the growth rate is 18.23% slower than that in the same period in 2021. In terms of categories, the growth rate of knitwear output decreased more obviously, among which the output of woven clothing was 3.156 billion pieces, with a year-on-year increase of 14.18%, and the growth rate slowed down by 3.05 percentage points compared with the same period in 2021; The output of knitted garments was 4.596 billion pieces, up 0.48% year-on-year, and the growth rate was 28.06 percentage points slower than that of the same period in 2021.

Figure 1 production growth of clothing industry from January to April 2022

Source: National Bureau of statistics

　　 Domestic sales decline deepened

Affected by the epidemic situation of domestic clothing and retail sales, domestic consumption was reduced in four months. According to the data of the National Bureau of statistics, from January to April, the total retail sales of clothing goods of units above the designated size in China totaled 292.11 billion yuan, a year-on-year decrease of 7.5%, and the growth rate was 60.1 percentage points lower than that of the same period in 2021, and the market scale was lower than the level before the epidemic. Among them, the retail sales of clothing commodities of units above the quota in April decreased by 25.6% year-on-year, 10.5 percentage points larger than that in March, which was the lowest monthly growth rate since April 2020. According to the data of China National Business Information Center, the clothing retail sales of key large retail enterprises in China decreased by 10.19% from January to April, and 39.86% in April. At the same time, the epidemic has hindered logistics and significantly inhibited online consumption. From January to April, online retail sales of wearing goods decreased by 1.7% year-on-year, 2.6% lower than that of January March and 35.5% lower than that of the same period in 2021, which is the first negative growth since August 2020.

Figure 2 the growth rate of clothing sales in the domestic market from January to April 2022

Source: National Bureau of statistics

　 Export growth slowed down sharply

Under the support of positive factors such as the stable recovery of international market demand, the lower exchange rate of RMB against the US dollar, and the entry into force of regional trade agreements, China's clothing export has maintained a steady growth. However, affected by the rebound of domestic epidemic situation, rapid repair of overseas supply chain, high prices of raw materials and freight and other factors, the growth rate of China's clothing export fell significantly in April. According to the data of China Customs, from January to April, China completed the export of clothing and accessories totaling US $47.017 billion, a year-on-year increase of 6.2%. The growth rate was 1.2 percentage points slower than that of January March and 45.5 percentage points lower than that of the same period in 2021. Among them, the export of clothing and accessories in April was $11.332 billion, up 2.4% year-on-year, and the growth rate was 8.5% slower than that in March.

Figure 3 export of China's clothing and accessories from January to April 2022

Source: China Customs

From the perspective of product category, export orders of knitted garments have an obvious trend of outward migration, and the export of epidemic prevention materials has continued to decline significantly. According to the data of China Customs, from January to April, the export value of knitwear and clothing accessories was 24.328 billion US dollars, an increase of 18.82% over the same period of last year, and the growth rate was 20.14 percentage points lower than that of the whole year of 2021; The export value of woven clothing and clothing accessories was US $20.549 billion, up 14.12% year on year, and the growth rate was 1.53 percentage points higher than that of the whole year of 2021; From January to April, the export value of gloves made of plastics and vulcanized rubber was US $1.29 billion, down 72.2% year-on-year. The export value of chemical fiber protective clothing was 360 million US dollars, down 70.1% year-on-year.

From the perspective of major export markets, China's clothing exports to the United States and the European Union maintained a steady growth, the decline rate of clothing exports to Japan was significantly expanded, and the clothing exports to ASEAN and Latin America showed a strong growth trend. According to the data of China Customs, from January to April, China's clothing exports to the United States and the European Union increased by 8.3% and 9.3% respectively, accounting for 41.7% of China's total clothing exports, driving the growth of China's clothing exports by 3.5%; The decline rate of China's clothing export to Japan continued to expand, with a year-on-year decrease of 10.4%, 3.5 percentage points larger than that of January March; China's clothing export to ASEAN increased by 19.7% year-on-year, 4.6% slower than that in January March. Over the same period, China's clothing exports to countries and regions along the belt and road and Latin America maintained a rapid growth, with growth rates of 12.8% and 37.9%, respectively, driving the growth of China's clothing exports by 2.8% and 1.8%. Exports to China, China and the United Kingdom decreased by 35.9%, 12.9%, respectively.

