China's clothing exports from November to June
Multiple factors leading to an increase in export decline
The year-on-year decrease in clothing exports is mainly driven by four factors. One is the high base for the same period last year, and June 2022 was a month with a rapid promotion of resuming work and production after the epidemic. The second is the end of the backlog of orders in the early stage. Centralized shipment from March to April, with double-digit export growth exceeding market expectations, but the backlog of orders and shipments ended in May, and exports entered a downward range. Thirdly, overseas demand is still slowing down, with only the speed and extent of the slowdown exceeding expectations. Fourth, the accelerated adjustment of the global supply chain pattern has led to important changes in China's export structure, and exports to Wet market such as the United States and the European Union have declined significantly.
Woven clothing exports better than knitted clothing
The process of woven clothing is relatively complex, with high added value of products. The degree of industrial outward transfer is lower than that of knitted clothing, and the export scale and growth rate are better than knitted clothing. From January to June, the export of woven clothing reached 33.76 billion US dollars, a slight decrease of 0.1% year-on-year; The export quantity was 6.16 billion pieces, a year-on-year decrease of 2.1%; Export prices increased by 2% year-on-year. The export of knitted clothing reached 33.3 billion US dollars, a year-on-year decrease of 7.9%; The export quantity was 9.98 billion pieces, a year-on-year decrease of 6.3%; Export prices decreased by 1.8% year-on-year. The export of clothing accessories reached 7.39 billion US dollars, a year-on-year increase of 2.6%.
Accelerated decline in exports of cotton clothing to Western markets in the United States
The accelerated "De-Sinicization" of American cotton products has not only seriously affected our export of cotton products to the United States, but also had negative effects on major markets such as the European Union and Japan. From January to June, China's cotton knitted clothing exports reached 12.9 billion US dollars, a year-on-year decrease of 15.2%; The export of cotton woven clothing reached 10.59 billion US dollars, a year-on-year decrease of 4.5%. Cotton knitted and woven clothing exports to the United States decreased by 32.7% and 24.3%, respectively, while exports to the European Union decreased by 30.3% and 24.8%, and exports to Japan decreased by 26.1% and 20.3%, respectively. The export scale of chemical fiber clothing has far surpassed that of cotton clothing and continues to grow. From January to June, the export of chemical fiber knitted clothing reached 16.28 billion US dollars, a slight decrease of 2.6% year-on-year; The export of chemical fiber woven clothing reached 19.48 billion US dollars, an increase of 4.2%.
The main categories of exports vary in temperature and temperature
From January to June, the export of casual suits and suits increased by 7.6%, the export of scarves/ties/handkerchiefs increased significantly by 20.1%, and the export of bras and socks increased slightly by 1%. The exports of other major clothing categories declined by different degrees, including sweaters, underwear/pajamas, Sportswear, and baby clothes, which declined by 12%, 9.1%, 9.9%, and 21.9% respectively.
Emerging markets performed well, and the proportion of Wet market gradually declined
Affected by the international trade environment, China's clothing exports are undergoing structural adjustments. The export share to the United States, the European Union, and Japan has gradually declined, while exports to emerging markets such as ASEAN, South Korea, Australia, Russia, and Central Asia have performed well, gradually becoming a new highlight driving foreign trade growth.
From January to June, China's clothing exports to developed Western economies (the United States, Canada, Europe, Japan, Australia, and New Zealand) amounted to 43.54 billion US dollars, a year-on-year decrease of 14.4%; Accounting for 56.7%, a year-on-year decrease of 6.8 percentage points. Exports to the United States reached 15.93 billion US dollars, a year-on-year decrease of 17.9%; The proportion is 20.7%, a year-on-year decrease of 3.5 percentage points. Exports to the European Union reached 12.88 billion US dollars, a decrease of 18.9%; The proportion is 16.8%, a decrease of 3 percentage points. Exports to Japan reached 5.88 billion US dollars, a decrease of 8.7%; The proportion is 7.7%, a decrease of 0.4 percentage points. Exports to ASEAN reached 8.21 billion US dollars, a significant increase of 15.6%. Since last year, ASEAN has surpassed Japan to become China's third largest clothing export market, and is the only market among China's four major clothing export markets to achieve positive growth, accounting for 10.7%, an increase of 1.8 percentage points year-on-year.
From the perspective of major regional markets, exports to countries along the "the Belt and Road" from January to June reached US $22.12 billion, up 16.8%. Exports to RCEP member countries reached 20.66 billion US dollars, an increase of 5.5%. Exports to the six countries of the Gulf Cooperation Council in the Middle East reached 2.7 billion US dollars, an increase of 1.1%. Exports to Latin America reached 4.32 billion US dollars, a decrease of 3.3%. Exports to Africa reached 4.9 billion US dollars, an increase of 31.2%. Exports to the five Central Asian countries reached 5.41 billion US dollars, a significant increase of 37.6%, with exports to Kazakhstan and Tajikistan increasing significantly by 199.8% and 109.2%, respectively.
