The eighth and ninth rounds of high-level consultations are approaching. What is the general trend of china-us textile and garment trade?

- Mar 29, 2019-

Since this year, situation of our country foreign trade is not little pressure.According to customs statistics, in RMB terms, China's total import and export value in the first two months of this year increased by only 0.7% year on year, while in dollar terms, China's total import and export value in the first two months of this year decreased by 3.9%.China's textile and garment exports are also under downward pressure.From January to February of 2019, China's textile and apparel cumulative export value was 38.155 billion us dollars, down 11.6% year on year, of which the textile cumulative export value was 17.38 billion us dollars, down 7.8% year on year.The cumulative value of garment exports was 20.775 billion us dollars, down 14.6% year on year.Trade friction between China and the us is clearly one factor.

It is learned that liu he, member of the political bureau of the CPC central committee, vice premier of the state council and Chinese leader of the china-us comprehensive economic dialogue, has held several rounds of telephone consultations on china-us economic and trade issues with us trade representative lighthizer and finance minister mnuchin.The two sides agreed that lighthizer and mnuchin will visit China at invitation from March 28 to 29 for the eighth round of china-us high-level economic and trade consultation in Beijing.At the invitation of vice premier liu he, he will visit the us at the beginning of April and hold the ninth round of china-us high-level economic and trade consultation in Washington.

People in the industry hope that china-us economic and trade frictions can be resolved smoothly and a stable and predictable international trade environment will be created for foreign trade enterprises.

China's foreign trade situation is expected to remain stable in the first quarter

In the first two months of this year, China's imports and exports fell in dollar terms, mainly due to the Spring Festival holiday, said gao feng, spokesman for the ministry of commerce, at a regular press conference on March 21.Foreign trade enterprises in the past years before and after the Spring Festival will appear "concentrated export before the festival, import after the festival first" business characteristics, from the historical data, the month where the Spring Festival import and export have certain fluctuations.This year's Spring Festival is 11 days earlier than last year, and the New Year's eve to the 15th are all in February, so the impact of the Spring Festival is concentrated in February.

Gao said trade friction between China and the United States was also one of the factors that affected foreign trade in the first two months of this year.In the second half of last year, some enterprises, taking into account the possible impact of the concentration of imports and exports, advanced some import and export shares to the us in the first two months of this year.

Gao feng said that from the current situation, the growth rate of import and export picked up in early march, and it is expected that China's import and export will remain stable in the first quarter of this year.From the perspective of the whole year, although the external environment of China's foreign trade development is uncertain and unstable factors increase, but the endogenous force is still growing.The ministry of commerce will continue to promote the implementation of policies to stabilize foreign trade, strengthen relevant policy reserves, and at the same time, through market diversification, support cross-border e-commerce and other new business forms, accelerate the level of trade facilitation and other measures to promote steady and quality foreign trade.

Trade frictions have a profound impact on the development of the industry

In 2018, under the complex international environment, China's foreign trade has been operating smoothly and steadily.According to the China chamber of commerce for the import and export of textiles, the total value of China's foreign trade totaled us $4.62 trillion for the whole year, up 12.6 percent.Among them, exports were $2.48 trillion, up 9.9%.Imports were $2.14 trillion, up 15.8 percent.At the same time, China's textile and garment trade has also achieved two consecutive years of steady growth.In 2018, China's textile and garment exports totaled us $276.73 billion, up 3.7 percent year-on-year, while imports totaled us $26.14 billion, up 6.4 percent year-on-year.

But at the same time, our country textile clothing export occupies the international main market share to decline slightly.According to the statistics of the world trade organization, the share of China's textile and apparel export in the international market has been declining for two consecutive years since it reached the peak of 38.5% in 2015. In 2017, China's share in the world market has dropped to 35.8%, with the share of textile trade being 37.1%, while the share of clothing has dropped from 39.3% in 2015 to 34.9% in 2017.

