Sino-US Trade Friction Accelerates the Structural Adjustment of China's Textile and Garment Export

The escalation of Sino-US trade frictions will accelerate the adjustment of China's textile and apparel export structure and the transfer of the industrial chain to Southeast Asia and other places.



In the first quarter, China's textile and apparel exports amounted to 385.21 billion yuan, an increase of 3.3% over the same period last year. Among them, textile exports amounted to 183.87 billion yuan, an increase of 93%, while apparel exports amounted to 13.34 billion yuan, a decrease of 1.6%. & ldquo; In January this year, textile and apparel exports hit a new high since September last year. Affected by the factors of Spring Festival & lsquo; rushing to export & rsquo; textile and apparel exports suffered a lumbar cut in February, reaching a new low since February 2017. In March, textile and apparel exports were strong, reversing the double-digit decline in exports in the previous two months, strongly driving the recovery of overall export growth in the first quarter and showing a slight increase. & rdquo; Zhongyu Information Analyst Yu Xiaohong said that exports fluctuated sharply in each month of the first quarter, but textile and apparel exports as a whole still showed a good development trend.



& In the context of global economic and trade slowdown, China's textile and apparel exports will continue to be under pressure. In the first quarter, some large international purchasers adjusted their strategic layout, requiring Chinese production and processing enterprises to transfer part of their production capacity to Southeast Asia and other places in advance. & In the future, apparel exports may continue to decline, while textile exports corresponding to raw materials in the supply chain are expected to catch up with apparel exports, said Yu Xiaohong.



At present, China's textile and garment market is relatively dependent on exports. According to incomplete statistics, China's textile and apparel exports exceeded 270 billion US dollars in 2018, while domestic textile and apparel retail sales amounted to about 200 billion US dollars. The United States is China's largest exporter of textile and apparel, of which cotton textile and apparel exports to the United States account for about 17% of China's total exports of cotton textile and apparel.



& The United States imposes tariffs on textile and apparel, which will directly increase the export cost of China's textile and apparel, and weaken the price competitiveness of related products. & In recent years, the textile and apparel industry in Southeast Asian countries, mainly Vietnam, has developed rapidly. In the future, it will occupy part of the textile and apparel market share of China's exports to the United States.



The escalation of trade frictions between China and the United States has also directly accelerated the devaluation of the RMB. In the first month since Trump announced the tax increase in April, the exchange rate of the RMB against the US dollar has depreciated from 6.7 to about 6.9. Since the beginning of Sino-US trade frictions in March 2018, the exchange rate of RMB against the US dollar has depreciated from 6.3 to about 6.9. Zhongyu information analysts warned that currency depreciation could temporarily boost exports of products, but the sharp depreciation of currencies in Argentina, Turkey and other countries against the US dollar triggered the financial crisis, which led to the deterioration of the economic situation, and the long-term impact of rapid currency depreciation on the market should not be underestimated.



At present, the structural adjustment of China's textile and apparel industry is accelerating. According to the data of the National Bureau of Statistics, the gross profit of China's textile and apparel industry dropped from 12.14% at the end of 2012 to 10.16% at the end of 2018. In the textile and apparel industry, the gross interest rate has continued to decline under the trend of rising labor costs and environmental protection costs. In 2018, the gross interest rate has dropped to the lowest level in nearly 10 years. The number of textile enterprises with annual revenue of more than 20 million yuan has also dropped from more than 22,000 in March 2011 to more than 19,000 at the end of 2018. Intense competition has accelerated the trend of textile enterprises'ldquo, leaving small to large and relocating factories.