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Chamber Of Commerce For Import And Export: Analysis Of China'S Clothing Exports From January To October 2023

2023/12/1 17:22:00 2

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According to Chinese customs statistics, from January to October this year, China's clothing (including clothing accessories, the same below) exports totaled US $133.48 billion, down 8.8% year on year. The export in October was 12.26 billion US dollars, down 8.9% year on year. Influenced by the sluggish international demand, the intensification of the trend of "de Chinesization", and the high base in the first half of last year, clothing exports have delayed the recovery trend, and the trend of returning to the pre epidemic scale from last year's export peak is obvious.

　　 January October China's clothing exports

The export trend slowed down significantly in the second half of the year

Against the backdrop of lower external demand and accelerated adjustment of the global textile and clothing supply chain, China's clothing export scale accelerated its return to the pre epidemic export scale in the second half of this year after a three-year growth dividend period of the epidemic. In the first half of this year, China's clothing exports fell by 6.1% year on year, but still increased by 17.6% compared with the same period of 2019 before the epidemic, maintaining a high historical level on the whole. Since the second half of the year, the export of textile and clothing has further slowed down. From July to October, the year-on-year decline expanded to 12%, and only increased by 1.5% compared with the same period in 2019. In particular, exports in October even slightly decreased by 0.7% compared with the same period in 2019, further indicating the official end of the epidemic dividend.

　　 The export amount and unit price of woven and knitted clothing both declined

The year-on-year decline of woven clothing exports was less than that of knitted clothing, and the average export price was also higher than that of knitted clothing. From January to October, the export of woven clothing was US $56.83 billion, down 8% year on year; The export volume was 10.23 billion, down 3.8% year on year; The export price decreased by 4.5% year on year. The export of knitted apparel reached US $59.12 billion, down 9.9% year on year; The export volume was 17.46 billion, down 3.1% year on year; The export price dropped 6.9% year on year. The export of clothing accessories was US $13.44 billion, down 2.9% year on year.

　　 Cotton clothing exports continued to decline

It has been more than a year since the implementation of the "border related act" of the United States, and the export of China's cotton products to major developed markets has continued to decline significantly. From January to October, China's export of cotton knitted apparel reached 20.61 billion US dollars, down 18% year on year; The export of cotton tatting clothing was US $16.98 billion, down 6.8% year on year. Exports of cotton knitted and woven garments to the United States declined by 24.7% and 19.2%, to the European Union by 30.9% and 20.7%, and to Japan by 25.5% and 23.5%, respectively. Chemical fiber clothing has become the dominant product in China's clothing export, with the export amount nearly twice that of cotton clothing, and the decline is lower than that of cotton clothing. From January to October, the export of chemical fiber knitted clothing was 31.49 billion US dollars, down 4.6% year on year; The export of chemical fiber woven clothing was 33.4 billion US dollars, down 7.8% year on year.

　　 Export of major categories declined by different extents

From January to October, among the major clothing export categories, except for scarves/ties/handkerchiefs, the export of other clothing categories declined by varying degrees. The exports of overcoats/winter clothes, sweaters, underwear/pajamas, sportswear and baby clothes all declined in double digits, with a decline of 17.7%, 11.8%, 9.6%, 14.2% and 22.1% respectively.

　 Export growth against the trend of the "Belt and Road" market

From January to October, China's clothing exports to western developed economies (the United States, Canada, Europe, Japan, Australia and New Zealand) reached 77.33 billion US dollars, down 15.3% year on year; Accounting for 57.9%, a year-on-year decrease of 4.5 percentage points. The export to the United States was 28.55 billion US dollars, down 13.9% year on year; Accounting for 21.4%, a year-on-year decrease of 1.3 percentage points. Exports to the EU reached US $22.53 billion, down 21.5% year on year; Accounting for 16.9%, a year-on-year decrease of 2.7 percentage points. Exports to Japan reached US $10.85 billion, down 13.3% year on year; Accounting for 8.1%, a year-on-year decrease of 0.5 percentage point. Since the second half of this year, exports to ASEAN have continued to grow negatively, and the decline in exports in a single month has become an expanding trend. In October, exports to ASEAN fell significantly by 30.6%. From January to October, the cumulative export to ASEAN was 12.49 billion US dollars, down 1.4% year on year, accounting for 9.4%, up 0.7 percentage points year on year.

From the perspective of major regional markets, from January to October, exports to countries along the "Belt and Road" reached US $38.34 billion, up 3.1% year on year. Exports to RCEP member countries reached US $33.96 billion, down 6% year on year. Exports to the six GCC countries in the Middle East reached US $4.47 billion, down 7.1% year on year. Exports to Latin America reached US $7.42 billion, down 7.3% year on year. Exports to Africa reached US $7.38 billion, up 15.7% year on year. Exports to the five Central Asian countries reached US $10.86 billion, up 17.6%, of which exports to Kazakhstan and Tajikistan increased significantly by 70.8% and 45.2% respectively.

