Can China's textile and garment export see the future?
Can China's textile and garment export see the future?
Affected by the novel coronavirus pneumonia spread worldwide, China's textile and clothing trade is unusual in the first half of this year. In May and June, some data picked up. In the second half of the year, the overall situation is complex and changeable, and we still need to pay more attention to it.
According to customs statistics, in May 2020, China's textile and clothing trade volume was 31.25 billion US dollars, an increase of 20.3%, including exports of 29.88 billion US dollars, an increase of 25.4%, imports of 1.37 billion US dollars, a decrease of 36.5%, and a trade surplus of 28.51 billion US dollars, an increase of 31.5%. From January to may 2020, the trade volume of textiles and clothing was 107.12 billion US dollars, a year-on-year decrease of 2.4%. Among them, exports were 97.91 billion US dollars, down 1.7%; imports were 9.21 billion US dollars, down 8.7%; the accumulated trade surplus was 88.7 billion US dollars, down 0.9%.
In addition, according to the latest customs data, in June, China's clothing exports reached US $12.87 billion, down 10.3% year-on-year and up 40.5% month on month. From February to June, China's clothing exports decreased by 63.6%, 22%, 27.9%, 24.9% and 10.3% year-on-year, respectively, with the decline rate narrowing since May.
Epidemic prevention materials are still the main force of export growth
In May, the global epidemic situation continued to spread, and the export scale of epidemic prevention materials in China was further expanded, driving the overall export of textiles and clothing to achieve a rapid growth of 25.4%, an increase of 14 percentage points compared with April. In the same month, the export of anti epidemic materials of textile and clothing was 16.24 billion US dollars, accounting for 54.4% of textile and clothing exports, including 13.7 billion US dollars for masks and 1.52 billion US dollars for protective clothing.
The export of conventional commodities is still subject to the reduction of market demand, and the export of bulk commodities such as yarn, fabric and clothing still shows no signs of recovery.
The sluggish market demand led to a decrease in the import of upstream intermediate goods. At the same time, due to the slow recovery of domestic consumption, clothing imports also showed a negative growth, which led to a significant decrease of 36.5% in the overall import of textile and clothing in May.
There are obvious differences between general and processing trade exports
The export trend of general trade and processing trade is obviously different. In May, the export of general trade mode increased by 36.2%, and the processing trade decreased by 41.2%. The growth rate and decline rate were 18.2% and 12.3% higher than those in April, respectively. From January to may, cumulative exports of general trade recovered 1.7% growth, while processing trade decreased by 31.1%.
Since the epidemic spread to the world, China has always attached great importance to foreign aid. From January to may, through the two trade modes of free aid and donation from international organizations and other overseas donations, a total of 220 million US dollars of textile and clothing epidemic prevention materials were provided to the world, including masks, protective clothing, medical gloves, shoe covers, medical surgical caps, cotton swabs, cotton balls and cotton sticks.
Commodity exports are sluggish and imports are shrinking
In May, the export scale of epidemic prevention materials continued to expand, becoming the driving force for double-digit growth of textile and clothing exports. From January to may, the cumulative export of epidemic prevention materials reached 27.95 billion US dollars, accounting for 28.5% of the total exports, including US $22.49 billion for masks and US $2.54 billion for protective clothing.
The export of traditional bulk commodities remained sluggish. In May, the exports of yarn, fabrics and knitwear decreased by 57.2%, 46.2% and 27.4% respectively. Among them, the performance of yarn was the weakest, and the monthly export volume continued to shrink, with both the same and month on month declines. From January to may, exports of the three categories of commodities fell by 28.7%, 30% and 24.1% respectively.
Since March, the import of textile and clothing has been reduced month by month. In May, the import volume dropped to 1.37 billion US dollars, a new monthly low of that year. The import decreased by 36.5% on the same month and 20% on the same month. Among them, textiles and clothing decreased by 40.8% and 25.6% respectively on a year-on-year basis, and yarn and fabric of major commodities decreased by 53% and 48.4% respectively. The clothing which maintained a good import trend in the early stage also decreased, and the import of needle woven clothing decreased by 31.2%.
From January to may, imports of textiles and clothing fell by 9.1% and 7.9% respectively.
In June, clothing exports showed signs of recovery, and the third quarter was not optimistic
According to customs statistics, in the first half of the year, China's clothing exports totaled US $51.08 billion, down 19.4% year-on-year. In June, China's clothing exports reached US $12.87 billion, down 10.3% year-on-year and up 40.5% month on month. From February to June, China's clothing exports decreased by 63.6%, 22%, 27.9%, 24.9% and 10.3% year-on-year, respectively, with the decline rate narrowing since May.
From the perspective of the international market, after the outbreak of the epidemic in April and the cliff like decline of consumption caused by the economic shutdown in April, the main market economy has been restarted and the demand has bottomed up. In May, clothing retail sales in the United States and the European Union surged by 188% and 130.7%, respectively, while those in the UK and Japan increased by 17.6% and 41.9% respectively. The launch of new summer clothing orders has led to the recovery of China's clothing exports in June and a month on month growth.
Looking forward to the second half of the year, due to the sharp decline in spring clothing sales in the international market, many brands said they would cancel some autumn orders and sell spring stocks in autumn. Nike said it had canceled about 30% of its factory orders before the fall and end of the year shopping season. H & M said it would sell some off season spring stock in the fall. Ralph Lauren said it had cancelled about two-thirds of its autumn orders, while Levi Strauss & Co. said it would launch some unsold basic garments in the fall. Therefore, it is expected that China's exports in the third quarter will not improve significantly.
The same is true of our sewing yarns.