I recently chatted with a boss Chen who is doing fabric business in Keqiao. He said that if this year’s business only shrunk by half compared to last year, that would already be a good result. However, judging from the current situation, it is difficult to achieve this goal. , there is still a long way to go…
The fact is – since this year, in order to ensure the normal operation of the company, Mr. Chen’s factory has maintained a low operating rate of 20-30% since the start of work in March. That is to say, this company has more than 30 circular knitting machines and only operates less than 10 of them.
“Compared with May, the orders in June are slightly better. Most of our end customers are in the United States. The epidemic there has had a greater impact this year, so the order placement is also very slow. , now we have opened about 30% of the machines to maintain daily operations.” Mr. Chen said helplessly.
From the sample enterprise data monitored by China Silk City Network, Xiao Shaoyuan has been The machine operating rate has always been lower than that of other Jiangsu and Zhejiang clusters. After the Dragon Boat Festival, the market operating rate has also remained at around 40%. Under the epidemic, most circular knitting companies adhere to the business philosophy of “low operating, stable inventory” and flexibly change their own operations. .
“Since May, the operating conditions in our factories have been very low, and all workers have been exhausted. Yes, sometimes there are orders and workers can’t be found to fill them, but this year’s market situation is like this, so everyone should bear with it!” Mr. Chen said.
When it comes to this year’s foreign trade, most textile people can only shake their heads. Judging from the recent customs data, textile exports in the previous months have shown better performance than the same period in previous years. A cliff-like decline.
Although the market gradually recovered from January to May, from the perspective of the entire structure, anti-epidemic materials were still the mainstay. In other words, conventional textiles performed relatively weakly in the first half of the year. , which also confirms that there is a long way to go for the recovery of orders in the foreign trade market.
During the visit, the editor found that the textile bosses who asked about cooperation with the United States had poor performance in recent orders. , some textile foreign trade bosses have already gone on holiday, and others are only doing small orders. Orders that often amounted to hundreds of thousands of meters before 2019 have “disappeared” in the market! In the context of the epidemic, the biggest “railing” between China and the United States in the past has changed from trade friction to economic recovery.
In the third year, the impact of Sino-US trade friction has weakened this year
Since the Sino-US trade friction broke out in 2018, it has entered its third year. During this period, trade negotiations have experienced ups and downs and back and forth.
Looking back at the various economic and trade experiences between the two countries in 2019, as media comments said, there are no winners in trade frictions. It was also at that time that many foreign trade companies that had previously had large trade volumes with the United States began to expand into markets such as the Middle East and Russia, reducing their dependence on the United States. However, judging from customs data, although China’s textile and apparel exports to the United States have declined, the proportion of exports still remains high, which is similar to that of the European Union.
“Most of our customers are from the United States. Although their orders were low-profit in the past, they were generally large in size and their payments were relatively guaranteed. This year, affected by the epidemic, it would have been difficult to place orders this year. The previous orders were cancelled, and a small part returned in May, but the overall order placing speed is very slow.” said Mr. Yu, who specializes in imitation silk.
“In the past, everyone focused on Sino-US trade, and there was a lot of panic at that time. But as time goes by, we are not afraid of increasing tariffs this year, because there are no orders.” Another textile boss who makes home textile fabrics said.
Nearly half of the people have lost their jobs, and the U.S. economy is recovering slowly!
The slow recovery of foreign trade orders is largely due to the sluggish global economic recovery caused by the epidemic. With the U.S. economy unable to cope with the pandemic and large-scale riots continuing to break out in many places, data from the U.S. Bureau of Labor Statistics showed that the employment-to-population ratio dropped to 52.8% in May, which means that 47.2% of Americans are unemployed. Affected by the COVID-19 epidemic, the proportion of the employed population has dropped sharply from the recent high of 61.2% in January, and is far from the post-war record high of 64.7% in 2000.
In addition, the Federal Reserve, which was previously able to provide unlimited QE to the U.S. economy, suddenly changed its attitude, resulting in the market not having too much “surplus food” to support the operation of the U.S. debt economic model.
Today’s economic environment is difficult to stimulate Americans’ consumption atmosphere. Although “clothing” ranks first among “food, clothing, housing and transportation”, for consumers, the most basic issue is food and clothing. Today, nearly half of the population in the United States is unemployed, which shows that there is still great resistance to textile exports to the United States.
The constant bad news has made the market, which was already in the midst of uncertainty, even more promising. It is expected that the market will continue to be weak in the next July and August, but in September and October with the arrival of the Double 11 e-commerce shopping festival and the Christmas season, the foreign trade market may show a different “excitement”!
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