From the perspective of major single country markets, exports to South Korea, Australia, and Russia reached 3.36 billion, 2.88 billion, and 1.98 billion US dollars, with growth rates of 14.2%, 4.4%, and 44.2% respectively; Exports to the UK and Canada decreased by 21.7% and 19.4% to $2.1 billion and $1.22 billion, respectively.
Rapid growth in exports in the central and western regions, with a decrease in the proportion of eastern provinces and cities
The top five export regions showed a downward trend from January to June. Zhejiang's exports amounted to 16.33 billion US dollars, a slight decrease of 0.4% year-on-year. Guangdong, Jiangsu, Shandong, and Fujian's exports amounted to 12.36 billion US dollars, 91.3 billion US dollars, 8.59 billion US dollars, and 7.06 billion US dollars, respectively, a decrease of 12.9%, 18.9%, 2.6%, and 11.6% year-on-year. The total proportion of the top five export provinces and cities in China is 69.6%, a year-on-year decrease of 3.6 percentage points. The total exports of 20 provinces and cities in the central and western regions have increased by 21.8%, accounting for 21.1% of the total exports and an increase of 4.5 percentage points. Among them, Xinjiang, Hubei, Guangxi, and Sichuan exported 5.27 billion, 1.4 billion, 1.35 billion, and 1.35 billion US dollars respectively, with an increase of 53.7%, 30.1%, 149.7%, and 59.3%, respectively.
China's market share in developed countries continues to decline
The trend of order transfer in Western countries such as the United States and Europe is evident, and China's share of clothing imports in developed country markets has further declined. From January to May, China's share of clothing imports to the United States was 19.8%, a year-on-year decrease of 2.1 percentage points; Accounting for 24.7% of the EU share, a decrease of 2.1 percentage points; Accounting for 51.5% of Japan's share, a decrease of 3.1 percentage points; Its share in the UK is 21.8%, a decrease of 2.1 percentage points; Accounting for 59.5% of Australia's share, a decrease of 2 percentage points; The share in Canada is 28.1%, a decrease of 1.7 percentage points. In developed markets, the market share in South Korea has only increased, accounting for 32.5% of South Korean imports from January to May, an increase of 1 percentage point.
2. International market situation
Developed markets generally experience sluggish imports
As a major global clothing consumer market, clothing imports from the United States and the European Union continue to be sluggish, with double-digit declines. From January to May, the United States imported $34.8 billion in clothing, a year-on-year decrease of 23.6%. The EU imported clothing worth 38.53 billion US dollars, a year-on-year decrease of 10.9%. Japan's imported clothing reached 10.24 billion US dollars, a slight decrease of 0.1% year-on-year. The UK imported clothing worth 8.8 billion US dollars, a year-on-year decrease of 15.5%. Canada imported clothing worth 4.75 billion US dollars, a year-on-year decrease of 3.2%. Australia imported clothing worth 3.67 billion US dollars, a year-on-year decrease of 5.4%. Among the major developed markets, only South Korea saw a slight increase in imported clothing, with imports reaching $5.05 billion, a year-on-year increase of 1.8%.
Major clothing exporting countries have significantly slowed down
The demand in major global markets has generally weakened, and major clothing supply countries outside of China are also facing a decline in exports, with some countries experiencing a decline rate far exceeding China's 4.1% decline. According to the Vietnam Textile and Apparel Association, Vietnam exported 18.6 billion US dollars in clothing from January to June, a significant decrease of 17.6% year-on-year. From January to May, Türkiye exported 8.06 billion US dollars, down 1%; India's exports reached 7.11 billion US dollars, a decrease of 13.7%; Indonesia's exports reached 3.35 billion US dollars, a decrease of 23.4%.
From the perspective of China's fabric exports to neighboring countries, there has also been a significant decline. From January to June, fabric exports to Vietnam decreased by 12.8%, exports to Bangladesh decreased by 24.7%, exports to Cambodia decreased by 17%, exports to Indonesia decreased by 12.9%, and exports to Myanmar decreased by 18%.
3. Trend outlook
The global economy is gradually recovering, but growth remains weak
According to the IMF's World Economic Outlook released on July 26th, the global economic growth rate will decrease from 3.5% in 2022 to 3.0% in 2023 and 2024. The economic slowdown is mainly concentrated in developed economies, whose growth rate will decrease from 2.7% in 2022 to 1.5% this year, and will remain at a sluggish level of 1.4% next year. Emerging markets and developing economies are still expected to rebound, with growth rates accelerating from 3.1% in 2022 to 4.0% and 4.1% in the next two years. Global overall inflation will decrease from 8.7% in 2022 to 6.8% in 2023 and 5.2% in 2024, but it is expected that the decline in core inflation will be slower.
