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China's textile and apparel exports are facing challenges

China's textile and apparel exports are facing challenges

  • Categories:Company news
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  • Time of issue:2018-06-12
  • Views:142

(Summary description)Textiles and clothing are my country's current two traditional labor-intensive export products, which account for a large proportion of my country's export products. However, since the beginning of this year, my country’s textile and clothing export situation is not optimistic.

China's textile and apparel exports are facing challenges

(Summary description)Textiles and clothing are my country's current two traditional labor-intensive export products, which account for a large proportion of my country's export products. However, since the beginning of this year, my country’s textile and clothing export situation is not optimistic.

  • Categories:Company news
  • Author:
  • Origin:
  • Time of issue:2018-06-12
  • Views:142
Information

Textiles and clothing are my country's current two traditional labor-intensive export products, which account for a large proportion of my country's export products. However, since the beginning of this year, my country’s textile and clothing export situation is not optimistic. From January to September, the cumulative export value was US$211.33 billion, a year-on-year decrease of US$10.42 billion, of which textile export value was US$81.86 billion, a year-on-year decrease of 1.5%; The value of goods was 129.47 billion U.S. dollars, down 6.7% year-on-year. This is the first cumulative negative growth in the past five years.

The labor-intensive industries represented by textiles and clothing are facing four major tests:

1. Cost advantage diminishes, corporate profits shrink

Benefiting from the abundant and cheap labor advantage in the past, our labor-intensive products have a great price advantage in the international market. However, since 2010, the growth rate of the total number of migrant workers in my country has continued to fall, and there have been difficulties in employment. At the same time, the wages of migrant workers continued to rise. From 2010 to 2014, the growth rates of migrant workers' wages were 19.3%, 21.2%, 11.8%, 13.9% and 9.8%, respectively. According to survey data, labor costs in China are 2.5 to 5 times that of Vietnam, Bangladesh and other countries. Labor costs have been rising year by year, making corporate profit margins continue to be squeezed, and some companies’ export gross profit margin has even fallen below 1%.

2. The overseas consumer market is weak and external demand is declining

At present, the global economy is still in a period of in-depth adjustment after the financial crisis, and the economy is relatively weak. In particular, the European Union and Japan, which account for nearly 30% of my country's textile and garment industry exports, have experienced a sluggish economy, and my country's orders have therefore fallen sharply. In the first half of 2015, my country’s exports of textiles and clothing to the EU and Japan fell by 8.6% and 12.5% ​​year-on-year, respectively, slowing down the industry’s export growth rate by 2.5%.

3. Emerging economies have sprung up, and international competition has intensified

Due to the weakening of the price advantage of my country's labor-intensive industries, some overseas orders have been transferred to emerging economies with lower labor costs such as Vietnam, India, Indonesia, and Cambodia. From 2010 to 2014, the average growth rate of my country's textiles and clothing exports was 12.6%, while the average growth rate of Vietnam during the same period reached 18.3%. Vietnam has become the second largest source of textiles in the United States. At the same time, Vietnam and other countries attach great importance to making a fuss about international trade policies. In May 2015, Vietnam and South Korea signed a free trade agreement. South Korea reduced tariffs on 95.43% of Vietnam’s goods including textiles. Recently, Vietnam has completed negotiations with all TPP-related countries. After the agreement is signed, textiles and clothing enjoy With zero tariffs, far lower than the current tax rate of 17% to 32%, the export market share is expected to double.

4. The original industrial model is unsustainable, and transformation and upgrading are imminent

my country’s labor-intensive industries have long followed the low-price expansion and OEM growth model of winning by volume, focusing on low-end products and processing agents, with low technical content and added value, and few independent brands. With the impact of rising labor costs and other factors, my country’s labor-intensive industries are losing their original competitiveness in some low-end markets, forcing them to upgrade in the direction of higher technological content, productivity and quality, and enterprises will face enormous challenges. Capital investment and operating risks, the survival of the fittest may intensify.

In response to the above situation, Shandong Weihai Inspection and Quarantine Bureau recommends: Export companies should strengthen product, technology and service innovation, enhance competitiveness by creating brands and innovating technology, change the business strategy of low-price competition and reliance on market-driven, and promote industry development. High-end, intelligent transformation and upgrading; making full use of national strategic opportunities such as the “Belt and Road”, qualified enterprises can carry out efficient and reasonable cross-border resource allocation, actively and steadily "go global", and improve their position in the global industrial value chain. At the same time, relevant departments should also provide enterprises with better policy and financial support, guide enterprises to analyze international market conditions, seize opportunities in the international market, and help enterprises improve export efficiency.

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