Last year, China's textile and apparel products accounted for 36% of the import market share in the United States, down 0.3 percentage points from 2017, while Vietnam accounted for 10.5%, up 0.1 percentage points year-on-year.For the whole of last year, China's share of the eu import market was 33%, down 1 percentage point year-on-year, while Bangladesh's share was 14.3%, up 0.6 percentage point year-on-year.For the whole of last year, my import market share in Japan was 58%, down 3 percentage points year-on-year, while Vietnam's was 12.6%, up 1.4 percentage points year-on-year.

Cao jiachang, President of the China chamber of commerce for the import and export of textiles, believes that the current china-us economic and trade frictions will have a profound impact on the future development of the industry.He said that at present, among the products that have been taxed by the us side, about 7 billion us dollars are involved in textile and apparel products, accounting for 16% of China's total textile and apparel exports to the us and about 17,000 enterprises.Although the short-term impact of the us tax on China's textile and garment industry is limited, and China's exports to the us have maintained rapid growth last year due to the "export grab" factor, the uncertainty caused by the economic and trade frictions between China and the us has forced the us purchasers to make substantial adjustments to the procurement strategy and supply chain layout.Especially for long orders and forward orders with low delivery speed.For fast fashion orders with high delivery speed, it is difficult to transfer them overseas in the short term due to high requirements on supply chain efficiency and resource integration level.

In addition, China's textile and garment industry also faces the impact of other trade remedy cases.In 2018, China's textile and garment industry encountered a total of 14 trade remedy cases, including 11 new cases, which involved seven countries including Mexico, India, Argentina, Turkey, Egypt, Madagascar and the United States, and involved polyester staple fiber, flax yarn polyester, denim, polyester processed silk and other products.Sunset review investigates 3.The 14 cases total about $260 million.Although the amount is not large, but also to the main business of these products and markets of enterprises bring great difficulties.

What are the current trends in U.S. apparel purchases?

Julie Hughes, President of the fashion industry association of the United States, speaks at the 7th China and Asia textile international BBS in Shanghai, China, on U.S. trade policy and apparel purchasing trends.She said the number one concern for U.S. brands and retailers in the current trading environment is protectionism and trade measures.Other concerns include market competition from e-commerce, rising production and procurement costs, competition from traditional business practices, technological advances, supply chain management and finding suppliers outside China.Concerns about trade policy have been a top concern for U.S. brands and retailers for the second year in a row.

So what are the current trends in U.S. apparel purchases?

1. Traditional sources of procurement in 2018

According to the American fashion association's 2018 industry benchmark study, surveyed companies sourced from 51 countries and regions around the world, the same number of sources as in 2017.Eight of the top 10 sources are in Asia, and all of them increased their sourcing rates in 2018.The first is China, where 100% of the brands purchased from.In second place is Vietnam, where 96% of brands shop locally, a record high.In third place was Indonesia, where 79% of brands sourced locally.In fourth place is India, where 75 per cent of companies source locally.In fifth place is Bangladesh, where 75 per cent of businesses source locally.Notably, the americas also made the top 10, reflecting a trend of industries returning home and to the western hemisphere.Mexico came in ninth, with 50 percent of businesses sourcing.In 10th place is the United States, where 46 percent of businesses make purchases.

In 2018, the import of all kinds of textile and apparel products in the United States increased.Clothing imports were up 2.8 per cent year on year, fabrics 8.5 per cent, finished goods 6.4 per cent and yarn 6.5 per cent.

2. The fastest growing source of procurement in 2018

In 2018, the share of U.S. apparel purchases from China was 41.9 percent, up 2.7 percent year-on-year.Vietnam was second, with 13.3 per cent of the market, up 3.5 per cent year-on-year.

The fastest growing sources of procurement are concentrated in African countries, thanks to tax breaks from trade preference arrangements.Ethiopia, with an 89 per cent year-on-year increase, ranked 32nd in imports.Ghana, with a 42 per cent year-on-year increase, ranked 43rd in imports.Egypt was 19th in imports, up 19 per cent from a year earlier.Madagascar was ranked 28th in imports, up 17% from a year earlier.Kenya, with a 15 per cent year-on-year increase, ranked 20th in imports.