US economy exceeds expectations, employment resilience supports consumer spending
The US economy grew by 2.4% in the second quarter, higher than the 2.0% in the first quarter, which exceeded expectations. This was due to the resilience of the labor market supporting consumer spending, as well as increased equipment investment by businesses, reducing the risk of economic recession. Affected by the rising base, the year-on-year growth rate of US CPI in June decreased to 3%. The inventory/sales ratio of US clothing stores in May was 2.4, an increase of 0.4% compared to the previous month. In June, the retail sales of clothing and apparel stores in the United States reached 25.88 billion US dollars, an increase of 0.6% from the previous month, 0.7% from the same period last year, and 16.8% from the same period in 2019. According to Cartesian data, an American research company, the volume of shipping containers sent from Asia to the United States in June decreased by 13% year on year, a decrease slightly compared with 20% from April to May. From the perspective of shipping regions, China's share of nearly 60% decreased by 17% year-on-year, South Korea decreased by 11%, and Vietnam decreased by 6%, indicating an improvement compared to May.
The economic growth rate in the eurozone continues to slow down
The IMF expects the economic growth rate of the eurozone to decrease from 3.5% in 2022 to 0.9% in 2023, and then rebound to 1.5% in 2024. The euro zone's June adjusted CPI increased by 5.5% year-on-year, while the core adjusted CPI increased by 5.4% year-on-year. According to the latest data from the Eurostat, EU retail sales in May fell 3% year on year and 0.1% month on month. The retail sales of non food products decreased by 2.4% year-on-year.
Retail sales in Japan have not yet returned to pre pandemic levels
In May, the average monthly consumption expenditure of Japanese households was 286000 yen, a decrease of 4% compared to the same period last year, marking the third consecutive month of decline. From January to May, Japan's textile and clothing retail sales accumulated 3.5 trillion yen, a year-on-year increase of 1.1%, and a decrease of 22.3% compared to the same period before the epidemic. In May, the retail sales of textile and clothing in Japan reached 741 billion yen, a year-on-year decrease of 3.7% and a decrease of 22.8% compared to the same period before the epidemic.
Overall, the pressure on clothing exports remains significant in the second half of this year, but some favorable factors are gradually becoming clearer. From the perspective of export pressure factors, firstly, the international market economy is difficult to improve, and demand has not yet significantly improved. The IMF predicts that approximately 93% of developed economies will experience a slowdown in economic growth in 2023. The second is the continuous adjustment of the global supply chain, with a decrease in procurement from developed countries in China. I face significant difficulties in maintaining my existing market share.
From the perspective of upward factors: firstly, the Chinese government continues to exert efforts in policies, with the implementation of numerous new trade regulations and the entry into force of some trade agreements, jointly promoting the stabilization of exports. Secondly, international flights are gradually resuming, and cross-border personnel mobility can promote the smooth development of this year's exhibition and drive the repair of new orders. Thirdly, after the gradual digestion of overseas inventory, the demand for overseas restocking has rebounded, which will leverage the release of new orders this year. Fourth, the base number of exports in the second half of last year was lower than that in the first half of last year (exports in the first half of 2022 increased by 12% year on year, and exports in the second half of 2022 decreased by 3.1% year on year). The low Base effect has a certain role in boosting export growth in the second half of this year. Fifth, although the export to Wet market is facing many difficulties, the export to emerging markets is growing rapidly, and the structure of clothing export market is more diversified, which will play a positive role in promoting clothing exports in the future. Sixth, the RMB exchange rate is expected to stabilize in the second half of the year. The multiple negative factors that led to a decline in exports in the second half of last year have begun to subside this year, such as transportation costs and shipping congestion, which will no longer be a constraint on orders in 2023.
In the future, the clothing export industry needs to increase product added value and promote a steady increase in the share of high value-added products. On the other hand, efforts should also be made to slow down the decline in the share of mid to low-end products. On the one hand, efforts should be made to stabilize the share of the Wet market, and on the other hand, the market diversification strategy should be practiced to avoid the risks caused by excessive dependence on developed countries or the single market.
With the support of the national policy of stabilizing foreign trade, China's clothing export industry will actively leverage the advantages of the entire industry chain, focus on both supply and demand, enhance core competitiveness, enhance foreign trade innovation momentum, and promote win-win cooperation and high-quality development in the international textile and clothing supply chain.
source:https://mp.weixin.qq.com/s/qigAHmY4GAvnM2ZS4aw6Jg