From the perspective of clothing export of various provinces and cities, Zhejiang and Shandong clothing export maintained a rapid growth, Guangdong Province's export decline was deepened, and the clothing export of Xinjiang, Jiangxi, Hunan and other central and western provinces increased rapidly. From January to April, Zhejiang, Guangdong, Jiangsu, Shandong and Fujian, the top five provinces of China's clothing exports, totaled 34.63 billion US dollars, an increase of 8.0% year-on-year, accounting for 73.7% of China's total clothing exports, an increase of 1.3 percentage points over the same period of last year. Among them, the export amount of Zhejiang clothing reached 9.43 billion US dollars, with a year-on-year increase of 26.3%; Guangdong's clothing export decreased by 3.2% year-on-year, 3.0 percentage points higher than that in January March; Jiangsu's clothing export increased by 0.4% year-on-year, 3.8% slower than that of January March; The clothing export of Shandong and Fujian increased by 14.3% and 5.1% respectively. Among the central and western provinces, the clothing export of Xinjiang, Jiangxi, Hunan and Sichuan provinces increased rapidly. The export growth of Xinjiang and Sichuan was as high as 113.2% and 255.8%, while that of Anhui, Hebei and Hubei provinces continued to fall sharply, with the decrease rates of 13.2%, 59.7% and 39.2%, respectively.

　　 Benefit restoration is obviously under pressure

In April, due to the short-term impact of domestic epidemic situation, severe and complex international market situation, rising operating costs and other internal and external factors, the production and operation pressure of China's garment enterprises was further increased, and the industry benefit recovery was obviously under pressure. According to the data of the National Bureau of statistics, from January to April, there were 13048 Enterprises above the designated size (annual main business income of 20 million yuan and above) in China's clothing industry, with a loss area of 28.5%, a slight increase of 0.09 percentage points compared with the same period in 2021; Operating revenue reached 444.05 billion yuan, an increase of 8.1% year-on-year, 1.2 percentage points slower than that of January March; The total profit was 19.09 billion yuan, a year-on-year increase of 1.9%, and the growth rate was 9.0 percentage points slower than that of January March. The efficiency of enterprise operation is slowing down, and the profitability is weakened. From January to April, the turnover rate of finished products of Enterprises above Designated Size in the clothing industry was 12.1 times / year, a year-on-year decrease of 4.4%; Although the proportion of three fees decreased by 0.5 percentage points compared with the same period in 2021, the operating cost increased by 9.2% year-on-year, which was 1.1% higher than the growth rate of operating income. The operating income per 100 yuan included the cost of 85.6 yuan, an increase of 0.9 yuan compared with the same period in 2021; The profit margin of operating income of garment enterprises above designated size was 4.3%, 0.3% lower than that in the same period of 2021.

Table 1 main benefit indexes of clothing industry from January to April 2022

Source: National Bureau of statistics

　　 Investment maintained rapid growth

Although the development situation of the industry is complicated, under the support of the implementation of policies such as stable growth, consumption promotion and enterprise relief, the investment confidence of garment enterprises has been restored, and the effective investment in technological transformation and upgrading, brand construction and channel layout has been actively expanded. With the low base factor in the same period of last year, the investment in China's clothing industry has maintained a rapid growth. According to the data of the National Bureau of statistics, from January to April, the investment in fixed assets of China's clothing industry increased by 36.3% year-on-year, 26.2 percentage points higher than the same period in 2021, and 20.2 and 24.1 percentage points higher than the overall level of textile and manufacturing industries.