From the perspective of major single country markets, from January to October, exports to Russia reached 3.55 billion US dollars, up 17.7%; Exports to South Korea, Australia, the United Kingdom and Canada were US $5.6 billion, US $4.48 billion, US $4.14 billion and US $2.12 billion, down 0.8%, 4.8%, 18.8% and 22.8% respectively.

Judging from the export situation in October, China's clothing export to the United States was 2.57 billion US dollars, up 6.6% year on year, and growing for two consecutive months. It shows that the destocking of the United States is almost over. In addition to the low base last year, China's exports to the United States began to show signs of stabilizing. The export to EU was 1.73 billion US dollars, down 15.9% year on year, and the export to Japan was 1.04 billion US dollars, down 31.7%.

　　 The export of eastern provinces and cities declined, and the central and western regions grew rapidly

From January to October, the top five export regions in the east showed a downward trend, while the export of export provinces and cities in the central and western regions grew rapidly. Zhejiang, Guangdong, Jiangsu, Shandong and Fujian exported US $28.74 billion, 205.2 billion, 16.73 billion, 14.95 billion and 11.52 billion respectively, down 3.7%, 16.6%, 19%, 7.9% and 15.2% year on year respectively. The top five export provinces and cities accounted for 69.3% of the country in total, a year-on-year decrease of 2.4 percentage points. The export of 20 provinces and cities in central and western China totaled US $28.62 billion, up 4.3% year on year, accounting for 21.4% of the total export, 2.6 percentage points higher. Among them, Xinjiang, Hubei, Guangxi and Sichuan exported US $107.2 billion, 2.66 billion, 2.52 billion and 2.1 billion respectively, up 24.2%, 19.8%, 28.4% and 46.2% respectively.

From the export data of the single month in October, the top five export provinces and cities in the east, except Zhejiang, declined year on year. Since August, Zhejiang's exports have been growing for three consecutive months, with a year-on-year growth of 0.4% in October. In October, the exports of Guangdong, Jiangsu, Shandong and Fujian decreased by 32.9%, 20.6%, 16.6% and 0.3% respectively.

　　 China's market share in developed countries continues to decline

The trend of "de sinicization" has spread from the United States to developed markets such as Europe and Japan, which has accelerated the decline of China's clothing market share in major developed countries this year. From January to September, China accounted for 22.8% of America's clothing imports, a year-on-year decrease of 1.6 percentage points; Its share in the EU was 27.9%, down 2.1 percentage points; Its share in Japan was 51.6%, a decrease of 3.5 percentage points; Its share in the UK was 24.1%, down 2.1 percentage points; Accounting for 58.7% of Australia, down 3.1 percentage points; Its share in Canada was 30.6%, down 1.4 percentage points. In the developed country market, the market share of South Korea and Switzerland only increased, accounting for 33.3% of South Korea's market share, an increase of 0.5 percentage point; It accounted for 25.9% of Switzerland's imports, a slight increase of 0.1 percentage point.

　 02. International market situation

　　 Imports in developed markets continue to decline

Clothing imports from the United States and the European Union continued to decline, with double-digit year-on-year declines. From January to September, the United States imported $69.73 billion of clothing, down 24% year on year. EU clothing imports reached US $72.64 billion, down 13.6% year on year. Japan imported 19.39 billion dollars of clothing, down 3.1% year on year. UK clothing imports reached US $16.21 billion, down 14% year on year. South Korea imported 9.74 billion dollars of clothing, down 1.3% year on year. Australia's clothing imports reached US $6.52 billion, down 10.1% year on year. Canada imported 9.11 billion dollars of clothing, down 10.8% year on year. Among the major developed markets, only Switzerland's clothing imports increased slightly, with imports of US $6.6 billion, up 3.2% year on year.

　 Vietnam's exports are beginning to improve

Affected by the sluggish demand of major international consumer markets, the exports of major clothing suppliers are generally unsatisfactory. The first three quarters of 2023 are the most difficult period in the history of Vietnam's textile and clothing industry. Although the situation of textile and clothing exports has improved recently, the speed is very slow, or even stagnation, especially in the clothing field. By the end of October, Vietnam's total textile and clothing exports had exceeded US $33 billion, down 12.45% from the same period in 2022 (October was more optimistic, with exports exceeding US $3.2 billion, up 5.28% from September and 2.96% from the same period last year). From January to September, Turkey's clothing exports reached US $14.42 billion, down 4.5%; India's clothing export was 11.9 billion US dollars, down 13.5%; Indonesia's clothing exports reached US $6.45 billion, down 18.7%.

　 03 Trend Outlook

Since the beginning of this year, the global economic recovery has been lacking in momentum, with frequent anti globalization and local unrest, and the supply chain has been deeply adjusted, which has led to an increase in uncertainties and continued to weaken consumer confidence. WTO economists predict that global commodity trade volume will grow by 0.8% this year, less than half of the 1.7% growth predicted in April.