According to the composite score of market distance, procurement cost and social responsibility, the sources with the highest comprehensive score are Vietnam, China, Mexico and central American free trade agreement countries.

American brands mainly take the following two measures to reduce the risk of trade friction.First, diversified procurement.Maintaining the diversity of destination countries will be the procurement strategy of most brands in the next two years, and nearly 80% of purchasers plan to maintain or increase the number of procurement countries.Second, through low-cost logistics and other technical means, so that goods direct to the hands of consumers, reduce operating costs.

Speaking about her vision for future U.S. trade policy, Julie Hughes expressed the following concerns and concerns:

In a worst-case scenario, the biggest threat is that the United States could impose tariffs of 10 to 25 percent on all imports from China.

The customs and border control have strengthened law enforcement.

Continued progress on the new north American free trade agreement.

Possible automatic tax increases on steel and aluminum could spark a global trade war.

The trump administration is about to begin negotiations on a bilateral trade agreement with Japan, and talks with the European Union and Britain are in the works.The next step will be to start talks with Africa (preferred Kenya), the Philippines, Brazil and Switzerland.

Where does the future confidence of China's textile industry come from?

Julie Hughes believes that the global textile and garment industry is in an unstable period.From the tariff issue to the global uncertainties caused by brexit, from the industrial fluctuations such as business bankruptcy and reorganization to the wave of store closures, to the ever-changing consumer demand, the whole industry is undergoing a profound transformation.To turn a crisis into an opportunity, she says, colleagues in the industry need to remain confident and look on the bright side of uncertainty.

Cao jiachang said, looking into the future, we are still full of confidence in the development of China's textile and garment trade.

First, the "One Belt And One Road" initiative and the "china-africa industrialization plan" will effectively strengthen China's core position in the textile and garment supply chain in Asia and even the world.Many enterprises "go out" to accelerate the pace of layout of the global industrial chain.Plans to increase the proportion of foreign production, rational allocation of international resources, to avoid trade risks.

Second, from OEM OEM production to ODM(independent design and development) and OBM(private brand export) is the fundamental basis for China's textile and clothing to maintain export competitiveness.Many enterprises actively explore the international marketing network, through the international mergers and acquisitions, cross-border business, set up a studio in overseas, show rooms, expand the way such as wholesale and retail channels actively expand export independent design products and brands, Chinese designer brands began to shine in the international fashion week, China's electrical goods brand down jacket even in overseas "refresh" on social media.

Third, intelligent manufacturing and transformation and upgrading are the inevitable choices for enterprises to maintain their export competitive advantages.The integrity and production efficiency of China's textile and garment industry chain are beyond the reach of southeast Asian countries.Clothing production involves many details, the supply of accessories and so on are crucial.For example, if the quantity of accessories such as zippers and buttons is wrong before production, it will only take a few hours for them to be supplemented in China, while in southeast Asian countries, the production line needs to stop for at least two days to wait for the accessories to be in place.For some complicated products, the delivery time of southeast Asian countries is at least one month later than that of China. Therefore, fast fashion brands with low inventory and quick replenishment still have competitive advantages in China.In order to cope with the changes in international textile and garment consumption patterns and procurement demands in recent years, many excellent enterprises focus on the high value-added links, upgrade to strengthen research and development and lean management, invest a lot of money in equipment upgrading and intelligent transformation, and effectively enhance the international competitiveness of enterprises.

Fourth, the huge potential of China's domestic market provides a guarantee for the survival of China's textile and garment industry.In 2018, China's retail sales of clothing, shoes, hats, needles and textiles above the quota reached 1.37 trillion yuan, up 8 percent year-on-year and four times more than 10 years ago.In 2018, China's residents will spend 1,289 yuan per capita on clothing, less than 200 us dollars per capita, and there is still a lot of room for development from the level of textile and clothing consumption above 1,000 us dollars in developed countries.