China's textile and clothing growth slowed significantly in April

Liang Nan, an analyst at Customs Information Network, recently revealed that due to multiple negative factors, the growth rate of China's textiles and clothing has slowed down significantly this year, and the year-on-year growth of exports in April has turned from positive growth of 18.7 per cent and 7.7 per cent in March to negative growth. He believes that the relevant parties should actively take targeted measures.

Weak demand and other factors affect China's clothing and textile exports

According to the statistics of the customs information network, in April this year, China's clothing exports were 10.39 billion billion US dollars, down 6.4 percent from the same period last year; textile exports were 8.41 billion billion US dollars, down 4.1 percent from the same period last year.

Comparing relevant data, Liang Nan, an analyst at Customs Information Network, introduced in detail the main negative factors affecting China's clothing and textile exports:

Continued weak consumer demand in the EU, the main export market, led to a decline in overall exports. Affected by the sovereign debt crisis, there is a serious shortage of consumer demand in the EU market. In February this year, the EU consumer confidence index was -20.1 and the euro zone consumer confidence index was -20.2, still in the negative range. On February 23, the European Commission lowered the EU's GDP growth forecast for 2012 from 0.5 per cent to -0.3 per cent, indicating that Europe is falling into a "mild recession. The continued weakness of consumer demand in the European market, even if the demand for my country's textiles and clothing in emerging economies has increased, it is not enough to offset the negative impact of the EU market, which directly leads to a sharp decline in my country's textile and clothing exports.

International trade protectionism continues to heat up. With the development of economic globalization, international trade exchanges are becoming more and more frequent, and trade frictions are also showing a rapid growth trend. Trade protection based on technical barriers to trade (TBT) is becoming more and more serious. The technical trade measures of China's three major trading partners, the European Union, the United States and Japan, have developed from setting restrictions on the performance and quality of products to putting forward higher requirements for the whole process of product production, packaging, labeling, processing and transportation, and various testing standards are becoming more and more complex. In recent years, the direct loss of China's technical barriers to trade has increased at an average annual rate of 15%. As the European debt crisis continues to deteriorate and the US economic recovery is weak, trade protectionism in European and American countries has further heated up. China has become the largest target country in the global countervailing investigation, and more than 70% of the global countervailing investigation is aimed at China; various trade protection barriers are increasing and the form is constantly updated, which greatly raises the export threshold of China's textile and clothing products.

The continued appreciation of the RMB weakens the export advantage of products. In February this year, the central parity rate of the RMB against the US dollar broke through the 6.3 mark for the first time, setting a new high since the exchange rate reform. At the same time, the currencies of other emerging economies have shown very different trends against the US dollar. In 2011, the Indian rupee, the Brazilian real and the Russian ruble depreciated by 16.13 per cent, 11.01 per cent and 5.18 per cent respectively against the US dollar. However, the currencies of emerging Asian economies such as the Korean won, the Indonesian rupiah, the Thai baht and the Malaysian ringgit depreciated by 2.30 per cent, 0.80 per cent, 4.69 per cent and 3.30 per cent respectively against the US dollar. The rapid appreciation of the renminbi and the sharp depreciation of the currencies of neighboring countries against the US dollar will weaken the price advantage of my country's textiles and clothing in the international market, and my country's textile and clothing exports will be suppressed. In the first half of 2012, affected by the European debt crisis

Domestic comprehensive costs continue to rise, increasing the pressure on business operations. After the Spring Festival this year, the "labor shortage" came as scheduled. Labor-intensive enterprises represented by textiles and clothing have a more severe employment situation in the perennial shortage of workers. According to the Guangdong Provincial Department of Human Resources and Social Security, the number of short-term job shortages in the Pearl River Delta region after the holiday is nearly 1 million, and the structural "labor shortage" directly leads to a rapid increase in labor costs. In 2011, a total of 24 provinces across the country adjusted their minimum wage standards, with an average increase of 22%; Judging from the situation of the Canton Fair, corporate orders are also small, scattered and short. At the same time, the high prices of raw materials, water and electricity costs have risen sharply, and the continuous rise in domestic comprehensive costs will inevitably lead to increased operating pressure on labor-intensive textile and garment enterprises.

India and Vietnam may use trade agreements to enhance export competitiveness. At present, the negotiation of the free trade agreement between India and the European Union has entered the final stage. The agreement proposes to gradually reduce 90% of the bilateral transaction tariffs in the next 10 years, until the final cancellation. Once the agreement is implemented, it will greatly enhance the export competitiveness of India's textile and clothing to the EU market. In addition, the Pan Pacific Strategic Economic Partnership Agreement (TPP) negotiations, which include the United States, Peru, Vietnam and other countries, have also entered the final stage. The agreement clearly will help Vietnam improve its key export items (such as textiles and clothing). Quality, thereby increasing its export scale. Last year, Vietnam was already the second largest country in textile and clothing exports to the United States after China. Once the above agreement is formally implemented, it will further weaken the competitive advantage of China's textile and clothing in the international market.

Large fluctuations in cotton prices have impacted the stable operation of the industry. Since last year, the domestic and foreign cotton market has been a roller coaster pattern of rapid rise and fall. On March 8 last year, China's cotton price 328 index was 31241 yuan per ton. On December 5, the index fell to 19001 yuan per ton, down 39.2. On February 28, 2012, China's cotton price index was 19615 yuan/ton [3]. The ups and downs of domestic cotton prices have not only caused poor production and sales, potential inventory losses and profit declines in textile and garment manufacturers, but also negative effects have been transmitted along the industrial chain, affecting the normal order production and market confidence of upstream and downstream enterprises, and the cotton prices have been driven up in the early stage. Excessively high, resulting in reduced transactions and purchases. Now inventory is difficult to consume, cotton prices continue to run at a low level, cotton spinning enterprises' profits have shrunk sharply, and operating risks have increased, this has seriously hindered the stable operation of the textile and garment industry.