Growth of fixed assets investment in clothing industry in 2024

Source: National Bureau of statistics

?

　　 2. Suggestions for the development of clothing industry

　　 In the period of policy opportunities, we should make rational use of the relief measures

In recent years, in order to help enterprises cope with difficulties and challenges, and further stimulate the development potential and vitality of enterprises, the state has issued intensive policies to support economic development. On April 10, the CPC Central Committee and the State Council issued the opinions on speeding up the construction of a unified national market, which is conducive to the clothing industry to give full play to the advantages of the domestic large market and industry, and promote the effective allocation of business environment and financial capital; On May 9, the office of the leading group for promoting the development of small and medium-sized enterprises of the State Council issued the "measures for strengthening the assistance of small and medium-sized enterprises to relieve difficulties"; On May 26, the general office of the State Council issued the opinions on promoting the stability and quality improvement of foreign trade, which put forward 13 policy measures in four aspects: ensuring the stability of production and circulation in the field of foreign trade, increasing financial support for foreign trade enterprises, further helping foreign trade enterprises grasp orders, expand markets, and stabilize the supply chain of foreign trade industry chain; At the end of May, the State Council issued the package of policies and measures to stabilize the economy, introduced 33 measures in six aspects, and demanded that the "package" of policies and measures be implemented as soon as possible. As the central and local governments have successively issued a series of preferential policies for enterprises and implemented them in time, they will further increase the assistance to garment enterprises, especially the small and medium-sized enterprises.

　　 Market recovery period, seize the current consumption hot spot

With the implementation of various policies to promote consumption and smooth logistics, with the increase of people's social scenes and the continuous promotion of enterprises' marketing investment and intensity, the super class commercial consumption of department stores will recover in stages, and June may become an important node of clothing consumption. Especially after the production and living order gradually recovered in June, the annual "618 e-commerce shopping festival" is regarded by many garment enterprises as an important node to stimulate consumption and regain confidence. On the one hand, enterprises quickly digest inventory and withdraw funds; On the other hand, we can use the "618" consumption trend to grasp the rhythm and characteristics of demand change, timely adjust products and optimize market supply. In addition, a series of consumer season activities jointly sponsored by the Ministry of industry and information technology and the Ministry of Commerce and participated by major e-commerce platforms will be held from July to September. The activities not only guide enterprises to make profits and benefit the people, but also help brand businesses understand the changing consumer trends and find new possibilities for brand growth. Under the background of orderly recovery of consumption, enterprises should pay more attention to the market demand for quality improvement and upgrading of consumption, seize the consumption hot spots such as "light outing" and "minority sports" catering to outdoor life, sort out the market blank points of functional household clothing under the "housing economy", study and think about how to provide more and better consumer products for the public, enrich the consumption formats, and provide more and better consumer products for the public Improve the quality of consumption and create a truly influential consumer brand.

　　 Explore opportunities in challenges during overseas layout period

At present, there are still uncertain factors in international economy and trade, and opportunities and challenges coexist in overseas markets. On the one hand, the United States is tightening its ban on cotton imports from Xinjiang. On June 21, the "Xinjiang related act" of the United States will be implemented, which will seriously affect China's cotton textile and clothing exports to the U.S. market. However, on the other hand, in May, the United States announced to restart the review of the action of imposing tariffs on China. If the tariff on Chinese goods is cancelled or reduced, it will undoubtedly bring great benefits to the domestic clothing foreign trade market, and the clothing export to the United States will usher in a turning point. In addition to the regional strategic arrangement of RCEP, it is beneficial for enterprises to take advantage of the regional economic risks of the implementation of RCEP. Under its framework, other member states have made more than 94% of China's textile liberalization commitments and China's more than 95% of its textile liberalization commitments. Among them, tariff reduction commitments, rules of origin accumulation, trade liberalization and facilitation measures will help China establish closer cooperation with Japan and other countries in the field of textile and clothing, It is beneficial for China's garment industry to expand international competition space.