On November 29, the Organization for Economic Cooperation and Development (OECD) released the latest economic outlook report. It is expected that global economic growth will slow slightly next year, but the risk of a hard landing of the global economy has weakened. The OECD predicts that the global GDP growth rate will reach 2.9% in 2023, but it will slightly decline to 2.7% in 2024, and rise to 3% in 2025 with the reduction of interest rates by major central banks and other factors. The OECD predicts that the United States will begin to cut interest rates in the second half of 2024, and the Eurozone will start to cut interest rates in the spring of 2025. This is in sharp contrast to the market expectation that the Federal Reserve and the European Central Bank will loosen policies as soon as the first half of next year. The main reason is that the OECD believes that the European and American central banks will wait until they are convinced that the inflation pressure will drop permanently before easing interest rates. The global economy still needs to face sustained inflation and weak growth expectations. In the short term, there will be great differences in economic growth among countries.

　　 The US economy is growing fast

The economy of the United States grew rapidly in the third quarter, and its GDP rose faster than expected on a month on month basis. The month on month annualized rate was 4.9%, higher than the previous value of 2.1% and the expected 4.3%. Although the risk of a hard landing in the United States has eased, the OECD said that in view of the weakness of the real estate market, high oil prices and sluggish loans, the risk of economic recession has not been eliminated. The OECD predicts that the GDP growth rate of the United States this year will be about 2.4%, and will significantly decline to 1.5% next year. By 2025, it will slightly rise to 1.7% with the interest rate cut by the Federal Reserve.

According to the US Department of Commerce, retail sales in October fell 0.1% month on month, the first month on month decline since March. The decline in retail sales in October indicates that the summer consumption boom is cooling down when it enters the holiday shopping season, but it is still better than expected, indicating that American consumers still have some spending power. In October, the retail sales of clothing stores were 26.11 billion US dollars, unchanged month on month, up 0.8% year on year. In September, the inventory/sales ratio of clothing stores in the United States was 2.39, an increase of 1.7% over the previous month. The inventory level of major brand retailers declined significantly. De stocking is expected to end in the third and fourth quarters.

　　 The Eurozone lowered its economic growth expectations

The European Commission recently released its economic outlook report for the autumn of 2023, lowering the economic growth expectations of the EU and the euro area this year and next. The report predicts that the EU's GDP growth rate will be 0.6% in 2023, and that the EU's economic growth will be 1.3% in 2024, both lower than previously expected. According to the OECD, as Germany, the largest economy in the region, gets out of recession this year, the economic growth of the euro area will rise from 0.6% this year to 0.9% in 2024 and 1.1% in 2025. Due to the high level of bank financing in the euro area, the overall impact of interest rate hikes is still uncertain, and the drag on economic growth may exceed expectations.

According to Eurostat data, the euro zone's CPI grew 2.9% year-on-year in October, down from 4.3% year-on-year in September. Core CPI increased by 4.2% year on year, also lower than the previous 4.5% year on year. The report points out that under the influence of high cost of living, weak external demand and monetary tightening, the European economy may have lost its growth momentum this year. According to the latest Eurostat data, retail sales in the Eurozone fell 0.3% month on month and 2.9% year on year in September. The monthly decline was mainly due to the sharp decline in sales of non food products, including online sales, both of which were 1.9% lower than that in August.

　　 Japan's consumer spending continues to decline

As the only major developed economy that has not yet raised interest rates in this round of interest rate increase cycle, the OECD predicts that its economic growth will slow down from 1.7% this year to 1.0% in 2024, and then rise to 1.2% in 2025. According to the survey of the Ministry of General Affairs of Japan, the average household consumption expenditure of households with more than two people in September was 283000 yen (about 14000 yuan), which was 2.8% lower than that of the same period last year after excluding the factors of price changes. Japan's household consumption expenditure decreased for seven consecutive months. Affected by rising prices, the trend of reducing expenditures on food, housing, furniture, household goods and many other categories continues. From January to September, Japan's textile and clothing retail sales totaled 6.1 trillion yen, up 0.2% year on year.

At present, China's clothing exports are facing three major problems. First, the global economy has declined significantly, and foreign demand has declined significantly; Second, economic and trade frictions such as "de Chinesization" intensified, and industrial transfer accelerated; Third, the exchange rate is unstable and the trade risk increases. In particular, since November, the RMB has started to appreciate rapidly, hitting a new high for more than five months, and may continue to rise in the future, posing a certain challenge for export enterprises to take orders and make profits next year. From the perspective of major markets, the digestion of American clothing inventory is coming to an end, and imports are expected to pick up; There is little hope for market recovery in EU and Japan; Central Asia and Russia will slow down their growth momentum due to their high base and limited market space last year. Although the clothing export base was relatively low in the fourth quarter of last year, the clothing export was still not optimistic in the face of multiple pressures. At the same time, we also see that with the arrival of Halloween, Thanksgiving, Christmas and other important western festivals, the demand of major consumer markets will rise, bringing a new upsurge to China's clothing exports. Especially, with the support of cross-border e-commerce, overseas warehouses and other new forms of foreign trade, clothing enterprises are facing new opportunities to go overseas.